United Steelworkers of America v. American Manufacturing Co.
4 L. Ed. 2d 1403, 80 S. Ct. 1343 (1960)
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Rule of Law:
When a collective bargaining agreement contains an arbitration clause, a court's function is limited to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract; courts may not weigh the merits of the grievance or deny arbitration because a claim seems frivolous.
Facts:
- Sparks, an employee of American Manufacturing Co. and a member of the United Steelworkers union, left his job due to a work-related injury.
- Sparks filed a workmen's compensation claim against the company, which was settled on the basis that a physician found him to be 25% 'permanently partially disabled.'
- Two weeks after the settlement, the union filed a grievance on Sparks's behalf.
- The grievance asserted that Sparks was entitled to return to his job based on the seniority provision of the collective bargaining agreement.
- The collective bargaining agreement contained a clause providing for arbitration of all disputes 'as to the meaning, interpretation and application of the provisions of this agreement.'
- The agreement also included a 'no-strike' clause.
- American Manufacturing Co. refused the union's request to submit the grievance to arbitration.
Procedural Posture:
- The United Steelworkers of America sued American Manufacturing Co. in U.S. District Court to compel arbitration of an employee's grievance.
- The District Court granted summary judgment in favor of the employer, holding the employee was estopped from making his claim.
- The union (appellant) appealed to the U.S. Court of Appeals for the Sixth Circuit.
- The Court of Appeals affirmed the lower court's judgment, reasoning that the grievance was 'frivolous, patently baseless one, not subject to arbitration.'
- The U.S. Supreme Court granted the union's petition for a writ of certiorari.
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Issue:
Does a federal court have the authority to weigh the merits of a grievance and deny a request to compel arbitration when it determines the grievance is frivolous or baseless?
Opinions:
Majority - Douglas, J.
No. When a collective bargaining agreement includes an arbitration clause, a court may not evaluate the merits of the underlying grievance. The court's role is confined to determining whether the claim, on its face, is governed by the contract. The federal policy expressed in the Labor Management Relations Act favors arbitration as the means of settling labor disputes. The agreement to arbitrate all grievances is the quid pro quo for the union's agreement not to strike. The judiciary usurps the function of the arbitrator when it determines the merits of a grievance under the guise of interpreting the arbitration clause, as the parties bargained for the arbitrator's judgment, not the court's. The processing of even frivolous claims can have therapeutic value in maintaining industrial peace.
Concurring - Brennan, J.
No. A court asked to enforce a promise to arbitrate should ordinarily refrain from involving itself in the interpretation of the substantive provisions of the contract. Since arbitration is a matter of contract, a court must determine whether the parties agreed to arbitrate the particular dispute. However, when an agreement contains a standard, broad arbitration clause, the court's function is exhausted once it finds the moving party is asserting a claim that involves the construction of the contract's substantive provisions. The parties bargained for the specialized knowledge and judgment of an arbitrator, not a judge, to resolve their disputes.
Analysis:
This case, one of the foundational Steelworkers Trilogy, establishes a strong presumption of arbitrability in federal labor law. By severely limiting the judicial function to a threshold inquiry of whether a claim is governed by the contract, the Court shifts power from the judiciary to arbitrators. This decision ensures that arbitration clauses are given full effect and prevents courts from blocking arbitration by delving into the merits of a dispute, thereby strengthening the role of arbitration as a cornerstone of industrial self-government and peace.
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