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Sheetmetal Workers Union Local No. 110 and John Grider v. Public Service Co.

August 27, 1985

SHEETMETAL WORKERS UNION LOCAL NO. 110 AND JOHN GRIDER, PLAINTIFFS-APPELLANTS,
v.
PUBLIC SERVICE COMPANY OF INDIANA, INC., DEFENDANT-APPELLEE



Appeal from the United States District Court for the Southern District of Indiana, New Albany Division. No. NA 84-16-C--William E. Steckler, Judge.

Author: Pell

Before CUDAHY and POSNER, Circuit Judges, and PELL, Senior Circuit Judge.

PELL, Senior Circuit Judge.

Plaintiffs-appellants Local 110 (the Union) and John Grider filed a two-count complaint in federal district court against defendant-appellee Public Service Company of Indiana (PSI). Plaintiffs' first count alleged a breach of contract by PSI arising under 29 U.S.C. § 185 (section 301). Plaintiffs' second count alleged interference by PSI with Grider's contractual rights under a collective bargaining agreement negotiated by the Union and Pullman Sheetmetal Works (Pullman) and interference with Grider's rights under a Project Agreement to which the Union, Pullman, and PSI were parties. Defendant PSI moved to dismiss plaintiffs' complaint for lack of subject matter jurisdiction. The district court granted defendant's motion, concluding that PSI did not commit a breach of contract cognizable under section 301. The district court then dismissed plaintiffs' pendent claim for interference with contractual rights. Plaintiffs appeal form the district court's decision.

I. THE FACTS

Plaintiff John Grider worked for Pullman Sheetmetal Works as a journeyman sheetmetal worker until September 6, 1983. During his employment, plaintiff was a member of Sheetmetal Workers Local Union No. 110 and possessed benefits under a collective bargaining agreement negotiated by Pullman and the Union. This collective bargaining agreement set forth the terms and conditions of Grider's employment.

An additional agreement, two which Pullman, the Union and PSI were parties, set forth the responsibilities and right of employers such as Pullman, unions such as Local 110, and defendant PSI with respect to construction work performed on PSI's Marble Hill nuclear generating project. This agreement, designated the "Project Agreement," required employers and unions to arbitrate any disputes arising at Marble Hill pursuant to a specified procedure. The Project Agreement furthermore reserved to PSI the right to suspend or terminate work at Marble Hill as well as the right to establish work rules and work hours. The agreement additionally prohibited fighting on PSI's premises. Finally, the agreement reserved to employers such as Pullman the exclusive authority to manage day-to-day operations.

On September 6, 1983, Grider, while working at Marble Hill, allegedly verbally and physically abused one of PSI's security guards. PSI denied Grider access to Marble Hill the next day and so informed Pullman. Pullman then examined Grider's job performance record. Because Grider's record indicated that Grider already had obtained a written warning for unrelated job misconduct, Pullman terminated Grider. Grider then filed a grievance pursuant to the grievance and arbitration clause of the Project Agreement, protesting his discharge. PSI did not participate in these grievance proceedings. After a Local Joint Adjustment Board was unable to reach a consensus on the merits of Grider's grievance against Pullman, Grider appealed to the National Adjustment Board. The National Board dismissed Grider's grievance, finding that Pullman was not responsible for PSI's denial of site access to Grider. Grider subsequently instituted the present action against PSI, seeking to compel PSI to arbitrate his grievance, or, alternatively, seeking compensatory relief for PSI's alleged breach of and interference with Grider's contractual rights.

As we have noted, the district court dismissed Grider's complaint on the basis that it failed to state a claim arising under section 301. In so ruling, the district court determined that PSI did not agree, under the terms of the Project Agreement, to arbitrate grievances arising at Marble Hill. The district court furthermore rejected plaintiffs' argument that Pullman's agreement to arbitrate grievances arising at Marble Hill bound PSI because PSI and Pullman were joint employers. The district court then dismissed Grider's pendent claim for interference with contractual rights because no federal questions remained to which this tort claim could attach. Grider challenges the district court's conclusion that the Project Agreement did not obligate PSI to participate in arbitration of his grievance and additionally contends that PSI's denial of access itself constituted a breach of the Project Agreement. Grider does not contest the district court's dismissal of his pendent claim for interference with contractual rights, however, if this claim for interference with contractual rights, however, if this court concludes that no section 301 jurisdiction exists over Count I of this complaint.

II. CONSTRUING GRIDER'S COMPLAINT UNDER SECTION 301

Section 301 invest the district courts with original jurisdiction over "suits for violation of contracts between ... employer[s] and ... labor organization[s]" in industries affecting commerce.*fn1 29 U.S.C. § 185 (1978). Federal courts adjudicating suits arising under section 301 must apply federal law. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957). The federal law governing section 301 suits includes the remedy of specific performance for agreements to arbitrate labor-management disputes. Id. at 458. Indeed, federal labor policy includes a preference for private arbitration of such disputes. United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960). This preference for arbitration of labor-management disputes has let the courts to presume that any dispute arising under a labor contract containing a grievance and arbitration clause is arbitrable absent express contract language to the contrary. Id. at 584-85.

Plaintiffs' dispute focuses on the scope of the grievance and arbitration provisions contained in the Project Agreement and, therefore, arises under a labor contract. The presumption favoring arbitrability of this dispute will not operate, however, unless defendant PSI in fact agreed to bind itself to those grievance and arbitration provisions. See Oil, Chemical & Atomic Workers International Union v. American Maize Products Co., 492 F.2d 409, 412 (7th Cir. 1974), cert denied, 417, U.S. 969. As the Supreme Court noted in United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. at 582, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."

After examining the language used in the Project Agreement's grievance and arbitration provisions, this court can only conclude that PSI did not agree to arbitrate any disputes arising between it and other signatories to the Agreement. The grievance and arbitration provisions neatly set forth what procedures grievants must follow but refer exclusively to representatives of the "employee" and the "employer." The preamble to the Agreement defines these parties specifically -- "employer" referring to the various contractors and subcontractors performing work at Marble Hill. The Agreement additionally denotes PSI as "owner" of the Marble Hill project. Because the grievance and arbitration provisions of the Project Agreement bind only representatives of employees and representatives of employers, the provisions do not bind PSI. As a result, the presumption favoring arbitrability of labor disputes does not apply to this case, and the district court correctly declined to order PSI to arbitrate Grider's grievance.

Indeed, an identical issue confronted this court merely two years ago. See General Drivers, Warehousemen & Helpers, Local Union No 89 v. Public Service Co., 705 F.2d 238, 241 (7th Cir. 1983) (Teamsters). In Teamsters, a union signatory to the Project Agreement sought to compel PSI to arbitrate a dispute stemming from PSI's decision to discontinue the union's warehousing services. This court scrutinized the grievance and arbitration provisions of the Project Agreement and determined that "the language of the ... Agreement compel[led] the conclusion that the 'Owner' (PSI) ha[d] no obligation to arbitrate ...


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