15 N.Y.2d 380 (1965)

In labor disputes with collective bargaining agreements containing arbitration clauses, procedural questions regarding compliance with preliminary steps are presumed arbitrable and should be decided by the arbitrator, not the court.

Summary

Long Island Lumber Co. (the Company) sought to stay arbitration demanded by Local 824 (the Union) regarding wage discrepancies for an employee. The Company argued the Union failed to follow preliminary grievance procedures before demanding arbitration. The New York Court of Appeals reversed the lower courts’ decisions to stay arbitration, holding that procedural issues, including compliance with preliminary steps in a grievance process, are arbitrable questions for the arbitrator to decide, especially in the context of collective bargaining agreements. The court emphasized the strong presumption of arbitrability in labor disputes, aligning with federal labor law and policy promoting peaceful resolution through arbitration.

Facts

The Company and the Union were parties to a collective bargaining agreement with a grievance and arbitration clause. The Union alleged that an employee, Louis Bostic, was not receiving the wages stipulated in the agreement. The Union contacted the Company, and a meeting was held on November 13, 1962, attended by union officers, Mrs. Rosen (Company secretary), and Bostic. The Company claimed Bostic was employed by another entity and denied the wage claim. On December 4, 1962, the Union served the Company with a request for arbitration before the Trucking Industry Arbitration Authority. The Company contended that the November 13 meeting was merely a discussion and that the Union failed to properly constitute an arbitration committee as a precondition to further arbitration.

Procedural History

The Company sought a stay of arbitration in Special Term, which was granted. The Appellate Division affirmed this decision. The Union appealed to the New York Court of Appeals.

Issue(s)

1. Whether, under a collective bargaining agreement with an arbitration clause, a court should decide if the Union satisfied the procedural prerequisites to arbitration, or whether that determination is for the arbitrator.

Holding

1. No, because under federal labor law, procedural questions arising out of a dispute subject to arbitration are themselves to be decided by the arbitrator, unless the agreement explicitly states otherwise.

Court’s Reasoning

The Court of Appeals relied heavily on federal labor law, particularly Section 301 of the Labor Management Relations Act, which governs the interpretation and enforcement of collective bargaining agreements. The Court emphasized the presumption of arbitrability in labor disputes, citing the Steelworkers Trilogy (Steelworkers v. Warrior & Gulf Co., Steelworkers v. American Mfg. Co., and Steelworkers v. Enterprise Corp.). The court adopted the reasoning in John Wiley & Sons v. Livingston, which held that procedural questions that grow out of a dispute and bear on its final disposition should be left to the arbitrator. The court stated, “Once it is determined, as we have, that the parties are obligated to submit the subject matter of a dispute to arbitration, `procedural’ questions which grow out of the dispute and bear on its final disposition should be left to the arbitrator.” The court reasoned that separating substantive and procedural issues between different forums would be illogical and inefficient. The court found no unmistakably clear language in the agreement rebutting the presumption of arbitrability for procedural matters. It noted the arbitration clause was broad, covering “all grievances” and “all disputes with respect to the interpretation of this agreement”. Therefore, the arbitrator should decide whether the Union complied with the agreement’s preliminary steps. Even if the issue was contract interpretation, the court stated that the procedural questions also raise issues of interpretation which are plainly arbitrable. While the Court acknowledged a different rule might apply in commercial arbitration, the unique economic circumstances of collective bargaining necessitate resolving disputes through arbitration.