Deaton Truck Line, Inc. v. Local Union 612
314 F.2d 418 (1963)
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Rule of Law:
Under Section 301 of the Taft-Hartley Act, a federal court has jurisdiction to compel arbitration over disputes arising from a contract between an employer and a union, even if the dispute concerns independent contractors, so long as the agreement is significant to maintaining labor peace. If the parties' chosen method for selecting an arbitrator fails, the court may exercise its authority to appoint one.
Facts:
- Deaton Truck Line, Inc. (Deaton), a common carrier, operated primarily by leasing tractors from owner-drivers, most of whom drove their own units.
- Deaton and Local Union 612 entered into a collective bargaining agreement effective from 1959 to 1962, which stated it covered 'Mechanics, Helpers, Drivers, Driver Owners, etc.'
- The agreement contained a clause stipulating that if the Alabama mileage tax were repealed and license tag costs increased, Deaton would pay the operators an amount equivalent to the old tax to offset the increased tag cost.
- The agreement also included a provision that the company's city truck driver, Harry Williams, would be paid the 'prevailing Birmingham rate.'
- The state of Alabama subsequently repealed the mileage tax and increased the cost of license tags.
- A dispute arose when Deaton refused the Union's demand to pay for the increased license tag costs for the owner-drivers.
- A separate dispute arose over the wage rate for Deaton's city truck driver, Harry Williams, with the Union claiming he was being paid less than the prevailing rate.
Procedural Posture:
- Local Union 612 sued Deaton Truck Line, Inc. in U.S. District Court, seeking an order for specific performance to compel arbitration of two grievances.
- The district court (trial court) ordered Deaton to submit both issues to arbitration.
- The district court's decree also provided that the court would appoint an arbitrator if the parties could not agree on one within a specified time.
- Deaton Truck Line, Inc. (as appellant) appealed the district court's judgment to the United States Court of Appeals for the Fifth Circuit.
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Issue:
Does Section 301 of the Taft-Hartley Act grant a federal court jurisdiction to compel arbitration over a contract dispute concerning payments to truck owner-drivers, who may be independent contractors rather than employees, when the dispute arises under an agreement between an employer and a labor union?
Opinions:
Majority - Rives, Circuit Judge
Yes. Section 301 of the Taft-Hartley Act grants federal courts jurisdiction to compel arbitration over such disputes. The court reasoned that the term 'contracts' in Section 301 is not limited to collective bargaining agreements covering only 'employees' but extends to any agreement 'significant to the maintenance of labor peace,' citing Retail Clerks v. Lion Dry Goods. The court found it unnecessary to determine the precise employment status of the owner-drivers, as provisions governing their compensation are integral to protecting the wage structure of the acknowledged employee-drivers, following the precedent of Teamsters v. Oliver. Because the agreement was between an employer and a union representing at least some employees, Section 301 jurisdiction applies. The court also held that procedural questions, such as the merits of the grievance and compliance with preliminary steps, are for the arbitrator to decide. Finally, drawing on the 'judicial inventiveness' concept from Textile Workers v. Lincoln Mills, the court affirmed its authority to appoint an arbitrator if the parties fail to agree on one, thereby preventing the breakdown of the arbitration process.
Concurring - Jones, Circuit Judge
Judge Jones concurred but expressed doubt that the appointment of an arbitrator in a labor dispute is a proper judicial function for a federal court. He suggested that the validity and desirability of the court assuming this power should have been more explicitly addressed in the majority opinion.
Analysis:
This decision reinforces the broad scope of federal court jurisdiction under Section 301 of the Taft-Hartley Act, extending it to disputes involving non-traditional employment relationships like independent contractors when their terms of engagement affect the union's interest in maintaining stable wage standards. It solidifies the principle that the court's role is to determine arbitrability, not to rule on the merits of the underlying grievance, pushing such substantive questions to the arbitrator. The case is also significant for establishing that federal courts have the remedial power to appoint an arbitrator when an agreement's selection mechanism fails, ensuring that arbitration clauses are not rendered unenforceable by a party's refusal to cooperate.
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