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Milwaukee Typographical Union No. 23 v. Newspapers Inc.

decided: January 23, 1981.

MILWAUKEE TYPOGRAPHICAL UNION NO. 23, PLAINTIFF-APPELLEE,
v.
NEWSPAPERS, INC., DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Eastern District of Wisconsin. No. 79-C-649 -- John W. Reynolds, Judge.

Before Pell, Circuit Judge, Skelton, Senior Judge,*fn* and Wood, Circuit Judge.

Author: Pell

This action arose from a labor dispute between Newspapers, Inc. (Employer), a newspaper publisher in Milwaukee, Wisconsin, and its labor organization representing the Employer's composing room employees, Milwaukee Typographical Union No. 23 (Union). In 1976, the Employer installed a video display terminal (VDT) system in its editorial departments which introduced electronic preparation, editing, and transmission of newspaper copy. The Union sought arbitration claiming that the introduction of the VDT system fell within the collective bargaining agreement's jurisdictional language, thereby compelling the Employer to bargain about the system's impact. The dispute was submitted to arbitration. On March 29, 1979, Arbitrator Warns decided that while the Employer was entitled to install the VDT system, it was obligated to negotiate with the Union regarding the system's "impact" upon composing room work. The arbitrator directed the parties to bargain and to return to arbitration after 60 days if they could not reach an agreement.

On August 17, 1979, the Union petitioned the district court for enforcement of the award pursuant to the Labor-Management Relations Act, 29 U.S.C. § 185, and the United States Arbitration Act, 9 U.S.C. §§ 1-14. In lieu of an answer, the Employer filed a motion to dismiss in accordance with Federal Rule of Civil Procedure 12(b)(6). The Union filed a reply to the Employer's motion and the Employer, in turn, filed a reply brief. No motion for summary judgment ever was filed.

In the district court's January 31, 1980, Decision and Order, the court denied the Employer's motion to dismiss and granted enforcement of the arbitration award. The Employer argues on appeal that the district court's judgment violated due process because the court converted the Employer's motion to dismiss into a motion for summary judgment without prior notice to the parties, and without affording the Employer an opportunity to file evidentiary material in accordance with Fed.R.Civ.P. 56.*fn1 Alternatively, the Employer contends that the arbitration award is unenforceable because the arbitrator exceeded his authority, 482 F. Supp. 1238 (D.C.).

I.

The parties vigorously disagree on the applicability of the United States Arbitration Act to the facts of this case.*fn2 The Union argues that the Act applies and seems to theorize that Fed.R.Civ.P. 81(a)(3) preempts normal procedure under Rules 12(b) and 56. Rule 81(a)(3) stipulates that the Federal Rules of Civil Procedure apply to proceedings under the Arbitration Act only to the extent that matters of procedure are not provided for in that Act.

The Applicability of the Arbitration Act

As this court recently noted in Teamsters Local 135 v. Jefferson Trucking Co., 628 F.2d 1023, 1026 (7th Cir. 1980), the circuits are divided over whether the Arbitration Act applies to collective bargaining agreements because § 1 of the Act explicitly excludes "contracts of employment of ... workers engaged in foreign or interstate commerce" from the Act's coverage. District courts in this circuit, however, have applied 9 U.S.C. § 9 in proceedings to confirm arbitration awards made pursuant to collective bargaining contracts. Botica v. Floyd Steel Erectors, Inc., 485 F. Supp. 334 (N.D.Ill.1980); Teamsters Local 364 v. Ruan Transport Corp., 473 F. Supp. 298 (N.D.Ind.1979). This court has held that the Act's exclusion relates only to workers in transportation industries. Pietro Scalzitti Co. v. Int'l Union of Operating Engineers, Local 150, 351 F.2d 576, 579-80 (7th Cir. 1965).

Even assuming that § 1 poses no bar in this case, the Employer nonetheless points out that § 9 of the Act allows enforcement of an arbitration order only "(i)f the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration...." In this case the labor agreement contains no express statement authorizing the entry of judgment.

The agreement contemplated by § 9, however, need not be explicit. In Commonwealth Edison Co. v. Gulf Oil Corp., 541 F.2d 1263, 1273 (7th Cir. 1976), for example, this court held that the parties were "deemed to have consented to entry of judgment ... as required by 9 U.S.C. § 9" because their agreement stipulated that arbitration proceedings would be conducted in accordance with the American Arbitration Association's (AAA) rules which did provide such consent.

While the contract in the present case does not adopt AAA rules, it does provide that any decision of the arbitration board "shall be final and binding upon both parties."*fn3 Several courts have found such language sufficient to imply consent to the entry of judgment on an arbitration award under § 9. Kallen v. District 1199, Nat'l Union of Hosp. Care Employees, 574 F.2d 723, 724-26 (2d Cir. 1978); I/S Stavborg v. Nat'l Metal Converters, Inc., 500 F.2d 424, 426-27 (2d Cir. 1974); Audi NSU Auto Union Aktiengesellschaft v. Overseas Motors, Inc., 418 F. Supp. 982, 984-85 (E.D.Mich.1976). The court in Kallen, supra, 574 F.2d at 726, faced with a situation analogous to that of the present case, reasoned that

while it is true that the Employer has resisted enforcement of the award, it nevertheless participated fully in the arbitration process before the American Arbitration Association. In such circumstances, the Employer can hardly avow that an award will be "final, conclusive and binding" upon it without implicitly agreeing that federal court intervention may be sought to compel compliance.

In Kallen, the court invoked both the Arbitration Act and the Labor-Management Relations Act to confirm an arbitration award rendered pursuant to a collective bargaining contract. Accord, Marine Transit Corp. v. Dreyfus, 284 U.S. 263, 276, 52 S. Ct. 166, 169, 76 L. Ed. 282 (1932) (In upholding the district court's confirmation of an arbitration award under § 8, Title 9's admiralty provision, the Court found that the agreement's stipulation that an arbitration award be "final and binding" was sufficient to refute the ...


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