This suit under § 301 (a) of the Labor Management Relations Act,
1947, was brought by a labor union to compel arbitration of a
grievance based upon the employer's practice of contracting out
work while laying off employees who could have performed such work.
The collective bargaining agreement between the parties contained
"no strike" and "no lock-out" provisions, and set up a grievance
procedure culminating in arbitration. It provided that "matters
which are strictly a function of management shall not be subject to
arbitration," but it also provided that,
"Should differences arise . . . as to the meaning and
application of the provisions of this Agreement, or should any
local trouble of any kind arise,"
the grievance procedure should be followed. The Court of Appeals
ruled that deciding whether to contract out work was "strictly a
function of management" within the meaning of the agreement, and it
sustained a judgment of the District Court dismissing the
complaint.
Held: It erred in doing so, and the judgment is
reversed. Pp.
363 U. S.
575-585.
(a) In a suit under §301(a), judicial inquiry must be strictly
confined to the question whether the reluctant party did agree to
arbitrate the grievance or to give the arbitrator power to make the
award he made; an order to arbitrate the particular grievance
should not be denied unless it may be said with positive assurance
that the arbitration clause is not susceptible of an interpretation
that covers the asserted dispute; and doubts should be resolved in
favor of coverage. Pp.
363 U. S.
582-583.
(b) In the absence of any express provision excluding a
particular grievance from arbitration, only the most forceful
evidence of a purpose to exclude the claim from arbitration can
prevail, particularly where, as here, the exclusion clause is
vague, and the arbitration clause quite broad. Pp.
363 U. S.
583-585.
(c) Since, in this case, the parties had agreed that any dispute
"as to the meaning of this Agreement" would be determined by
Page 363 U. S. 575
arbitration, it was for the arbitrator, not the courts, to
decide whether the contracting out here involved violated the
agreement. P.
363 U. S.
585.
269 F.2d 633, reversed.
Opinion of the Court by MR. JUSTICE DOUGLAS, announced by MR.
JUSTICE BRENNAN.
Respondent transports steel and steel products by barge and
maintains a terminal at Chickasaw, Alabama, where it performs
maintenance and repair work on its barges. The employees at that
terminal constitute a bargaining unit covered by a collective
bargaining agreement negotiated by petitioner union. Respondent,
between 1956 and 1958, laid off some employees, reducing the
bargaining unit from 42 to 23 men. This reduction was due in part
to respondent's contracting maintenance work, previously done by
its employees, to other companies. The latter used respondent's
supervisors to lay out the work and hired some of the laid-off
employees of respondent (at reduced wages). Some were in fact
assigned to work on respondent's barges. A number of employees
signed a grievance which petitioner presented to respondent, the
grievance reading:
"We are hereby protesting the Company's actions of arbitrarily
and unreasonably contracting out work to other concerns that could
and previously has been performed by Company employees. "
"This practice becomes unreasonable, unjust and discriminatory
in lieu [
sic] of the fact that, at present,
Page 363 U. S. 576
there are a number of employees that have been laid off for
about 1 and 1/2 years or more for allegedly lack of work. "
"Confronted with these facts, we charge that the Company is in
violation of the contract by inducing a partial lock-out, of a
number of the employees who would otherwise be working were it not
for this unfair practice."
The collective agreement had both a "no strike" and a "no
lockout" provision. It also had a grievance procedure which
provided in relevant part as follows:
"Issues which conflict with any Federal statute in its
application as established by Court procedure or matters which are
strictly a function of management shall not be subject to
arbitration under this section. "
"Should differences arise between the Company and the Union or
its members employed by the Company as to the meaning and
application of the provisions of this Agreement, or should any
local trouble of any kind arise, there shall be no suspension of
work on account of such differences but an earnest effort shall be
made to settle such differences immediately in the following
manner:"
"A. For Maintenance Employees:"
"First, between the aggrieved employees, and the Foreman
involved;"
"Second, between a member or members of the Grievance Committee
designated by the Union, and the Foreman and Master Mechanic."
"
* * * *"
"Fifth, if agreement has not been reached the matter shall be
referred to an impartial umpire for decision. The parties shall
meet to decide on an umpire acceptable to both. If no agreement on
selection of an umpire is reached, the parties shall jointly
petition
Page 363 U. S. 577
the United States Conciliation Service for suggestion of a list
of umpires from which selection shall be made. The decision of the
umpire will be final."
Settlement of this grievance was not had, and respondent refused
arbitration. This suit was then commenced by the union to compel
it. [
Footnote 1]
The District Court granted respondent's motion to dismiss the
complaint.
168 F.
Supp. 702. It held, after hearing evidence, much of which went
to the merits of the grievance, that the agreement did not "confide
in an arbitrator the right to review the defendant's business
judgment in contracting out work."
Id. at 705. It further
held that
"the contracting out of repair and maintenance work, as well as
construction work, is strictly a function of management not limited
in any respect by the labor agreement involved here."
Ibid. The Court of Appeals affirmed by a divided vote,
269 F.2d 633, 635, the majority holding that the collective
agreement had withdrawn from the grievance procedure "matters which
are strictly a function of management," and that contracting out
fell in that exception. The case is here on a writ of certiorari.
361 U.S. 912.
We held in
Textile Workers v. Lincoln Mills,
353 U. S. 448,
that a grievance arbitration provision in a collective agreement
could be enforced by reason of § 301(a) of the Labor Management
Relations Act [
Footnote 2] and
that the policy to be applied in enforcing this type of
arbitration
Page 363 U. S. 578
was that reflected in our national labor laws.
Id. at
353 U. S.
456-457. The present federal policy is to promote
industrial stabilization through the collective bargaining
agreement. [
Footnote 3]
Id. at
353 U. S.
453-454. A major factor in achieving industrial peace is
the inclusion of a provision for arbitration of grievances in the
collective bargaining agreement. [
Footnote 4]
Thus, the run of arbitration cases, illustrated by
Wilko v.
Swan, 346 U. S. 427,
becomes irrelevant to our problem. There, the choice is between the
adjudication of cases or controversies in courts with established
procedures or even special statutory safeguards, on the one hand,
and the settlement of them in the more informal arbitration
tribunal, on the other. In the commercial case, arbitration is the
substitute for litigation. Here, arbitration is the substitute for
industrial strife. Since arbitration of labor disputes has quite
different functions from arbitration under an ordinary commercial
agreement, the hostility evinced by courts toward arbitration of
commercial agreements has no place here. For arbitration of labor
disputes under collective bargaining agreements is part and parcel
of the collective bargaining process itself.
The collective bargaining agreement states the rights and duties
of the parties. It is more than a contract; it is a generalized
code to govern a myriad of cases which the draftsmen cannot wholly
anticipate.
See Shulman, Reason, Contract, and Law in
Labor Relations, 68 Harv.L.Rev.
Page 363 U. S. 579
999, 1004-1005. The collective agreement covers the whole
employment relationship. [
Footnote
5] It calls into being a new common law -- the common law of a
particular industry or of a particular plant. As one observer has
put it: [
Footnote 6]
". . . [I]t is not unqualifiedly true that a collective
bargaining agreement is simply a document by which the union and
employees have imposed upon management limited, express
restrictions of its otherwise absolute right to manage the
enterprise, so that an employee's claim must fail unless he can
point to a specific contract provision upon which the claim is
founded. There are too many people, too many problems, too many
unforeseeable contingencies to make the words of the contract the
exclusive source of rights and duties. One cannot reduce all the
rules governing a community like an industrial plant to fifteen or
even fifty pages. Within the sphere of collective bargaining, the
institutional characteristics
Page 363 U. S. 580
and the governmental nature of the collective bargaining process
demand a common law of the shop which implements and furnishes the
context of the agreement. We must assume that intelligent
negotiators acknowledged so plain a need unless they stated a
contrary rule in plain words."
A collective bargaining agreement is an effort to erect a system
of industrial self-government. When most parties enter into
contractual relationship, they do so voluntarily, in the sense that
there is no real compulsion to deal with one another, as opposed to
dealing with other parties. This is not true of the labor
agreement. The choice is generally not between entering or refusing
to enter into a relationship, for that in all probability preexists
the negotiations. Rather, it is between having that relationship
governed by an agreed-upon rule of law or leaving each and every
matter subject to a temporary resolution dependent solely upon the
relative strength, at any given moment, of the contending forces.
The mature labor agreement may attempt to regulate all aspects of
the complicated relationship, from the most crucial to the most
minute over an extended period of time. Because of the compulsion
to reach agreement and the breadth of the matters covered, as well
as the need for a fairly concise and readable instrument, the
product of negotiations (the written document) is, in the words of
the late Dean Shulman,
"a compilation of diverse provisions: some provide objective
criteria almost automatically applicable; some provide more or less
specific standards which require reason and judgment in their
application; and some do little more than leave problems to future
consideration with an expression of hope and good faith."
Shulman,
supra, at 1005. Gaps may be left to be filled
in by reference to the practices of the particular industry and of
the various shops covered by the agreement. Many of the specific
practices
Page 363 U. S. 581
which underlie the agreement may be unknown, except in hazy
form, even to the negotiators. Courts and arbitration in the
context of most commercial contracts are resorted to because there
has been a breakdown in the working relationship of the parties;
such resort is the unwanted exception. But the grievance machinery
under a collective bargaining agreement is at the very heart of the
system of industrial self-government. Arbitration is the means of
solving the unforeseeable by molding a system of private law for
all the problems which may arise and to provide for their solution
in a way which will generally accord with the variant needs and
desires of the parties. The processing of disputes through the
grievance machinery is actually a vehicle by which meaning and
content are given to the collective bargaining agreement.
Apart from matters that the parties specifically exclude, all of
the questions on which the parties disagree must therefore come
within the scope of the grievance and arbitration provisions of the
collective agreement. The grievance procedure is, in other words, a
part of the continuous collective bargaining process. It, rather
than a strike, is the terminal point of a disagreement.
The labor arbitrator performs functions which are not normal to
the courts; the considerations which help him fashion judgments may
indeed by foreign to the competence of courts.
"A proper conception of the arbitrator's function is basic. He
is not a public tribunal imposed upon the parties by superior
authority which the parties are obliged to accept. He has no
general charter to administer justice for a community which
transcends the parties. He is rather part of a system of
self-government created by and confined to the parties. . . ."
Shulman,
supra, at 1016.
The labor arbitrator's source of law is not confined to the
express provisions of the contract, as the industrial
Page 363 U. S. 582
common law -- the practices of the industry and the shop -- is
equally a part of the collective bargaining agreement, although not
expressed in it. The labor arbitrator is usually chosen because of
the parties' confidence in his knowledge of the common law of the
shop and their trust in his personal judgment to bring to bear
considerations which are not expressed in the contract as criteria
for judgment. The parties expect that his judgment of a particular
grievance will reflect not only what the contract says but, insofar
as the collective bargaining agreement permits, such factors as the
effect upon productivity of a particular result, its consequence to
the morale of the shop, his judgment whether tensions will be
heightened or diminished. For the parties' objective in using the
arbitration process is primarily to further their common goal of
uninterrupted production under the agreement, to make the agreement
serve their specialized needs. The ablest judge cannot be expected
to bring the same experience and competence to bear upon the
determination of a grievance, because he cannot be similarly
informed.
The Congress, however, has, by § 301 of the Labor Management
Relations Act, assigned the courts the duty of determining whether
the reluctant party has breached his promise to arbitrate. For
arbitration is a matter of contract, and a party cannot be required
to submit to arbitration any dispute which he has not agreed so to
submit. Yet, to be consistent with congressional policy in favor of
settlement of disputes by the parties through the machinery of
arbitration, the judicial inquiry under § 301 must be strictly
confined to the question whether the reluctant party did agree to
arbitrate the grievance or did agree to give the arbitrator power
to make the award he made. An order to arbitrate the particular
grievance should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an
interpretation
Page 363 U. S. 583
that covers the asserted dispute. Doubts should be resolved in
favor of coverage. [
Footnote
7]
We do not agree with the lower courts that contracting-out
grievances were necessarily excepted from the grievance procedure
of this agreement. To be sure, the agreement provides that "matters
which are strictly a function of management shall not be subject to
arbitration." But it goes on to say that, if "differences" arise or
if "any local trouble of any kind" arises, the grievance procedure
shall be applicable.
Collective bargaining agreements regulate or restrict the
exercise of management functions; they do not oust management from
the performance of them. Management hires and fires, pays and
promotes, supervises and plans. All these are part of its function,
and, absent a collective bargaining agreement, it may be exercised
freely except as limited by public law and by the willingness of
employees to work under the particular, unilaterally imposed
conditions. A collective bargaining agreement may treat only with
certain specific practices, leaving the rest to management but
subject to the possibility of work stoppages. When, however, an
absolute no-strike clause is included in the agreement, then, in a
very real sense, everything that management does is subject to the
agreement, for either management is prohibited or limited in the
action it takes or, if not, it is protected from interference by
strikes. This comprehensive reach of the collective bargaining
agreement does not mean,
Page 363 U. S. 584
however, that the language, "strictly a function of management,"
has no meaning.
"Strictly a function of management" might be thought to refer to
any practice of management in which, under particular circumstances
prescribed by the agreement, it is permitted to indulge. But if
courts, in order to determine arbitrability, were allowed to
determine what is permitted and what is not, the arbitration clause
would be swallowed up by the exception. Every grievance in a sense
involves a claim that management has violated some provision of the
agreement.
Accordingly, "strictly a function of management" must be
interpreted as referring only to that over which the contract gives
management complete control and unfettered discretion. Respondent
claims that the contracting out of work falls within this category.
Contracting out work is the basis of many grievances; and that type
of claim is grist in the mills of the arbitrators. [
Footnote 8] A specific collective bargaining
agreement may exclude contracting out from the grievance procedure.
Or a written collateral agreement may make clear that contracting
out was not a matter for arbitration. In such a case, a grievance
based solely on contracting out would not be arbitrable. Here,
however, there is no such provision. Nor is there any showing that
the parties designed the phrase "strictly a function of management"
to encompass any and all forms of contracting out. In the absence
of any
Page 363 U. S. 585
express provision excluding a particular grievance from
arbitration, we think only the most forceful evidence of a purpose
to exclude the claim from arbitration can prevail, particularly
where, as here, the exclusion clause is vague and the arbitration
clause quite broad. Since any attempt by a court to infer such a
purpose necessarily comprehends the merits, the court should view
with suspicion an attempt to persuade it to become entangled in the
construction of the substantive provisions of a labor agreement,
even through the back door of interpreting the arbitration clause,
when the alternative is to utilize the services of an
arbitrator.
The grievance alleged that the contracting out was a violation
of the collective bargaining agreement. There was, therefore, a
dispute "as to the meaning and application of the provisions of
this Agreement" which the parties had agreed would be determined by
arbitration.
The judiciary sits in these cases to bring into operation an
arbitral process which substitutes a regime of peaceful settlement
for the older regime of industrial conflict. Whether contracting
out in the present case violated the agreement is the question. It
is a question for the arbiter, not for the courts.
Reversed.
MR. JUSTICE FRANKFURTER concurs in the result.
MR. JUSTICE BLACK took no part in the consideration or decision
of this case.
(For opinion of MR. JUSTICE BRENNAN, joined by MR. JUSTICE
FRANKFURTER and MR. JUSTICE HARLAN,
see ante, p.
363 U. S.
569.)
[
Footnote 1]
Section 301(a) of the Labor Management Relations Act, 1947, 61
Stat. 156, 29 U.S.C. § 185(a), provides:
"Suits for violation of contracts between an employer and a
labor organization representing employees in an industry affecting
commerce as defined in this Act, or between any such labor
organizations, may be brought in any district court of the United
States having jurisdiction of the parties, without respect to the
amount in controversy or without regard to the citizenship of the
parties."
See Textile Workers v. Lincoln Mills, 353 U.
S. 448.
[
Footnote 2]
Note 1 supra.
[
Footnote 3]
In § 8(d) of the National Labor Relations Act, as amended by the
1947 Act, 29 U.S.C. § 158(d), Congress indeed provided that where
there was a collective agreement for a fixed term, the duty to
bargain did not require either party "to discuss or agree to any
modification of the terms and conditions contained in" the
contract.
And see National Labor Relations Board v. Sands Mfg.
Co., 306 U. S. 332.
[
Footnote 4]
Complete effectuation of the federal policy is achieved when the
agreement contains both an arbitration provision for all unresolved
grievances and an absolute prohibition of strikes, the arbitration
agreement being the "
quid pro quo" for the agreement not
to strike.
Textile Workers v. Lincoln Mills, 353 U.
S. 448,
353 U. S.
455.
[
Footnote 5]
"Contracts which ban strikes often provide for lifting the ban
under certain conditions. Unconditional pledges against strikes
are, however, somewhat more frequent than conditional ones. Where
conditions are attached to no-strike pledges, one or both of two
approaches may be used: certain subjects may be exempted from the
scope of the pledge, or the pledge may be lifted after certain
procedures are followed by the union. (Similar qualifications may
be made in pledges against lockouts.)"
"Most frequent conditions for lifting no-strike pledges are: (1)
the occurrence of a deadlock in wage reopening negotiations; and
(2) violation of the contract, especially noncompliance with the
grievance procedure and failure to abide by an arbitration
award."
"No-strike pledges may also be lifted after compliance with
specified procedures. Some contracts permit the union to strike
after the grievance procedure has been exhausted without a
settlement, and where arbitration is not prescribed as the final
recourse. Other contracts permit a strike if mediation efforts
fail, or after a specified cooling-off period."
Collective Bargaining, Negotiations and Contracts, Bureau of
National Affairs, Inc., 77:101.
[
Footnote 6]
Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1482,
1498-1499 (1959).
[
Footnote 7]
It is clear that, under both the agreement in this case and that
involved in
American Manufacturing Co., ante, p.
363 U. S. 564, the
question of arbitrability is for the courts to decide.
Cf.
Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1482,
1508-1509. Where the assertion by the claimant is that the parties
excluded from court determination not merely the decision of the
merits of the grievance, but also the question of its
arbitrability, vesting power to make both decisions in the
arbitrator, the claimant must bear the burden of a clear
demonstration of that purpose.
[
Footnote 8]
See Celanese Corp. of America, 33 Lab.Arb.Rep. 925, 941
(1959), where the arbiter in a grievance growing out of contracting
out work said:
"In my research, I have located 64 published decisions which
have been concerned with this issue covering a wide range of
factual situations, but all of them with the common characteristic
--
i.e., the contracting-out of work involved occurred
under an Agreement that contained no provision that specifically
mentioned contracting-out of work."
MR. JUSTICE WHITTAKER, dissenting.
Until today, I have understood it to be the unquestioned law, as
this Court has consistently held, that arbitrators are private
judges chosen by the parties to decide
Page 363 U. S. 586
particular matters specifically submitted; [
Footnote 2/1] that the contract under which matters
are submitted to arbitrators is at once the source and limit of
their authority and power; [
Footnote
2/2] and that their power to decide issues with finality, thus
ousting the normal functions of the courts, must rest upon a clear,
definitive agreement of the parties, as such powers can never be
implied.
United States v. Moorman, 338 U.
S. 457,
338 U. S. 462;
[
Footnote 2/3]
Mercantile Trust
Co. v. Hensey, 205 U. S. 298,
205 U. S. 309.
[
Footnote 2/4]
See also
Fernandez & Hnos. v. Rickert Rice Mills, 119 F.2d 809,
815; [
Footnote 2/5]
Marchant v.
Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386, 391;
[
Footnote 2/6]
Continental
Milling & Feed Co.
Page 363 U. S. 587
v. Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450;
[
Footnote 2/7]
Jacob v.
Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067. [
Footnote 2/8] I believe that the Court today
departs from the established principles announced in these
decisions.
Here, the employer operates a shop for the normal maintenance of
its barges, but it is not equipped to make major repairs, and
accordingly the employer has, from the beginning of its operations
more than 19 years ago, contracted out its major repair work.
During most, if not all, of this time, the union has represented
the employees in that unit. The District Court found that,
"[t]hroughout the successive labor agreements between these
parties, including the present one, . . . [the union] has
unsuccessfully sought to negotiate changes in the labor contracts,
and particularly during the negotiation of the present labor
agreement, . . . which would have limited
Page 363 U. S. 588
the right of the [employer] to continue the practice of
contracting out such work."
168 F.
Supp. 702, 704-705.
The labor agreement involved here provides for arbitration of
disputes respecting the interpretation and application of the
agreement and, arguably, also some other things. But the first
paragraph of the arbitration section says: "[M]atters which are
strictly a function of management shall not be subject to
arbitration under this section." Although acquiescing for 19 years
in the employer's interpretation that contracting out work was
"strictly a function of management," and having repeatedly tried --
particularly in the negotiation of the agreement involved here --
but unsuccessfully, to induce the employer to agree to a covenant
that would prohibit it from contracting out work, the union, after
having agreed to and signed the contract involved, presented a
"grievance" on the ground that the employer's contracting out work,
at a time when some employees in the unit were laid off for lack of
work, constituted a partial "lockout" of employees in violation of
the anti-lockout provision of the agreement.
Being unable to persuade the employer to agree to cease
contracting out work or to agree to arbitrate the "grievance," the
union brought this action in the District Court, under § 301 of the
Labor Management Relations Act, 29 U.S.C. § 185, for a decree
compelling the employer to submit the "grievance" to arbitration.
The District Court, holding that the contracting out of work was,
and over a long course of dealings had been, interpreted and
understood by the parties to be "strictly a function of
management," and was therefore specifically excluded from
arbitration by the terms of the contract, denied the relief prayed,
168 F.
Supp. 702, 705. The Court of Appeals affirmed, 269 F.2d 633,
and we granted certiorari. 361 U.S. 912.
Page 363 U. S. 589
The Court now reverses the judgment of the Court of Appeals. It
holds that the arbitrator's source of law is "not confined to the
express provisions of the contract," that arbitration should be
ordered "unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that
covers the asserted dispute," that "[d]oubts [of arbitrability]
should be resolved in favor of coverage," and that when, as here,
"an absolute no-strike clause is included in the agreement, then .
. . everything that management does is subject to [arbitration]." I
understand the Court thus to hold that the arbitrators are not
confined to the express provisions of the contract, that
arbitration is to be ordered unless it may be said with positive
assurance that arbitration of a particular dispute is excluded by
the contract, that doubts of arbitrability are to be resolved in
favor of arbitration, and that when, as here, the contract contains
a no-strike clause, everything that management does is subject to
arbitration.
This is an entirely new and strange doctrine to me. I suggest,
with deference, that it departs from both the contract of the
parties and the controlling decisions of this Court. I find nothing
in the contract that purports to confer upon arbitrators any such
general breadth of private judicial power. The Court cites no
legislative or judicial authority that creates for or gives to
arbitrators such broad general powers. And I respectfully submit
that today's decision cannot be squared with the statement of
Judge, later Mr. Justice, Cardozo in
Marchant that
"No one is under a duty to resort to these conventional
tribunals, however helpful their processes,
except to the
extent that he has signified his willingness. Our own favor or
disfavor of the cause of arbitration is not to count as a factor in
the appraisal of the thought of others."
(emphasis added), 252 N.Y. at 299, 169 N.E. at 391; nor with his
statement
Page 363 U. S. 590
in that case that "[t]he question is one of intention, to be
ascertained by the same tests that are applied to contracts
generally,"
id.; nor with this Court's statement in
Moorman
"that the intention of the parties to submit their contractual
disputes to final determination outside the courts
should be
made manifest by plain language"
(emphasis added), 338 U.S. at
338 U. S. 462;
nor with this Court's statement in
Hensey that "to make
such [an arbitrator's] certificate conclusive
requires plain
language in the contract. It is not to be implied." (Emphasis
added.) 205 U.S. at
205 U. S. 309.
"A party is never required to submit to arbitration any question
which he has not agreed so to submit,
and contracts providing
for arbitration will be carefully construed in order not to force a
party to submit to arbitration a question which he did not intend
to be submitted."
(Emphasis added.)
Fernandez & Hnos. v. Rickert Rice
Mills, supra, 119 F.2d at 815.
With respect, I submit that there is nothing in the contract
here to indicate that the employer "signified [its] willingness"
(
Marchant, supra, at 299) to submit to arbitrators whether
it must cease contracting out work. Certainly no such intention is
"made manifest by plain language" (
Moorman, supra, at
338 U. S.
462), as the law "requires," because such consent "is
not to be implied."
Hensey, supra, at
205 U. S. 309. To
the contrary, the parties by their conduct over many years
interpreted the contracting out of major repair work to be
"strictly a function of management," and if, as the concurring
opinion suggests, the words of the contract can "be understood only
by reference to the background which gave rise to their inclusion,"
then the interpretation given by the parties over 19 years to the
phrase "matters which are strictly a function of management" should
logically have some significance here. By their contract, the
parties agreed that "matters
Page 363 U. S. 591
which are strictly a function of management shall not be subject
to arbitration." The union, over the course of many years,
repeatedly tried to induce the employer to agree to a covenant
prohibiting the contracting out of work, but was never successful.
The union again made such an effort in negotiating the very
contract involved here, and, failing of success, signed the
contract, knowing, of course, that it did not contain any such
covenant, but that, to the contrary, it contained, just as had the
former contracts, a covenant that "matters which are strictly a
function of management shall not be subject to arbitration." Does
not this show that, instead of signifying a willingness to submit
to arbitration the matter of whether the employer might continue to
contract out work, the parties fairly agreed to exclude at least
that matter from arbitration? Surely it cannot be said that the
parties agreed to such a submission by any "plain language."
Moorman, supra, at
338 U. S. 462,
and
Hensey, supra, at
205 U. S. 309.
Does not then the Court's opinion compel the employer "to submit to
arbitration [a] question which [it] has not agreed so to submit"?
Fernandez & Hnos., supra, 119 F.2d at 815.
Surely the question whether a particular subject or class of
subjects is or is not made arbitrable by a contract is a judicial
question, and if, as the concurring opinion suggests, "the court
may conclude that [the contract] commits to arbitration any
[subject or class of subjects]," it may likewise conclude that the
contract does not commit such subject or class of subjects to
arbitration, and, "[w]ith that finding, the court will have
exhausted its function" no more nor less by denying arbitration
than by ordering it. Here, the District Court found, and the Court
of Appeals approved its finding, that, by the terms of the
contract, as interpreted by the parties over 19 years, the
contracting out of work was "strictly a function
Page 363 U. S. 592
of management," and "not subject to arbitration." That finding,
I think, should be accepted here. Acceptance of it requires
affirmance of the judgment.
I agree with the Court that courts have no proper concern with
the "merits" of claims which by contract the parties have agreed to
submit to the exclusive jurisdiction of arbitrators. But the
question is one of jurisdiction. Neither may entrench upon the
jurisdiction of the other. The test is: did the parties in their
contract "manifest by plain language" (
Moorman, supra, at
338 U. S. 462)
their willingness to submit the issue in controversy to
arbitrators? If they did, then the arbitrators have exclusive
jurisdiction of it, and the courts, absent fraud or the like must
respect that exclusive jurisdiction and cannot interfere. But if
they did not, then the courts must exercise their jurisdiction,
when properly invoked, to protect the citizen against the attempted
use by arbitrators of pretended powers actually never conferred.
That question always is, and from its very nature must be, a
judicial one. Such was the question presented to the District Court
and the Court of Appeals here. They found the jurisdictional facts,
properly applied the settled law to those facts, and correctly
decided the case. I would therefore affirm the judgment.
[
Footnote 2/1]
"Arbitrators are judges chosen by the parties to decide the
matters submitted to them."
Burchell v.
Marsh, 17 How. 344,
58 U. S.
349.
[
Footnote 2/2]
"The agreement under which [the arbitrators] were selected
was at once the source and limit of their authority, and
the award, to be binding, must, in substance and form, conform to
the submission."
(Emphasis added.)
Continental Ins. Co. v. Garrett, 125
F. 589, 590 -- Opinion by Judge, later Mr. Justice, Lurton.
[
Footnote 2/3]
"It is true that
the intention of parties to submit their
contractual disputes to final determination outside the courts
should be made manifest by plain language."
(Emphasis added.)
United States Moorman, 338 U.
S. 457,
338 U. S.
462.
[
Footnote 2/4]
"To make such [an arbitrator's] certificate conclusive
requires plain language in the contract. It is not to be
implied." (Emphasis added.)
Mercantile Trust Co. v.
Hensey, 205 U. S. 298,
205 U. S. 309.
[
Footnote 2/5]
"A party is never required to submit to arbitration any question
which he has not agreed so to submit, and contracts providing for
arbitration
will be carefully construed in order not to force a
party to submit to arbitration a question which he did not intend
to be submitted."
( Emphasis added.)
Fernandez & Hnos. v. Rickert Rice
Mills, 119 F.2d 809, 815.
[
Footnote 2/6]
In this leading case, Judge, later Mr. Justice, Cardozo
said:
"The question is one of intention, to be ascertained by the same
tests that are applied to contracts generally. . . . No one is
under a duty to resort to these conventional tribunals, however
helpful their processes,
except to the extent that he has
signified his willingness. Our own favor or disfavor of the
cause of arbitration is not to count as a factor in the appraisal
of the thought of others."
(Emphasis added.)
Marchant v. Mead-Morrison Mfg. Co.,
252 N.Y. 284, 299, 169 N.E. 386, 391.
[
Footnote 2/7]
In this case, the Court, after quoting Judge Cardozo's language
in
Marchant, supra, saying that "the question is one of
intention," said:
"Sound policy demands that the terms of an arbitration agreement
must not be strained to discover power to pass upon matters in
dispute, but the terms must be clear and unmistakable to oust the
jurisdiction of the court, for trial by jury cannot be taken away
in any case merely by implication."
(Emphasis added.)
Continental Milling & Feed Co. v.
Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450.
[
Footnote 2/8]
"But, under any circumstances, before the decision of an
arbitrator can be held final and conclusive, it must appear, as was
said in
Chandley Bros. v. Cambridge Springs, 200 Pa. 230,
49 Atl. 772,
that power to pass upon the subject matter is
clearly given to him."
"
The terms of the agreement are not to be strained to
discover it. They must be clear and unmistakable to oust the
jurisdiction of the courts; for trial by jury cannot by taken away
by implication, merely, in any case."
(Emphasis added.)
Jacob v. Weisser, 207 Pa. 484, 489,
56 A. 1065, 1067.