International Union of Operating Engineers, Local 150, AFL-CIO v. Flair Builders, Inc.

PETITIONER:International Union of Operating Engineers, Local 150, AFL-CIO
RESPONDENT:Flair Builders, Inc.
LOCATION:Former Moose Lodge No. 107

DOCKET NO.: 71-41
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 406 US 487 (1972)
ARGUED: Apr 10, 1972
DECIDED: May 30, 1972

Bernard M. Baum – for petitioner
J. Robert Murphy

Facts of the case


Audio Transcription for Oral Argument – April 10, 1972 in International Union of Operating Engineers, Local 150, AFL-CIO v. Flair Builders, Inc.

Warren E. Burger:

This morning in number 71-41, International Union of Operating Engineers against Flair Builders.

Mr. Baum you may proceed.

Bernard M. Baum:

Mr. Chief Justice and may it please the Court.

This case involves an action brought under Section 301, the Labor Management Relations Act requesting the enforcement of the demand for arbitration.

The complaint as amended was dismissed by the District Court, which found that although the company in this case was bound to the collective bargaining agreement to arbitrate labor disputes within the scope of that agreement that it was unenforceable, since the Union was guilty of laches.

On appeal, the decision of the District Court was affirmed, Judge Stevens dissenting.

Thereafter, the Fourth Circuit rendered a decision in which it held that laches should be a question for the arbitrator and not for the Court and specifically disagree with the case at bar.

Accordingly, an issue which we have presented to this Court is whether once a Court has determined that a labor dispute is arbitrable under the terms of a contract should the issue of laches or the question of delay, be determined by the arbitrator or the Court.

In this regard, what occurred in this case before the District Court is most pertinent to a determination of this issue.

On May 22, 1964 the Union and the employer entered into a memorandum of agreement which bound the company and the Union to a master agreement which had been negotiated between the Union and employer association.

The memorandum of agreement provided that the company would be bound to the initial master agreement and also subsequent master agreements, unless they terminated at the time that the first agreement was expiring or any subsequent agreement.

Now, the initial agreement, the memorandum as I said was signed in May 22, 1964.

The initial master agreement expired in May 31, 1966 and thereafter, on June 1 a new agreement came into effect which it was to expire on May 31 of 1970.

Now, in this regard again, I should note to the Court that there is no issue in this case.

That the District Court found that there was binding agreement between the parties.

And there was no issue on appeal regarding the binding nature of the agreement.

The issue came as the decision of the question of laches.

Now, during the course of the second agreement or approximately of November 7, 1968, we filed a complaint on the District Court requesting pursuant to Section 301 stating that the employer had disregarded the agreement that refuse to pay the wages and conditions under the agreement and further had refuse to comply with the hiring arrangements which are under the contract.

We ask in that case for specific performance of the agreement.

This involved one employee, isn’t it?

Bernard M. Baum:

Well, at that point there had only been one employee.

One position?

Bernard M. Baum:

At that point, involved an operating engineer.

One position.

Bernard M. Baum:


Of course our contention Your Honor is that there were several other employees that would have been in the bargaining agreement during the course of this agreement had the employer complied.

And I think that’s one of the very fundamental issues in the arbitration.

Now, what happened here was that the District Court said, I think that the threshold issue should be determined by the arbitrator under the terms of this contract and I shouldn’t decide it.

So, we went ahead, and this was in April of 1968 where the master agreement still had 13 months to run, and pursuant to the Court directive made a demand on the company for arbitration of the contract issue and in addition made a demand for the other issues — the arbitration of the other issues which has been set forth in the complaint.

The Court, the counsel for the company then filed a motion to dismiss, alleging laches is a defense.

Bernard M. Baum:

The District Court then held that laches was an issue for the arbitrator and not for the Court under this Courts decision in Wiley.

Thereafter, the Court ordered a hearing on the merits of the case limited to the issue of whether or not there was contract, the threshold question.

As a matter of fact during the course of the hearing, the District Court again stated its position of the issue of laches was for the arbitrator and not for the Court and further stated that it found that a binding collective bargaining agreement was an existence.

However, at the conclusion of the hearing, the Court rendered a memorandum of opinion.

In which it now found, yes, there was a binding contract but that the Union was guilty of laches in terms of it is bringing the action and accordingly it was unenforceable.

Now at the hearing, we in fact never had a specific hearing on the question of laches because of the Courts position but that was not an issue for it to determine, and in fact when the employer raised the issue at the hearing, the Court attempted to limit our cross examination of the employer in the case who was obviously the company’s chief witness to five minutes because he had already engaged in the long colloquy with counsel for the company.

Pointing out that the only thing he was interested in was determining the binding nature of the contract.

So that I do not feel that other than the question of the contract itself, there were any other significant facts.

There was some evidence that there from the Union’s point of view that there had been contacts.

The employer denied any contacts during the term of the contract and the Court in changing its position from the position which had held during the hearing from the position that it held in its memorandum, not permitting counsels motion to dismiss on the Wiley case that he was crediting the company’s testimony regarding laches even though frankly we have had no hearing on laches.

Now, I think in terms of the argument in this case there are three essential considerations which the Court must make.

Our position is first that the defensive laches clearly falls within the rational of this Court’s decision in Wiley is particularly illustrated by what happened before the District Court.

The District Court initially said the threshold issue of the contract existence was for the arbitrator.

We then follow the Courts admonition and demanded arbitration.

And in fact, as the Court indicates in its subsequent memo on the motion to dismiss.

We pointed out to the Court that this Court had pointed, had stated that the threshold issue was in fact for the Court and not the arbitrator.

And subsequently did determine that threshold issue as a binding contract.

The Court then said laches wasn’t for the Court but for the arbitrator and then change its position.

Now, what happened?

Laches is an equitable defense obviously with common law.

It has two elements.

Normally, it has a question of delay and also a question of prejudice.

There was no testimony taken on the issue of prejudice and there was very little testimony other than the question of delay here.

Now, frankly had the Court said to us, I am going to determine the issue of laches in this case.

What we would have done is to have presented our case on the merits because here we had an employer with a continuing violation of the contract that it disregarded it since the first employee had become a member of the Union.

We had a situation where the employer had refused to pay the wages and working conditions, and it simply ignored the contract.

So obviously we would have had to present our entire case in the merits.

We would have subpoenaed the company’s books and records to determine what employees were involved because obviously this would relate to a defense in this kind of the case.

In other words it would have been — this hearing in fact took less than two hours.

Had we — had the Court said we are going to have a hearing on the issue of laches it would have taken two or three days.

Mr. Baum, as I read your petition, the only question you present is the issue of whether the question of laches is one for the Court, or one for the arbitrator, are you going beyond that?

Bernard M. Baum:

No, sir.

No, Your Honor, I am not going beyond that at all.

I am making the point that what happens in the Wiley decision.

This Court says, except for four reasons why they felt that issues delay should go to the arbitrator and not to the Court.

They said, first of all it’s very difficult to separate an issue of delay from the issue of merits.

I am pointing out that frankly had we had to go into the issue of delay, which here was called laches, it could have been called waiver, you could have called procedural delay.

We would have been required to go into a long and lengthy hearing on the merits, and the Court points out in Wiley where there is an agreement to arbitrate the issues.

The federal courts should not get into this issue, they have enough of the case load as it is.

The parties have agreed to utilize this forum and obviously this should be a decision of the arbitrator because of the inability to separate the issue of laches from the merits of the case, and I think that is the reason I am making the point.

Would you say Mr. Baum that concept of laches might be different in the context of a labor contract in labor dispute than in the law of equity generally?

Bernard M. Baum:

I think that’s true, and I think it would — the law obviously in the question of common law of the law of equity.

The quest — the defense of laches always relates to the facts of the particular case.

Now, in this case not only do you have to worry about the facts of the particular case but you have a bargaining relationship to be concerned with, you have a continuing problem of violation, of a bargaining relationship because as I pointed out to the Court before when a demand for arbitration was made, we still had 13 months to run on the contract.

So that there — that even if there might be some question of delay which might affect the ultimate decision of the arbitrator.

There is certainly could be no question of delay as it related to the final 13 months of the collective bargaining agreement.

Now, I think the second consideration in this case would be the effect on the federal courts if we were to get into a situation where courts are going to start determining questions of delay.

Every time a party to a collective bargaining agreement wanted to disrupt that relationship the simplest thing they could do, would be to start raising these defenses.

Obviously, the purpose of arbitration at least in labor management, I would assume in commercial manners, is that there is a forum which can expedite the hearing and that the parties have this kind of relationship.

It’s a manner which they choose.

And if we get — if we start raising defenses whether it be waiver or estoppel, or we call it procedural delay, or we call it laches, still delay anyway.

We are going to start delaying the process of arbitration.

And any party that wants to delay the process of arbitration can do it simply by raising these types of defenses.

And I think this Court in its decision starting with textile workers going through the Steelworkers trilogy, going through the recent decision in Boys Market and going through all of these cases is the theory that where the parties have agreed and they are going to arbitrate the case, we don’t want that kind of issue on the Federal Court, it should be determined by an arbitrator.

And that is exactly what we are talking about in this particular case.

Now, the third element, I think that the Court must seriously look at is the question of the quid pro quo.

I noted in reading this Court’s decision in the Boys Market case, that one of the points which the Court made why is it the reason that they thought that in injunction should issue and Sinclair should be overruled was the fact that the employer would have to have an effective system of making arbitration work and the damages were not always the answer and that pointed out that with where there is an agreement to arbitrate and then you permit a strike, you are derogating the need for the employer to enter into the agreement which provides for arbitration because you are saying that the arbitration procedure is meaningless.

Now, let’s turn that around and let’s put the foot on the other shoe from the Union’s point of view.

The union basically has the right to strike.

That is its economic weapon that is the weapon that utilizes.

Bernard M. Baum:

Now, when you take that weapon and you say to the union give that weapon up during the term of the contract, we want industrial peace.

But we will substitute for that the process of arbitration.

And then you make that process, one that is ineffective, just in the case of Boys Market on the employer side where you turn it around to the Union side it makes it ineffective.

Obviously, I think the quid pro quo for no strike is arbitration.

It is not litigation in the Federal Court.

Now, in addition, if I might return the Court for a moment to the issues raised the considerations in Wiley.

This Court pointed out in Wiley that in addition to the problem of separating the marriage from the procedural issue.

We had a question of delay.

This case is over three years old.

It is not yet come before the arbitrator.

This Court raise the question in Wiley of the cost as I point out in the brief and I think this case so appropriately supports this Court’s rational in Wiley.

Counsel for the company, advised this Court after he had to grant the certiorari buy the company didn’t have money to prepare a brief in this case.

And we pointed out that could have happened just as well to the Union and the company because here the company says, they don’t have enough money to take this case to the Highest Court.

We do not raise the defensive laches either but the cost factor can work either way.

And as the Court pointed out in Wiley, this is correct.

This is exactly what happened in this case.

Now, in addition the Court in Wiley also talked about the question of duplication of effort, had the District Court followed through with this original decision that laches was for the arbitrator and not for the Court then counsel for the company could have easily raised the issue of delay before the arbitrator, irrespective of what we call it, whether we call it laches, whether we call it estoppel, whether we call it waiver.

Obviously, I think that the –that this particular case falls clearly within the four corners of this Courts decision in Wiley.

Arbitration frankly is a process which if it does not work or does not operate, really serves no purpose, now, getting back for a moment to the question of the no strike provision in this contract.

It is interesting to note that under the terms of this particular contract the Union had a right to strike if the employer did not pay the wages and did not pay fringe benefits.

We could have proceeded under arbitration or we could have struck.

Yet, we chose not to strike the employer in this particular case and we chose to go the root of arbitration and not create any kind of an industrial tie up so that I think the facts of this particular contract.

The facts of these particular case show that not only did we have a broad arbitration clause but as to some of the issues raised in arbitration, we could have used the right to strike, we have an option but rather we chose arbitration because we did not want to in any way affect the relationship.

So that creates even in an additional policy reason why in this particular case, delay is an issue for the arbitrator and not for the Court.

Mr. Baum, I understand that the first breach is alleged to have occurred in 1966 that has granted the Union to wait three years before commencing the arbitration proceedings.

Bernard M. Baum:

I think that the fact — what little facts there are of Mr. Justice Powell on this case, was a fact that we waited until we had concrete situation on which to move of our position is that for the years 1964 through 1966, the work was subcontracted to a subcontractor which obviously would be an issue, in the arbitration.

That in 1967 there was a tremendous turn over with people.

However, in 1968, we found the operator, he joined the union, and I think as the record reflects, we filed an action before the national labor relations board within successfully concluded and as well as the wage and hour against the employer.

And we look for concrete situation, this was a continuing violation and we were waiting until we had a tightly concrete situation.

Now, I might also add this that irrespective of the question of even what happened between 1966 and 68 which frankly I think is a question of fact on the merits.

Bernard M. Baum:

We don’t have all the merits and all the facts before us.

There can be no question that from the time that we file the notice of arbitration that being from 1968 until the conclusion of the contract, there could be no issue with delay.

It might be frankly that an arbitrator might take the position that because we waited for those years, there might not be any remedial thing that he could do in terms of back pay.

But obviously that would have to come out in terms of all the facts in this case.

And we don’t have all the facts in this case before us, and that really creates the problem.

I might ask the Chief Justice if I could reserve five minutes for rebuttal.

Warren E. Burger:

You may Mr. Baum.

Mr. Murphy.

J. Robert Murphy:

Mr. Chief Justice, and may it please to the Court?

I think that as we have suggested in our brief on this appeal, the inclination of the petitioner, the Union has been actually to define the issue of this case in a broader sense than they purport to be defining it.

It is true that we would differ with them substantially on their interpretation of the activities and proceeding in the Court below.

We find no place in the actual proceedings in the trial court where the Union was in any way prejudiced or surprised by what happened.

But in their brief they constantly reiterate that the trial court found that the parties were bound by an agreement to arbitrator.

The trial court never so found an examination of each of one of the orders entered by the trial court, whether on the initial motion to dismiss against the original complaint which by the way was not seeking arbitration and was filed by the Union for in a completely different purpose but on that motion order on that motion to dismiss the amended complaint, and on the final order of the trial court there has not been a finding of fact that could be considered final and binding that the parties were ever bound.

It would be accurate to say that the trial court indicated that there was an agreement signed, yes.

But whether or not it was binding at the time of the action was the threshold question which had to be determined by the trial court and which was determined by the trial court on the facts as it heard it adversely to the Union.

Now, on a narrower approach to this case, we would think that this would be adequate and fully supported by the decisions of this Court in Wiley against Livingston, in the Lincoln Mills case, the Steelworkers trilogy, and the entire series of cases which have set up the distinction between those matters which an arbitrator there will be considered to have jurisdiction to decide and those matters involving the threshold question which the trial court under Section 301 will have the right to decide.

But the Union in this case is not restricting itself to this narrow issue.

It seems to us that they are going further and basically asking, under the case of limiting their argument to the question of who gets to decide whether laches is a defense but they are going further and suggesting that this Court or that this Court should recommend to trial courts and the incidence of nine — of 301 cases that they should have nothing but a cursory inquiry into whether or not there is or is not a binding contract.

Warren E. Burger:

I think it, you agree counsel that it’s the general policy of the courts to encourage arbitration in this area, would you not?

J. Robert Murphy:

I would agree with that Your Honor, yes.

But in so, agreeing I would have to point that in all of the cases from the Lincoln Mills through the Steelworkers and so on, there has never been any question but what the trial court in 301 cases must as a matter of judicial responsibility find that there is a binding agreement before it can order arbitration.

Now, in a footnote to the Steelworkers case Mr. Justice Douglas’ opinions specifically pointed out that if it were alleged that there was a contract which in effect said that the arbitrator should decide his own jurisdiction that he would require that the parties so alleging have the burden of saying that.

So that there is never really been more that what you could call a presumption of arbitrability resulting from the Steelworkers lines of cases and we can accept that presumption.

But in so accepting it, Your Honor, we do not mean to suggest that the Court does not have its own preliminary and primary obligation.

Now, let’s — assuming that the parties were bound by collective bargaining contract and that it did have an arbitration clause in it and that’s the way the case comes to us and it seems to me the arbitration clause here was in all disputes clause, wasn’t it?

J. Robert Murphy:

I would have to admit that that is what it appears to be, Your Honor.

So we’re not dealing with an arbitration clause that limits the arbitrator to the interpretation in the application of the —

J. Robert Murphy:

No, we are not Your Honor.

And what you’re saying is that in this specific case, the parties, the employer didn’t have to arbitrate because of laches.

It wasn’t that assuming there was about collective bargaining contract it wasn’t that something had happened to terminate the contract, or the general application of the arbitration clause?

J. Robert Murphy:

No, Your Honor.

It does not involve the interpretation of the arbitration clause because we are departing for —

Or its on-going binding character.

It’s just in this particular dispute?

J. Robert Murphy:

It’s exactly the ongoing binding character that we have challenged and that in this particular case —

Well, that isn’t an issue in this Court.

Is it whether the contract as a whole and the arbitration clause is finding on the employer?

That’s not the issue here, isn’t it?

J. Robert Murphy:

We see that as the issue Your Honor and we have seen that as the issue from the first time that we file the pleading in this case.

Well, you are perhaps entitled to support the judgment on any ground that’s available to you but that would require some factual determinations here in this Court.

J. Robert Murphy:

Not in this Court, Your Honor, we don’t feel.

It would yes, require factual determinations in the trial court.

But we can see very little difference between this situation and a situation that might be presented if the parties had torn up the contract.

Well, let’s just for the moment, narrow this matter down.

Let’s assume for the moment that there is no dispute, whatsoever, that both parties had signed and we’re bound by the contract.

And that the arbitration clause in the contract was in all disputes clause.

Now, let’s start from that premise for a little while.

J. Robert Murphy:

Yes, Your Honor.

Now, how about laches?

When in a specific case, the claim is that the arbitration clause is inoperative because the Union has been guilty of laches and it’s in all disputes for us.

Now, here is the dispute between the parties as to whether not the arbitration clause covers this dispute.

Now, that’s the narrow issue in the case at least just one of them.

J. Robert Murphy:

If that were the issue of this case, Your Honor?

I would concede that the question of laches in that instance was a matter for the arbitrator and I don’t think that you would find any different indication in the opinions below.

Warren E. Burger:

But what relief?

J. Robert Murphy:

But that is not the situation in this case.

Excuse me, Your Honor.

Warren E. Burger:

What relief did the plaintiff ask for in going into the trial court?

J. Robert Murphy:

When he went into the trial court he was asking for many thousand dollars damage and for a direction, I believe that the employer be required to comply with the contract in which particular manner he did not specify and it was only in the amended complaint when he finally suggested that arbitration was the remedy that he was after.

Warren E. Burger:

Well, taking the amended complaint which is certainly we must take now on, I am sure you [Voice Overlap].

J. Robert Murphy:

Yes, we will Your Honor.

Warren E. Burger:

Wasn’t that a suit in equity for specific performance of an arbitration clause?

J. Robert Murphy:

Yes, it was Your Honor.

Warren E. Burger:

But you suggest that in that specific of that to effort to get specific enforcement the claim of waiver or laches is not part of the total controversies?

J. Robert Murphy:


I suggest that it is a part of the total controversy but it’s the part of the total controversy that must be decided by the Court.

Warren E. Burger:

Then what is the purpose of the arbitration clause and all disputes clause if the Court is to reach in and decide some and leave others to the arbitration?

J. Robert Murphy:

The question of laches in this particular case Your Honor goes to the binding force of the contract, and I cannot concede in any way that there was at the time of this case reach the courts in any way, a binding contract because under the circumstances there was no longer a binding contract.

It is only by misinterpretation of the facts that counsel for the Union can possibly say that there was a binding contract or that the Court below found one.

Mr. Murphy.

J. Robert Murphy:

Yes, Your Honor.

William H. Rehnquist:

On page 149 of the Appendix turned as Judge Decker’s opinion at the top of the page.

He says, accordingly I have determined the defendant was bound by the memorandum agreement to arbitrate labor disputes within the limits of the arbitration clause.

In order to sustain this contention that you’ve just been making, you have to urge the over turning of the District Courts finding on that point, don’t you?

J. Robert Murphy:

I would have to say that that clause in Judge Decker’s opinion was a part, a finding of fact if you will Your Honor, yes.

But it was not his ultimate holding.

He was not seeing that I hold that somebody who has once been bound is no longer bound except that he came to the conclusion that just wasn’t a binding contract anymore.

He may have used the words and he did use the words, that Your Honor has quoted that is correct.

May I, Your Honor just make one additional reflection concerning what we are saying here, and, that is that while it would possibly have been permissible to take the contrary approach in the Trial Court and to say that since there once was a contract that was signed, we are going to leave everything that ever happened after that to the arbitrator.

It seems equally clear to me that in view of the decision of this Court in Boys Markets that that approach is no longer permissible, and I say this for what I feel are important policy reasons.

In the Boys Markets case it was being the relief which was being sought was basically an injunction against to strike.

The impression that this Court gives in the Boys Market opinion is that where an anti-strike injunction is being sought, the function of the trial court under Section 301 is to take an active part in the investigation of this threshold question as to whether there is or is not a binding contract and a binding arbitration plus a part of it, and it would seem to us that if that is the approach to be taken under the Boys Markets decision, it is impossible to rationalize a lighter, a more cursive approach in a case where it is not being as where an injunction is not being sought but where only relief that is being sought is in the type of arbitration that is being sought by the plaintiff’s amended complaint here.

We can see no reason why there should be any distinction in the importance that the trial court is to give to that preliminary investigation of the threshold question.

So, it would be our feeling that as a result of the Boys Markets decision this Court must avoid enunciating a double standard which might possibly work in equity between the parties.

If there is to be one standard when an injunction is sought, and the contrary, and less stringent standard when all that is being sought is arbitration, it seems to us there is no way to put this together and avoid confusion in the trial courts or even to make an equitable arrangement between the parties.

What if both types of relief are being sought in the same proceeding, and after all, in the injunction situation which you are directly confronted with in the Boys Markets case, we are ordered — the trial courts are ordered to direct the employer to arbitrate at the same time.

Now, in those situations, there we can make one standard of inquiry and to whether or not there is a binding contract, and then later in the same case make a different standard of inquiry?

Well is your — is your point, your point must be that the Court of Appeals that the decision on laches was that laches and delay had terminated the entire contract.

It just doesn’t that there had been too much delay in this case to force arbitration?

There was no longer a binding contract of any kind.

J. Robert Murphy:

That would be the effect of the decision of the Court of the Appeals?

Is that your — but is that your position?

J. Robert Murphy:

Yes, Your Honor.

Whereas if, you a while ago conceded that if it were only a question of laches and the applicability of the arbitration clause in this specific instance conceding with the contract in the arbitration clause continue generally?

J. Robert Murphy:


You conceded that then laches would be a question for the arbitrator under and all disputes clause.

J. Robert Murphy:

That is correct, Your Honor.

But where laches, you say, as the Court of Appeals views it went to the validity and the existence of the entire contract.

J. Robert Murphy:

Exactly, Your Honor.

That then laches has to be for the Court.

J. Robert Murphy:

Right, that is our position and by the way that was the position of the Fourth Circuit in its Tobacco Workers case on which petitioner relied.

They made a specific distinction between the type of laches that would go to the matters as they set which are to be decided by the Court, and the type of laches which go to the matters to be decided by the arbitrator.

So if that is the distinction of the Fourth Circuit as we pointed out in our brief.

We think the Fourth Circuit would have decided this particular case exactly the way our Seventh Circuit decided it.

Because there are apparently two different kinds of laches as Your Honor has pointed out, one which goes to the hardest matter.

We think also that going back to the position of the Boys Markets decision, it is necessary to have a uniform standard of inquiry for the Courts to avoid the rather embarrassing and inequitable situation which could arise where there are matters that are obviously somewhat outside the scope of arbitration and to avoid these cases where the arbitrators decision or award might even end up in what the Courts would consider matters of illegality.

Let us supposed that the trial court has order arbitration after a cursory inquiry as to whether or not there is binding arbitration clause and the arbitrator in turn decides that he has no jurisdiction.

Now that might be only a matter of slight import in the ordinary case but if you are in the case where you are also asking for an injunction against the strike, what have you have ended up with is giving the employer and anti-strike injunction and not giving the Union, the arbitration that it wants, which could be a very damaging case for the Union and I would think that the counsel representing that Union would almost be on our side, and this interpretation of the Boys Markets decision.

Well, if he saw the case the way you do, I am sure he would be.

J. Robert Murphy:

[Laughter Attempt] Yes, Your Honor.

I believe that I can sum up my position and I hope that I have made myself clear as to my understanding of the effect of the decisions below by saying that in our view point the decisions below are well within the scope of the prior labor law of this Court has fashioned since the Lincoln Mills decision.

The purpose of the Court in fashioning this labor law has been constantly reiterated by saying that the aim is to promote industrial peace.

They aim yes to promote industrial peace through the use of the arbitration process as a central institution in that promotion of industrial peace but never, never at the expense of saying that the arbitration process is self-operating.

It won’t operate.

An arbitrational word would hardly be valid or worthwhile if it could not be enforced by the Court.

Since the Boys Markets decision it seems to us that unless this Court is to suggest to the trial courts that they should vary the principle according to the remedy that is being sought.

It is necessary to require of the trial courts in any case under Section 301 that the Court take an active position in arriving at the decision as to threshold question.

It must actively investigate whether there is a binding contract.

It must actively investigate whether or not that binding contract is still binding at the time of the incidence in the Court and actively investigate the scope of the arbitration clause.

J. Robert Murphy:

If there is no active investigation, there will be contradictory opinions, there will be confusion in the trial courts.

We will have achieved one thing that the Boys Markets desired of the opinion and the Boys Market seemed to have desired and that was to reinforced the remaining use of state courts in Section 301 cases, and it would be that possible reinforcement from a uniform standard which we are suggesting, that would be our answer to the suggestion that perhaps were giving the Federal Courts too much to do that we’re adding to their workload.

We feel that if a uniform standard is to be promoted by the decision in the case before the bar today that that uniform standard will reinforce the availability of the conventional state court remedies as was said in the Boys Market, peace that should be reinforced so that those state court remedies which the Congress apparently desired to keep available will be available.

Mr. Murphy, you certainly stated correctly that the objective of the arbitration clauses is to promote industrial peace.

That’s the objective though isn’t it and is not the means, the function of an arbitration clause to provide a simple on the speedy solution?

J. Robert Murphy:

Yes, it is aimed at this, Your Honor.

Warren E. Burger:

Now, does the approach taken in this case suggest that any various speedy solution to this controversy?

J. Robert Murphy:

Looking at the facts of this case, Your Honor, the speedy solution of arbitration was available to this union five years before it first suggested that speedy solution.

There was not an on-going employer-union relationship which ought to be the minimum condition for the effective collective bargaining and the arbitration which is the part of it.

This situation was one where there was no relationship between these parties.

And if we consider that as a part of the facts which have obviously was on the proofs of both parties in the trial court, it would be impossible to say that to order arbitration in this matter when they are finally asked for it, would have contributed in anyway to industrial peace.

That is the reason we have suggested in our brief that a part of speedy resolution of dispute should certainly be the availability of the judicial part of the relief.

But it would hardly been up to the employer to go and suggest it when they had no union on the horizon for a period of five years after the memorandum of agreement was signed.

I hope I am not going around the periphery of Your Honors’ question but I am trying to say that well, everyone realizes and hopes that arbitration will continue as an effective part of the collective bargaining process that in some cases and this one is an unusual and we would have to concede in some cases arbitration will not contribute to that in the ordering of arbitration in some cases as was pointed out in Wiley against Livingston would be imposing upon the parties something which they have not agreed to.

Warren E. Burger:

Thank you Mr. Murphy.

Mr. Baum, do you have anything further?

Bernard M. Baum:

Mr. Chief Justice, just a couple of comments that I wish to address to the Court.

I think Mr. Justice Rehnquist was correct, when he noted the decision of the District Court at page 149 of the abstract, holding that there was a contract but that the question was the laches.

I would also suggest to the Court that they examine page 93 of the abstract, where the Court during the hearing, specifically stated that it held that the agreement came into existence and held that there was an agreement.

I would further suggest to the Court that they examine page 156 of the abstract being the Court of Appeals decision in this case in which they say their issue is the question of whether a party to a collective bargaining agreement which contains an arbitration clause may be so dilatory in making the existence of a vaguely delineated disputes known to the other party that the Court is justified in refusing to compel the submission.

The point is, you can’t get to the issue of laches unless you first have a contract because why would you want to reach the issue of laches unless you first have a contract.

If you have no binding contract there is no issue to reach, and I think that the counsel was incorrect.

What would you say if the claim made by an employer and resisting arbitration was that we have orally resented the contract?

There is no contract, no arbitration clause anymore.

Wouldn’t the Court have to determine as a threshold question whether there is a contract and an arbitration clause?

Bernard M. Baum:

The Court has to determine whether there exists an agreement obviously, whether the parties have entered into a written agreement.

Of course, they’d probably get into like in this case.

We have an entire agreement of the party’s clause which says there could no oral agreements or understandings.

So that here, the written agreement is the binding agreement but obviously you have to decide that question but you can’t get to the issue, why get to the issue of the laches if you do not have the contract in the first place?

You say you do not have a contract, there is nothing to arbitrate.

Warren E. Burger:

[Voice Overlap]But wasn’t that the District Judges’ approach here though?

You he said I can go along on this being arbitrable question, if you have got a contract.

But we are talking about a manner which goes to the very present existence of the contract.

So, that was —

Bernard M. Baum:

Well, it says as Justice Rehnquist referred, accordingly, I have determined that the defendant was bound by the memorandum of agreement to arbitrate labor disputes who can limit for the arbitration clause.

And then he says, however I am not going to enforce this provision because I believe that the Union was guilty of laches here.

This becomes a very complicated situation because moreover, this was an industrial case, this is a construction union and what limited facts and the record show this is on construction sites, several sexes are major issue which would have to be determined in this case.

What kind of relationship?

This isn’t where you have a steward everyday in a plant.

This is construction, there is several, counties, there is several sites, business agents are going around, there isn’t this kind of a situation that you have in industrial plant.

Obviously, an arbitrator is going to determine these kinds of questions because that was one of the issues we would have to get into.

If the Court in fact had held the hearing on laches here, we’d have to do it before an arbitrator.

And obviously, it becomes part of the merits.

Moreover, I would point out to the Court one final thing.

The counsel says that the Tobacco Workers case says that there are different kinds of laches.

I would suggest and I think that reading of the Tobacco Workers case directly says, we disagree with the Seventh Circuit.

We think they say the Flair Builders case as far as the Fourth Circuit is concerned is wrong.

They say the issue should have been for the arbitrator and not for the Court, and there is no question.

They don’t delineate as to different kinds of laches, that laches is delay, its waiver, its procedural delay.

I submit that there is no difference, and I submit that if this Court is going to permit these kinds of issues to be decided by the Courts rather than the arbitrators, where you have in all disputes arbitration clause which are going to get into is more litigation and undermine the arbitration process.

Thank you.

Warren E. Burger:

Thank you, Mr. Baum.

Thank you, Mr. Murphy.

The case is submitted.