United Steelworkers of America v. Warrior and Gulf Navigation Company/Dissent Whittaker

by Charles Evans Whittaker

United States Supreme Court

363 U.S. 574

UNITED STEELWORKERS OF AMERICA, Petitioner,  v.  WARRIOR AND GULF NAVIGATION COMPANY.

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

Mr. Justice WHITTAKER, dissenting.

Until today, I have understood it to be the unquestioned law, as this Court has consistently held, that arbitrators are private judges chosen by the parties to decide particular matters specifically submitted; ^[1] that the contract under which matters are submitted to arbitrators is at once the source and limit of their authority and power; ^[2] and that their power to decide issues with finality, thus ousting the normal functions of the courts, must rest upon a clear, definitive agreement of the parties, as such powers can never be implied. United States v. Moorman, 338 U.S. 457, 462, 70 S.Ct. 288, 291, 94 L.Ed. 256; ^[3] Mercantile Trust Co. v. Hensey, 205 U.S. 298, 309, 27 S.Ct. 535, 539, 51 L.Ed. 811. ^[4] See also Fernandez & Hnos. v. Rickert Rice Mills, 1 Cir., 119 F.2d 809, 815, 136 A.L.R. 351; ^[5] Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386, 391; ^[6] Continental Milling & Feed Co. v. Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450; ^[7] Jacob v. Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067. ^[8] I believe that the Court today departs from the established principles announced in these decisions.

Here, the employer operates a shop for the normal maintenance of its barges, but it is not equipped to make major repairs, and accordingly the employer has, from the beginning of its operations more than 19 years ago, contracted out its major repair work. During most, if not all, of this time the union has represented the employees in that unit. The District Court found that '(t) hroughout the successive labor agreements between these parties, including the present one, * * * (the union) has unsuccessfully sought to negotiate changes in the labor contracts, and particularly during the negotiation of the present labor agreement, * * * which would have limited the right of the (employer) to continue the practice of contracting out such work.' 168 F.Supp. 702, 704-705.

The labor agreement involved here provides for arbitration of disputes respecting the interpretation and application of the agreement and, arguably, also some other things. But the first paragraph of the arbitration section says: '(M)atters which are strictly a function of management shall not be subject to arbitration under this section.' Although acquiescing for 19 years in the employer's interpretation that contracting out work was 'strictly a function of management,' and having repeatedly tried particularly in the negotiation of the agreement involved here-but unsuccessfully, to induce the employer to agree to a covenant that would prohibit it from contracting out work, the union, after having agreed to and signed the contract involved, presented a 'grievance' on the ground that the employer's contracting out work, at a time when some employees in the unit were laid off for lack of work, constituted a partial 'lockout' of employees in violation of the antilockout provision of the agreement.

Being unable to persuade the employer to agree to cease contracting out work or to agree to arbitrate the 'grievance,' the union brought this action in the District Court, under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, 29 U.S.C.A. § 185, for a decree compelling the employer to submit the 'grievance' to arbitration. The District Court, holding that the contracting out of work was, and over a long course of dealings had been interpreted and understood by the parties to be, 'strictly a function of management,' and was therefore specifically excluded from arbitration by the terms of the contract, denied the relief prayed, 168 F.Supp. 702, 705. The Court of Appeals affirmed, 269 F.2d 633, and we granted certiorari. 361 U.S. 912, 80 S.Ct. 255, 4 L.Ed.2d 183.

The Court now reverses the judgment of the Court of Appeals. It holds that the arbitrator's source of law is 'not confined to the express provisions of the contract,' that arbitration should be ordered 'unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute,' that '(d)oubts (of arbitrability) should be resolved in favor of coverage,' and that when, as here, 'an absolute no-strike clause is included in the agreement, then * * * everything that management does is subject to (arbitration).' I understand the Court thus to hold that the arbitrators are not confined to the express provisions of the contract, that arbitration is to be ordered unless it may be said with positive assurance that arbitration of a particular dispute is excluded by the contract, that doubts of arbitrability are to be resolved in favor of arbitration, and that when, as here, the contract contains a no-strike clause, everything that management does is subject to arbitration.

This is an entirely new and strange doctrine to me. I suggest, with deference, that it departs from both the contract of the parties and the controlling decisions of this Court. I find nothing in the contract that purports to confer upon arbitrators any such general breadth of private judicial power. The Court cites no legislative or judicial authority that creates for or gives to arbitrators such broad general powers. And I respectfully submit that today's decision cannot be squared with the statement of Judge, later Mr. Justice, Cardozo in Marchant that 'No one is under a duty to resort to these conventional tribunals, however helpful their processes, except to the extent that he has signified his willingness. Our own favor or disfavor of the cause of arbitration is not to count as a factor in the appraisal of the thought of others.' (emphasis added), 252 N.Y., at page 299, 169 N.E., at page 391; nor with his statement in that case that '(t)he question is one of intention, to be ascertained by the same tests that are applied to contracts generally,' id.; nor with this Court's statement in Moorman, 'that the intention of the parties to submit their contractual disputes to final determination outside the courts should be made manifest by plain language' (emphasis added), 338 U.S., at page 462, 70 S.Ct. at page 291; nor with this Court's statement in Hensey that: 'To make such (an arbitrator's) certificate conclusive requires plain language in the contract. It is not to be implied.' (Emphasis added.) 205 U.S., at page 309, 27 S.Ct. at page 539. 'A party is never required to submit to arbitration any question which he has not agreed so to submit, and contracts providing for arbitration will be carefully construed in order not to force a party to submit to arbitration a question which he did not intend to be submitted.' (Emphasis added.) Fernandez & Hnos. v. Rickert Rice Mills, supra, 1 Cir., 119 F.2d at page 815.

With respect, I submit that there is nothing in the contract here to indicate that the employer 'signified (its) willingness' (Marchant, supra, 252 N.Y. at page 299, 169 N.E. at page 391) to submit to arbitrators whether it must cease contracting out work. Certainly no such intention is 'made manifest by plain language' (Moorman, supra, 338 U.S. at page 462, 70 S.Ct. at page 291), as the law 'requires,' because such consent 'is not to be implied.' Hensey, supra, 205 U.S. at page 309, 27 S.Ct. at page 539. To the contrary, the parties by their conduct over many years interpreted the contracting out of major repair work to be 'strictly a function of management,' and if, as the concurring opinion suggests, the words of the contract can 'be understood only by reference to the background which gave rise to their inclusion,' then the interpretation given by the parties over 19 years to the phrase 'matters which are strictly a function of management' should logically have some significance here. By their contract, the parties agreed that 'matters which are strictly a function of management shall not be subject to arbitration.' The union over the course of many years repeatedly tried to induce the employer to agree to a covenant prohibiting the contracting out of work, but was never successful. The union again made such an effort in negotiating the very contract involved here, and, failing of success, signed the contract, knowing, of course, that it did not contain any such covenant, but that, to the contrary, it contained, just as had the former contracts, a covenant that 'matters which are strictly a function of management shall not be subject to arbitration.' Does not this show that, instead of signifying a willingness to submit to arbitration the matter of whether the employer might continue to contract out work, the parties fairly agreed to exclude at least that matter from arbitration? Surely it cannot be said that the parties agreed to such a submission by any 'plain language.' Moorman, supra, 338 U.S. at page 462, 70 S.Ct. at page 291, and Hensey, supra, 205 U.S. at page 309, 27 S.Ct. at page 539. Does not then the Court's opinion compel the employer 'to submit to arbitration (a) question which (it) has not agreed so to submit'? Fernandez & Hnos., supra, 119 F.2d at page 815.

Surely the question whether a particular subject or class of subjects is or is not made arbitrable by a contract is a judicial question, and if, as the concurring opinion suggests, 'the court may conclude that (the contract) commits to arbitration any (subject or class of subjects).' it may likewise conclude that the contract does not commit such subject or class of subjects to arbitration, and '(w)ith that finding the court will have exhausted its function' no more nor less by denying arbitration than by ordering it. Here the District Court found, and the Court of Appeals approved its finding, that by the terms of the contract, as interpreted by the parties over 19 years, the contracting out of work was 'strictly a function of management' and 'not subject to arbitration.' That finding, I think, should be accepted here. Acceptance of it requires affirmance of the judgment.

I agree with the Court that courts have no proper concern with the 'merits' of claims which by contract the parties have agreed to submit to the exclusive jurisdiction of arbitrators. But the question is one of jurisdiction. Neither may entrench upon the jurisdiction of the other. The test is: Did the parties in their contract 'manifest by plain language' (Moorman, supra, 338 U.S. at page 462, 70 S.Ct. at page 291) their willingness to submit the issue in controversy to arbitrators? If they did, then the arbitrators have exclusive jurisdiction of it, and the courts, absent fraud or the like must respect that exclusive jurisdiction and cannot interfere. But if they did not, then the courts must exercise their jurisdiction, when properly invoked, to protect the citizen against the attempted use by arbitrators of pretended powers actually never conferred. That question always is, and from its very nature must be, a judicial one. Such was the question presented to the District Court and the Court of Appeals here. They found the jurisdictional facts, properly applied the settled law to those facts, and correctly decided the case. I would therefore affirm the judgment.

Notes

1. 'Arbitrators are judges chosen by the parties to decide the matters submitted to them.' Burchell v. Marsh, 17 How. 344, 349, 15 L.Ed. 96.
2. 'The agreement under which (the arbitrators) were selected was at once the source and limit of their authority, and the award, to be binding, must, in substance and form, conform to the submission.' (Emphasis added.) Continental Ins. Co. v. Garrett, 6 Cir., 125 F. 589, 590-Opinion by Judge, later Mr. Justice, Lurton.
3. 'It is true that the intention of parties to submit their contractual disputes to final determination outside the courts should be made manifest by plain language.' (Emphasis added.) United States Moorman, 338 U.S. 457, 462, 70 S.Ct. 288, 291, 94 L.Ed. 256.
4. 'To make such (an arbitrator's) certificate conclusive requires plain language in the contract. It is not to be implied.' (Emphasis added.) Mercantile Trust Co. v. Hensey, 205 U.S. 298, 309, 27 S.Ct. 535, 539.
5. 'A party is never required to submit to arbitration any question which he has not agreed so to submit, and contracts providing for arbitration will be carefully construed in order not to force a party to submit to arbitration a question which he did not intend to be submitted.' (Emphasis added.) Fernandez & Hnos. v. Rickert Rice Mills, 1 Cir., 119 F.2d 809, 815, 136 A.L.R. 351.
6. In this leading case, Judge, later Mr. Justice, Cardozo said:
7. In this case, the Court, after quoting Judge Cardozo's language in Marchant, supra, saying that 'the question is one of intention,' said:
8. 'But, under any circumstances, before the decision of an arbitrator can be held final and conclusive, it must appear, as was said in Chandley Bros. v. Cambridge Springs, 200 Pa. 230, 49 Atl. 772, that power to pass upon the subject-matter is clearly given to him. 'The terms of the agreement are not to be strained to discover it. They must be clear and unmistakable to oust the jurisdiction of the courts; for trial by jury cannot by taken away by implication, merely, in any case." (Emphasis added.) Jacob v. Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067.