Local 174, Teamsters, Chaukfeurs, Warehousemen & Helpers of America v. Lucas Flour Company/Opinion of the Court

by Potter Stewart

United States Supreme Court

369 U.S. 95

Local 174, Teamsters, Chaukfeurs, Warehousemen & Helpers of America  v.  Lucas Flour Company

 Argued: Nov. 7 and 8, 1961. --- Decided: March 5, 1962

The petitioner and the respondent (which we shall call the union and the employer) were parties to a collective bargaining contract within the purview of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq. The contract contained the following provisions, among others:

'ARTICLE II

'The Employer reserves the right to discharge any man in his employ if his work is not satisfactory.

'ARTICLE XIV

'Should any difference as to the true interpretation of this agreement arise, same shall be submitted to a Board of Arbitration of two members, one representing the firm, and one representing the Union. If said members cannot agree, a third member, who must be a disinterested party shall be selected, and the decision of the said Board of Arbitration shall be binding. It is further agreed by both parties hereto that during such arbitration, there shall be no suspension of work.

'Should any difference arise between the employer and the employee, same shall be submitted to arbitration by both parties. Failing to agree, they shall mutually appoint a third person whose decision shall be final and binding.' In May of 1958 an employee named Welsch was discharged by the employer after he had damaged a new fork-lift truck by running it off a loading platform and onto some railroad tracks. When a business agent of the union protested, he was told by a representative of the employer that Welsch had been discharged because of unsatisfactory work. The union thereupon called a strike to force the employer to rehire Welsch. The strike lasted eight days. ^[1] After the strike was over, the issue of Welsch's discharge was submitted to arbitration. Some five months later the Board of Arbitration rendered a decision, ruling that Welsch's work had been unsatisfactory, that his unsatisfactory work had been the reason for his discharge, and that he was not entitled to reinstatement as an employee.

In the meantime, the employer had brought this suit against the union in the Superior Court of King County, Washington, asking damages for business losses caused by the strike. After a trial that court entered a judgment in favor of the employer in the amount of $6,501.60. ^[2] On appeal the judgment was affirmed by Department One of the Supreme Court of Washington. 57 Wash.2d 95, 356 P.2d 1. The reviewing court held that the pre-emption doctrine of San Diego Building Trades Council, etc. v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775, did not deprive it of jurisdiction over the controversy. The court further held that § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, 29 U.S.C.A. § 185, could not 'reasonably be interpreted as pre-empting state jurisdiction, or as affecting it by limiting the substantive law to be applied.' 57 Wash.2d at 102, 356 P.2d at 5. Expressly applying principles of state law, the court reasoned that the strike was a violation of the collective bargaining contract, because it was an attempt to coerce the employer to forego his contractual right to discharge an employee for unsatisfactory work. ^[3] We granted certiorari to consider questions of federal labor law which this case presents. 365 U.S. 868, 81 S.Ct. 902, 5 L.Ed.2d 859.

We note at the outset a question as to our jurisdiction. Although the judgment before us has been certified as that of the Supreme Court of Washington, this case was actually heard and decided by Department One of that court, consisting of five of the nine members of the full court. Since the union could have filed a petition for rehearing en banc but did not do so, the argument is made that the judgment before us was not 'rendered by the highest court of a State in which a decision could be had,' and that the judgment is one we therefore have no power to review. 28 U.S.C. § 1257, 28 U.S.C.A. § 1257. This argument primarily rests upon Gorman v. Washington University, 316 U.S. 98, 62 S.Ct. 962, 86 L.Ed. 1300, which held that, in view of the structure of Missouri's judicial system, a separate division of the Supreme Court of that State was not the highest state court in which a decision of a federal question could be had. ^[4] It is evident, however, that the law governing rehearings in the Supreme Court of Washington is quite unlike the particularized provisions of Missouri law which led this Court to dismiss the writ in Gorman.

As the opinion in Gorman pointed out, the Constitution of the State of Missouri expressly conferred the right to an en banc rehearing by the Supreme Court of Missouri in any case originally decided by a division of the court in which a federal question was involved. It was this provision of the state constitution which was the basis for the conclusion in Gorman that the State of Missouri did not regard a decision by a division of the court as the final step in the state appellate process in a case involving a federal question. '(T)he constitution of Missouri,' it was said, 'has thus provided in this class of cases for review of the judgment of a division * * *.' 316 U.S. at 100, 62 S.Ct. at 963.

By contrast, a rehearing en banc before the Supreme Court of Washington is not granted as a matter of right. The Constitution and statutes of the State of Washington authorize its Supreme Court to sit in two Departments, each of which is empowered 'to hear and determine causes, and all questions arising therein.' ^[5] Cases coming before the court may be assigned to a Department or to the court en banc at the discretion of the Chief Justice and a specified number of other members of the court. ^[6] The state law further provides that the decision of a Department becomes a final judgment of the Supreme Court of Washington, unless within 30 days a petition for rehearing has been filed, or a rehearing has been ordered on the court's own initiative. ^[7]

We can discern in Washington's system no indication that the decision in the present case, rendered unanimously by a majority of the judges of the Supreme Court of Washington, was other than the final word of the State's final court. ^[8] This case is thus properly before us, and we turn to the issues which it presents.

One of those issues-whether § 301(a) of the Labor Management Relations Act of 1947 deprives state courts of jurisdiction over litigation such as this-we have decided this Term in Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483. For the reasons stated in our opinion in that case, we hold that the Washington Supreme Court was correct in ruling that it had jurisdiction over this controversy. ^[9] There remain for consideration two other issues, one of them implicated but not specifically decided in Dowd Box. Was the Washington court free, as it thought, to decide this controversy within the limited horizon of its local law? If not, does applicable federal law require a result in this case different from that reached by the state court?

In Dowd Box we proceeded upon the hypothesis that state courts would apply federal law in exercising jurisdiction over litigation within the purview of § 301(a), although in that case there was no claim of any variance in relevant legal principles as between the federal law and that of Massachusetts. In the present case, by contrast, the Washington court held that there was nothing in § 301 'limiting the substantive law to be applied,' and the court accordingly proceeded to dispose of this litigation exclusively in terms of local contract law. The union insists that the case was one to be decided by reference to federal law, and that under applicable principles of national labor law the strike was not a violation of the collective bargaining contract. We hold that in a case such as this, incompatible doctrines of local law must give way to principles of federal labor law. ^[10] We further hold, however, that application of such principles to this case leads to affirmance of the judgment before us.

It was apparently the theory of the Washington court, that, although Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972, requires the federal courts to fashion, from the policy of our national labor laws, a body of federal law for the enforcement of collective bargaining agreements, nonetheless, the courts of the States remain free to apply individualized local rules when called upon to enforce such agreements. This view cannot be accepted. The dimensions of § 301 require the conclusion that substantive principles of federal labor law must be paramount in the area covered by the statute. Comprehensiveness is inherent in the process by which the law is to be formulated under the mandate of Lincoln Mills, requiring issues raised in suits of a kind covered by § 301 to be decided according to the precepts of federal labor policy.

More important, the subject matter of § 301(a) 'is peculiarly one that calls for uniform law.' Pennsylvania R. Co. v. Public Service Comm., 250 U.S. 566, 569, 40 S.Ct. 36, 37, 64 L.Ed. 1142; see Cloverleaf Butter Co. v. Patterson, 315 U.S. 148, 167-169, 62 S.Ct. 491, 501-503, 86 L.Ed. 754. The possibility that individual contract terms might have different meanings under state and federal law would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements. Because neither party could be certain of the rights which it had obtained or conceded, the process of negotiating an agreement would be made immeasurably more difficult by the necessity of trying to formulate contract provisions in such a way as to contain the same meaning under two or more systems of law which might someday be invoked in enforcing the contract. Once the collective bargain was made, the possibility of conflicting substantive interpretation under competing legal systems would tend to stimulate and prolong disputes as to its interpretation. ^[11] Indeed, the existence of possibly conflicting legal concepts might substantially impede the parties' willingness to agree to contract terms providing for final arbitral or judicial resolution of disputes.

The importance of the area which would be affected by separate systems of substantive law makes the need for a single body of federal law particularly compelling. The ordering and adjusting of competing interests through a process of free and voluntary collective bargaining is the keystone of the federal scheme to promote industrial peace. State law which frustrates the effort of Congress to stimulate the smooth functioning of that process thus strikes at the very core of federal labor policy. With due regard to the many factors which bear upon competing state and federal interests in this area, California v. Zook, 336 U.S. 725, 730-731, 69 S.Ct. 841, 843-844, 93 L.Ed. 1005; Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230-231, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447, we cannot but conclude that in enacting § 301 Congress intended doctrines of federal labor law uniformly to prevail over inconsistent local rules.

Whether, as a matter of federal law, the strike which the union called was a violation of the collective bargaining contract is thus the ultimate issue which this case presents. It is argued that there could be no violation in the absence of a no-strike clause in the contract explicitly covering the subject of the dispute over which the strike was called. We disagree.

The collective bargaining contract expressly imposed upon both parties the duty of submitting the dispute in question to final and binding arbitration. ^[12] In a consistent course of decisions the Courts of Appeals of at least five Federal Circuits have held that a strike to settle a dispute which a collective bargaining agreement provides shall be settled exclusively and finally by compulsory arbitration constitutes a violation of the agreement. ^[13] The National Labor Relations Board has reached the same conclusion. W. L. Mead, Inc., 113 N.L.R.B. 1040. We approve that doctrine. ^[14] To hold otherwise would obviously do violence to accepted principles of traditional contract law. Even more in point, a contrary view would be completely at odds with the basic policy of national labor legislation to promote the arbitral process as a substitute for economic warfare. See United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409.

What has been said is not to suggest that a no-strike agreement is to be implied beyond the area which it has been agreed will be exclusively covered by compulsory terminal arbitration. Nor is it to suggest that there may not arise problems in specific cases as to whether compulsory and binding arbitration has been agreed upon, and, if so, as to what disputes have been made arbitrable. ^[15] But no such problems are present in this case. The grievance over which the union struck was, as it concedes, one which it had expressly agreed to settle by submission to final and binding arbitration proceedings. The strike which it called was a violation of that contractual obligation.

Affirmed.

Mr. Justice BLACK, dissenting.

Notes

1. The strike was terminated by a temporary injunction issued by the state court.
2. The amount of damages is not in issue here.
3. The court noted that the unreported memorandum opinion of the trial judge indicated a theory of liability based upon tort, rather than contract, liability. The appellate court said, however: 'From the pleadings, the theory is established that the respondent was injured by the appellant's breach of contract and this theory is clearly supported by the record. Therefore, the rule that the judgment of the trial court will be sustained on any theory established by the pleadings and supported by the proof is applicable.' 57 Wash.2d at 103, 356 P.2d at 6.
4. See also Osment v. Pitcairn, 317 U.S. 587, 63 S.Ct. 21, 87 L.Ed. 481.
5. Article IV, § 2 of the state constitution provides, in pertinent part, 'The legislature may increase the number of judges of the supreme court from time to time and may provide for separate departments of said court.'
6. Revised Code of Washington, § 2.04.150, provides:
7. Revised Code of Washington, § 2.04.160, provides:
8. See Market Street R. Co. v. Railroad Comm., 324 U.S. 548, 551-552, 65 S.Ct. 770, 772-773, 89 L.Ed. 1171. In recent years we have, without challenge, reviewed on their merits several cases decided by a Department of the Washington Supreme Court in which no petition for rehearing en banc had been filed. See, e.g., McGrath v. Rhay, 364 U.S. 279, 80 S.Ct. 1609, 4 L.Ed.2d 1719; Ross v. Schneckloth, 357 U.S. 575, 78 S.Ct. 1387, 2 L.Ed.2d 1547; United States v. Carroll Construction Co., 346 U.S. 802, 74 S.Ct. 22, 98 L.Ed. 333.
9. Since this was a suit for violation of a collective bargaining contract within the purview of § 301(a) of th eLabor Management Relations Act of 1947, the pre-emptive doctrine of cases such as San Diego Building Trades Council, etc. v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775, based upon the exclusive jurisdiction of the National Labor Relations Board, is not relevant. See United Steelworkers of America, Local 4264 v. New Park Mining Co., 273 F.2d 352 (C.A.10th Cir.); Independent Petroleum Workers v. Esso Standard Oil Co., 235 F.2d 401 (C.A.3d Cir.); see generally Lodge No. 12, District No. 37, Int'l Ass'n of Machinists v. Cameron Iron Works, Inc., 257 F.2d 467 (C.A.5th Cir.); Plumbers & Steamfitters Union, Local 598 v. Dillion, 255 F.2d 820 (C.A.9th Cir.); International Union of Operating Engineers, Local 181 v. Dahlem Const. Co., 193 F.2d 470 (C.A.6th Cir.). As pointed out in Charles Dowd Box Co. v. Courtney, 368 U.S., at 513, 82 S.Ct., at 526, Congress 'deliberately chose to leave the enforcement of collective agreements 'to the usual processes of the law." See also H.R.Conf.Rep. No. 510, 80th Cong., 1st Sess. p. 52, U.S.Code Cong.Service 1947, p. 1135. It is, of course, true that conduct which is a violation of a contractual obligation may also be conduct constituting an unfair labor practice, and what has been said is not to imply that enforcement by a court of a contract obligation affects the jurisdiction of the N.L.R.B. to remedy unfair labor practices, as such. See generally Dunau, Contractual Prohibition of Unfair Labor Practices: Jurisdictional Problems, 57 Col.L.Rev. 52.
10. Of the many state courts which have assumed jurisdiction over suits involving contracts subject to § 301, few have explicitly considered the problem of state versus federal law. McCarroll v. Los Angeles County Dist. Council of Carpenters, 49 Cal.2d 45, 60, 315 P.2d 322, 330, held that federal law must govern. Accord: Local Lodge No. 774, Int'l Ass'n of Machinists v. Cessna Aircraft Co., 186 Kan. 569, 352 P.2d 420; Harbison-Walker Refractories Co. v. United Brick and Clay Workers, Local 702, 339 S.W.2d 933, 935-936 (Ky.Ct.App.). Other courts have found it unnecessary to decide the question, because they found no conflict between state and federal law on the issues presented. Karcz v. Luther Mfg. Co., 338 Mass. 313, 317, 155 N.E.2d 441, 444; Springer v. Powder Power Tool Corp., 220 Or. 102, 106-107, 348 P.2d 1112, 1114; Clark v. Hein-Werner Corp., 8 Wis.2d 264, 277, 99 N.W.2d 132, 100 N.W.2d 317, 318 (on motion for rehearing). It bears noting, however, that these courts and others, e.g., Connecticut Co. v. Division 425, etc., Street, Electric Railway Employees, 147 Conn. 608, 622-623, 164 A.2d 413, 420, have carefully considered applicable federal precedents in resolving the litigation before them.
11. As one commentator has said: 'Words in any legal document are ambiguous, but the body of law which grows up in an area through decision helps to dispel this ambiguity. The existence of two bodies of law which cannot be accommodated by any conflict-of-laws rule, however, is calculated to aggravate rather than to alleviate the situation.' Wellington, Labor and the Federal System, 26 U. of Chi.L.Rev. 542, 557.
12. It appears that this would be true whether the dispute be considered as a 'difference as to the true interpretation of this agreement' or as a difference 'between the employer and the employee' under Article XIV of the contract. See 369 U.S., p. 96, 82 S.Ct., p. 573, supra. The union not only now concedes that the dispute as to Welsch's discharge was subject to final and binding arbitration, but, indeed, after the strike, the dispute was § arbitrated.
13. See International Brotherhood of Teamsters, etc., Union, Local 25 v. W. L. Mead, Inc., 230 F.2d 576, 583-584 (C.A.1st Cir.); United Construction Workers v. Haislip Baking Co., 223 F.2d 872, 876-877 (C.A.4th Cir.); National Labor Relations Board v. Dorsey, Trailers, Inc., 179 F.2d 589, 592 (C.A.5th Cir.); Lewis v. Benedict Coal Corp., 259 F.2d 346, 351 (C.A.6th Cir.); National Labor Relations Board v. Sunset Minerals, 211 F.2d 224, 226 (C.A.9th Cir.).
14. Deciding the case as we do upon this explicit ground, we do not adopt the reasoning of the Washington court. Insofar as the language of that court's opinion is susceptible to the construction that a strike during the term of a collective bargaining agreement is ipso facto a violation of the agreement, we expressly reject it.
15. With respect to such problems, compare International Union, United Mine Workers of America v. National Labor Relations Board, 103 U.S.App.D.C. 207, 257 F.2d 211, with Lewis v. Benedict Coal Corp., 6 Cir., 259 F.2d 346 (affirmed on this question by an equally divided Court, 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442), for differing interpretations of an identical contract.