O'MALLEY v. Wilshire Oil Co.

381 P.2d 188, 59 Cal. 2d 482, 30 Cal. Rptr. 452, 1963 Cal. LEXIS 179, 53 L.R.R.M. (BNA) 2159
CourtCalifornia Supreme Court
DecidedMay 7, 1963
DocketL. A. 26771
StatusPublished
Cited by61 cases

This text of 381 P.2d 188 (O'MALLEY v. Wilshire Oil Co.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'MALLEY v. Wilshire Oil Co., 381 P.2d 188, 59 Cal. 2d 482, 30 Cal. Rptr. 452, 1963 Cal. LEXIS 179, 53 L.R.R.M. (BNA) 2159 (Cal. 1963).

Opinions

TOBRINER, J.

While the parties to a collective bargaining agreement may delineate the scope of an arbitration provision according to their design, neither the language of the provision in the instant ease, nor the facts, support the contention that the arbitration procedure excluded the arbitrability of the present grievance of the union. We hold, for the reasons that follow, that the trial court, by accepting the posited contentions of the defendant, improperly resolved the merits of the dispute. Instead of narrowly and exclusively determining the question of arbitrability, the court invaded the province of the arbitrator.

Plaintiff 0 ’Malley is president of, and sues in a representative capacity for, the Oil, Chemical and Atomic Workers International, Union Local 1-128, AFL-CIO (hereinafter termed “union”). Defendant, the Wilshire Oil Company (hereinafter termed “company”) is engaged in the manufacture and processing of petroleum in interstate commerce. Since 1948 the union has been the certified bargaining agent of the company’s employees.

[485]*485In April of 1959 the union and the company entered into a collective bargaining agreement covering wages, hours and working conditions of the company’s employees. Among other matters, the agreement contained a recognition clause, a no-strike clause, and a provision relating to contracting out of work. The agreement established a grievance procedure culminating in arbitration for the resolution of disputes with regard to the agreement.1

In December 1960 the union submitted a grievance, which, in substance, protested the contracting out by the company of some of its transportation work. Subsequently, the company rejected the grievance. The union, pursuant to the established procedure, sought arbitration of the dispute. The company refused to submit the dispute to arbitration. As a result, the union filed a petition for an order directing arbitration.

In its petition the union incorporated by reference the statement of the grievance contained in its letter to the company, which alleged as to contract work the company's violation of article 152 and “any other Article or Articles that may be found to be violated in the process of settling the complaint.” The petition concluded that a dispute therefore existed with regard to “the interpretation and application” of the contract, thereby requiring arbitration.

In its answer to the petition the company relied on language in article 22 of the agreement with respect to arbitration to the effect that: “Under no circumstances may an arbitration decision in any manner nullify, amend, modify, extend, reduce or otherwise change any of the terms or conditions of this Agreement. ...” The company then set out efforts of the union, prior to and after the grievance, to [486]*486modify article 15 in order to include more explicit and stringent limitations upon the company’s right to contract out work. The company contended that since the practice of contracting out transportation work had long been a company policy and since the union’s proposals for its limitation had been rejected at the collective bargaining table, the agreement permitted such policy and the grievance was specifically excluded from arbitration.

The trial court denied the request of the petition, concluding that: “ [Interpreting the Articles of Agreement of April 10, 1959 in accordance with the intentions of the parties as therein expressed and in the light of all of the facts and circumstances surrounding the negotiations for and execution of prior and subsequent agreements, no agreement can be found between Respondent and Petitioner which requires the arbitration of grievances arising out of or based upon the contracting out of transportation work. ’ ’

In the enforcement of provisions of collective bargaining agreements obligating the parties to arbitrate disputes, state courts exercise concurrent jurisdiction with federal courts. (Charles Dowd Box Co. v. Courtney (1962) 368 U.S. 502 [82 S.Ct. 519, 7 L.Ed.2d 483].) In so doing state courts must, however, in adjudicating an action which could have been brought in the federal courts under section 301 of the Labor Management Relations Act, apply federal law. (Local 174 Teamsters, etc. of America v. Lucas Flour Co. (1962) 369 U.S. 95 [82 S.Ct. 571, 7 L.Ed.2d 593].) Since in the instant case the company is engaged in interstate commerce, the parties agree that federal law must necessarily govern.

The wellspring of federal law respecting the enforcement of arbitration agreements consists of three cases decided by the Supreme Court in I960.3 As we shall point out, these decisions, recognizing the special nature of the collective bargaining agreement and the crucial role of the arbitrator in resolving disputes arising under it, narrowly confine the role of the court as contrasted with that of the arbitrator.

We have recently analyzed this trilogy of United States Supreme Court cases in Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169 [14 Cal.Rptr. 297, 363 P.2d 313], In that case [487]*487we criticized the prior doctrine o£ International Assn. of Machinists v. Cutler-Hammer, Inc. (1947) 271 App. Div. 917 [67 N.Y.S.2d 317]; affd. 297 N.Y. 519 [74 N.E.2d 464], Cutler-Hammer had held that a court could properly reject a petition to arbitrate a matter which, in the court’s view, did not compose an arbitrable issue because petitioner’s asserted interpretation of the contract transgressed the plain meaning of the words.4

In Posner we described and adopted the ruling of the Supreme Court cases; we said: “This rule is to the effect that, where the collective bargaining agreement provides for arbitration of all disputes pertaining to the meaning, interpretation and application of the collective bargaining agreement and its provisions, any dispute as to the meaning, interpretation and application of any specific matter covered by the collective bargaining agreement is a matter for arbitration. Doubts as to whether the arbitration clause applies are to be resolved in favor of coverage. The parties have contracted for an arbitrator’s decision and not for that of the courts.” (56 Cal.2d at p. 175.) Although the issue in Posner did not involve interstate commerce and therefore did not necessarily invoke the federal rule as described by the United States Supreme Court, we nevertheless as a matter of policy followed the federal approach. We held that the trial court, instead of confining itself to the issue of whether the dispute was subject to arbitration, improperly passed upon the merits of the issue.

4We believe the United States Supreme Court eases are dis-positive of the present problem. Thus in United Steelworkers of America v. American Mfg. Co., supra (1960) 363 U.S. 564 [80 S.Ct.

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Bluebook (online)
381 P.2d 188, 59 Cal. 2d 482, 30 Cal. Rptr. 452, 1963 Cal. LEXIS 179, 53 L.R.R.M. (BNA) 2159, Counsel Stack Legal Research, https://law.counselstack.com/opinion/omalley-v-wilshire-oil-co-cal-1963.