John Wiley & Sons, Inc. v. Livingston

PETITIONER:John Wiley & Sons, Inc.
RESPONDENT:Livingston
LOCATION:Taylor Street Pharmacy

DOCKET NO.: 91
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 376 US 543 (1964)
ARGUED: Jan 09, 1964 / Jan 13, 1964
DECIDED: Mar 30, 1964

Facts of the case

Question

  • Oral Argument – January 09, 1964
  • Audio Transcription for Oral Argument – January 09, 1964 in John Wiley & Sons, Inc. v. Livingston

    Audio Transcription for Oral Argument – January 13, 1964 in John Wiley & Sons, Inc. v. Livingston

    Earl Warren:

    — Incorporated, Petitioner, versus David Livingston.

    Mr. Harris, you may proceed with your argument.

    Thomas E. Harris:

    May it please the Court.

    I am appearing as counsel for the amicus, the AFL-CIO by courtesy of counsel for the respondent here.

    I wish to address myself principally to the question whether Wiley is bound by the agreement to arbitrate under the collective bargaining agreement entered into between the union and Interscience.

    Now, viewing this question simply as one of private contract law, Section 90 of the New York Stock Corporation Law with control and Wiley quite clearly, under that state statute, would be bound by the collective bargaining agreement, at least up until the point that it expire.

    However, we agree with counsel for petitioner and with the court below that this is not a matter of state law, but of federal labor relations policy which is controlled by federal doctrine derived from the Labor Management Relations Act and decisions of the Board, and other sources.

    While the state law might be taken over as a part of federal law, if it were given any effect, it would be by that sort of adoption rather than simply by its own standing.

    In general, we think that the relations between an employer, a union, and the employees are not controlled either by state law nor yet by a private contract or agency law, but rather by the Labor Management Relations Act and the principles derived therefrom.

    For this reason, a collective bargaining contract is quite different from an ordinary contract.

    The union selected by a majority of the employees and an appropriate bargaining unit is by federal statute the exclusive bargaining representative of all of the employees.

    It can bind dissenting employees, employees not yet fired and the employee here must deal with it whether the employer wishes to or not.

    If the employer in the union reached agreement, they must embody that agreement in a written contract.

    This contract in turn is binding on all employees including dissenters and people hired thereafter.

    The opportunity of the employees to dispense for the one union as their collective bargaining representative and to supplant it with another is quite limited by a federal law.

    The contract itself is not a simple private contract but a code for the industrial community.

    As this Court said in Warrior & Gulf Navigation, it is an effort to erect a system of industrial self government.

    Now, the National Labor Relations Act likewise regulates and in some detail, the rights of parties to collective bargaining agreements to terminate or modify them.

    That regulation will be found in part in Section 8 (d).

    Finally, the National Labor Relations Board doctrine likewise controls whether an employer must continue to deal with the union as the exclusive bargaining representative notwithstanding changes and the methods of an employer doing business as when the business is sold or when the method of operation has otherwise changed.

    Now, the petitioner suggests that this body of Board doctrine as to when an employer or in what circumstances an employer must or need not continue to bargain with the union as exclusive bargaining representative, should also control whether an outstanding and unexpired collective bargaining agreement continues in effect.

    We agree with the counsel for the petitioner that in general, this body of doctrine should control for this purpose.

    Now, what is this body of doctrine?

    In general it is that if the operation of the enterprise is so drastically changed that the old industrial community is dissolved.

    The old bargaining unit then becomes inappropriate.

    The employer has no further obligation to bargain with the union as exclusive bargaining representative in that unit.

    Now, this — this salute —

    Byron R. White:

    So, do you — do you suggest that that event or that set of fact never came about at any point in this case?

    Thomas E. Harris:

    No, Your Honor and I will come to that.

    We think it is quite clear that it did not come about for several months whether it ever came about, we don’t know, but I will come to that in more detail.

    Thomas E. Harris:

    Now, the petitioner quotes and for the decision of the Board in Cruse Motors which summarizes the Board doctrine as to the obligation of the employer to continue the deal.

    A mere change — and this is a quotation from the Board.

    “A mere change in ownership of the employment enterprise is not so unusual a circumstance as to affect the certification.

    Where the enterprise remains essentially the same, the obligation to bargain of a prior employer devolves upon his successor and title.”

    The form that the change of ownership takes is immaterial.

    That is whether it’s a sale of assets, a merger, or consolidation, or a stock purchase.

    It’s the continued existence or lack of it of the industrial community that is decisive.

    Indeed, transfer of ownership is by itself irrelevant for this purpose.

    An employer may, without any change in ownership, so hold to his operations that a bargaining unit that was formally appropriate is dissolved or submerged in a larger unit or that a new unit is created.

    If that happens, he is no longer obligated to bargain with the union certified for the whole unit.

    Of course the collective bargaining agreement may inhibit the employer in making changes that will destroy the collective bargaining unit but if it does not, this problem can’t arise even without any sort of change of ownership.

    Now, if by reason of the changes and operation, the old industrial community disappears and a new appropriate bargaining unit comes into existence in which the union represents only a minority and that is what the petitioner says happens here.

    Then we would agree that it’s probably an unfair labor practice even for the employer to continue to bargain with the union as exclusive bargaining representative for all of the employees.

    (Inaudible)

    Thomas E. Harris:

    I say that — that the employer here contends, the petitioner, and this is what they contended from even before the merger took place.

    That where one — where the method of operation is so changed that the industrial community is dissolved, and the old group of employees is merged into a different and larger group of employees so that the union now represents only a minority and what is now the appropriate bargaining unit.

    They say that the employer is under no obligation to continue to bargain with the union as the representative of the unit.

    And indeed we agree with that, we think that given that set of facts.

    Indeed, it is probably an unfair labor practice for the employer too.

    This Court has held for example that it is an unfair labor practice for an employer to make a contract with a minority union as the exclusive bargaining representative for all of the employees.

    That was the holding a couple of years ago in International Ladies Garment Workers, the —

    (Inaudible)

    Thomas E. Harris:

    Our answer to that in this case is that that is not this case.

    The record here quite clearly shows that the Wiley employees, the Interscience employees, continued to work at the old Interscience Plant for some months after the merger.

    The record is silent as to when they were finally, physically moved to the Wiley plant.

    I believe counsel for the petitioner stated that it was early in January of 1962.

    But the record is quite clear that no such change took place immediately upon the legal merger which was October 2nd, 1961.

    That for some months thereafter, the old Interscience employees continued to work for Wiley at the old Interscience plant just as before presumably under new management.

    Presumably there was a change in the top personnel other than Mr. Lieb who survived, as we say the industrial community, did for some months.

    Now, as to what happened around the end of the year, at that point, the employees were moved physically to the old Wiley plant.

    Tom C. Clark:

    (Inaudible)

    Thomas E. Harris:

    The intention — at the time of the merger, the position of the petitioner was that the contract would automatically expire at that point.

    The contention of the union was that it did not expire.

    The very point which is here at issue before the Court was debated between the parties through the summer of 1961 preceding the merger and they reached no agreement upon it.

    William J. Brennan, Jr.:

    As I understand Mr. Lieb to say that the program by which the change over from the old Interscience to the Wiley building and the — and the intermeshing of — both the workforces and everything else had been planned to the union knowledge as a process which would take several months and that I think he told us and in fact that from about October 2 to about January 1956 or something like that.

    Now, would that have any significance on — on your position?

    Thomas E. Harris:

    It would not —

    William J. Brennan, Jr.:

    (Voice Overlap)

    Thomas E. Harris:

    It would not have any significance on our position that the old unit survived and that the union retained its status as exclusive bargaining representative and that the contract continued in full force in effect unless and until that physical shift took place.

    The fact that the employer announced that it was going to take place sometime could not, in our view, affect the status of the union as bargaining —

    William J. Brennan, Jr.:

    Suppose the —

    Thomas E. Harris:

    — representative or the continued validity of the contract.

    William J. Brennan, Jr.:

    Well, suppose the employer had announced before October 2, a shift would take place over the period from October 2 to January 2, and it did in fact take place between October 2 and January 2.

    Does that make any difference in your position?

    Thomas E. Harris:

    It would make some difference because I think that — I think that the arbitrator could well find that the employer’s responsibilities under the contract differed after the physical merger of the two work staff.

    William J. Brennan, Jr.:

    Did you say that — (Voice Overlap)

    Thomas E. Harris:

    Now, let me say first that even after the physical — even after the Interscience (Inaudible) employees were transferred physically to Wiley that we do not know that the old Interscience union disappeared at that point.

    These employees were a unit of clerical and shipping employees.

    Now, if for example they were shifted to Wiley and that Wiley they continued to handle the shipping function which they had handled theretofore and remained a desperate and unidentifiable group of employees, quite conceivably the bargaining unit could have survived even when — after they moved their place of work a few blocks.

    But the record is silent on what happened to these employees at that point.

    If on the other hand they were scattered out, interspersed inextricably among the Wiley employees, then presumably the bargaining unit disappeared.

    But the record doesn’t answer that.

    All it shows is that it survived for some months.

    What happened after that, we don’t know.

    William J. Brennan, Jr.:

    On the premise that they were dispersed in the Wiley organization when according to a plan announced to the union on — that would be made effective on October 2 and the union was told about it before October 2, and in fact was completed by January 2 according to plan on all those premises.

    What is your position as to arbitration?

    You said that arbitrator might find something.

    Thomas E. Harris:

    Yes.

    William J. Brennan, Jr.:

    Is it — is it the very issue here whether there’s any obligation to arbitrate at all?

    Thomas E. Harris:

    Yes.

    Thomas E. Harris:

    Now, I think that that question whether there is any obligation to arbitrate at all, is answered very simply by the fact that the unit and the contract did survive for some period after October 2nd.

    William J. Brennan, Jr.:

    Even though, it survived only according to this plan of (Voice Overlap) —

    Thomas E. Harris:

    Even though it planned — it survived pending in plan —

    William J. Brennan, Jr.:

    So why do you say that?

    Why do you say that?

    I don’t follow that.

    Thomas E. Harris:

    Because under the doctrine argued urged both by petitioner and us, as long as the old industrial community survives as an identifiable community and it’s not submerged in a new one, the union retains its bargaining status and retains its — and that we — we think that the contract should continue on effect.

    William J. Brennan, Jr.:

    But — well —

    Thomas E. Harris:

    Now —

    William J. Brennan, Jr.:

    I don’t follow the —

    Thomas E. Harris:

    — now, the petitioner’s —

    William J. Brennan, Jr.:

    You — you didn’t — you didn’t try to force arbitration until after January 2 as I understand it, and you brought this action in January 23 and by that time, on a hypothesis I’ve given you, the bargain unit had disappeared.

    Now, why — what — what about the — I don’t quite understand why it is that merely because it took — as I would suppose in any — any basis of common sense it might have to take, a little while to complete the intermeshing of the two organizations.

    By the time you got around the seeking arbitration, the old unit was gone on my hypothesis.

    Thomas E. Harris:

    Well, if the old unit survived and the contract survived for some period of time after October 2, then the union is entitled to arbitrate as to what its rights under that contract or what the rights of the employees under that contract are.

    That would be true even if the arbitration had not been brought and then after the contract run out which was indeed the situation in American manufacturer.

    Byron R. White:

    Then it was true here.

    By the time you asked — have you asked arbitration before the contract expired but after on Mr. Justice Brennan’s —

    Thomas E. Harris:

    But the union —

    Byron R. White:

    — hypothesis there was a dissolution of the bargaining agreement.

    Thomas E. Harris:

    The union never did ask arbitration.

    What happened was that there were long negotiations between the union and the company.

    The union, Interscience, and Wiley in the course of which Interscience and Wiley flatly took the position that the contract would automatically terminate on October 2 when the legal merger went into effect.

    The Company did agree to pay certain benefits to the employees under the contract but it took the position that it was doing this voluntarily, that the contract was automatically out of existence.

    Finally, when these negotiations were at an end and the Company adhered to its position that it would not recognize the contract for any period after October 2 or recognize the union —

    William J. Brennan, Jr.:

    Well your (Voice Overlap)

    Thomas E. Harris:

    — then the union brought suit.

    William J. Brennan, Jr.:

    As I understand it, Mr. Harris, your whole case depends upon this set of facts as establishing the continued existence of the industrial community, does it?

    After the effective official —

    Thomas E. Harris:

    No, I don’t think it does Your Honor.

    Thomas E. Harris:

    And let me go on now and tell you what I think would be the difference after the — assuming that the Interscience industrial community was at some point submerged.

    Let me tell you what effect I think the contract might have been.

    And you will see that my answer to your question is that it does not depend on that but that the employer’s liability under the contract would be broader for the period that the old industrial community survived.

    Now, these questions which I will come to now, I think are questions for the arbitrator, not questions for the Court.

    But I will indicate what I think the arbitrator might decide by way of indicating what difference I think the submergence of the community would make.

    Arthur J. Goldberg:

    (Inaudible) responsibility of the Court to decide.

    Thomas E. Harris:

    I think that the only responsibility of the Court is to decide whether Wiley was bound for any period by the agreement to arbitrate.

    I think that is a question for the Court.

    Now, assuming —

    William J. Brennan, Jr.:

    (Inaudible) which is to say then, he — you say Wiley had that obligation and the courts so hold.

    As I understand it, by reason of the events after October 2 and before January 2 on my hypothesis, you say it doesn’t actually so in taking that hypothesis.

    You say that Wiley is bound by reason of the events between October 2 and January 2, don’t you?

    Thomas E. Harris:

    I do.

    I say that by reason of that, I say if the contract continued in full effect until the industrial community was submerged assuming that it eventually was which the record is silent on.

    But I would say that the contract has some effect even after the — even assuming the disappearance of the indust — the old Interscience industrial community.

    William J. Brennan, Jr.:

    What effect does that (Inaudible)?

    Thomas E. Harris:

    That — that is what I want to come to now, and it will be in terms, I think, of what the arbitrator might decide.

    I —

    William J. Brennan, Jr.:

    That doesn’t help me Mr. Harris, frankly.

    I thought (Voice Overlap) —

    Thomas E. Harris:

    Well — well, I think it — I think it —

    William J. Brennan, Jr.:

    What do we have to decide?

    Thomas E. Harris:

    Well, I think — I think it’s an easy case for you.

    I think that all that you have to dec —

    William J. Brennan, Jr.:

    Well, you may but I don’t find it.

    Thomas E. Harris:

    I think all that you have to decide is that Wiley is bound by the agreement to arbitrate that that could be decided simply on the fact that the old industrial community continued in existence for sometime after October 2.

    William J. Brennan, Jr.:

    Well, that — that’s — (Voice Overlap) —

    Thomas E. Harris:

    I — I don’t think the Court —

    William J. Brennan, Jr.:

    — having my difficulty.

    Thomas E. Harris:

    I don’t think the Court need decide what the rights under the contracts are or which provisions of it continued in effect, under which circumstances.

    Byron R. White:

    Well, that is precisely the arbitration clause continued into effect —

    Thomas E. Harris:

    For some period after October 2.

    Byron R. White:

    Well, it has been decided, it lasted up until the time you asked that you requested arbitration?

    Thomas E. Harris:

    No, because Your Honor — because even if the contract had expired, you can ask arbitration under an expired contract.

    If the substantive rights you —

    Byron R. White:

    arose under the —

    Thomas E. Harris:

    — seek to vindicate arose under the contract.

    Byron R. White:

    Exactly.

    Exactly, but that is a — that is a very bootstrap argument, I mean, (Voice Overlap) —

    Thomas E. Harris:

    Well — well, let’s look at what the — let’s look at what the arbitrator might decide.

    Assuming that at some point, the old industrial community and the old collective bargaining unit disappeared.

    First, I think the arbitrator and I am talking only about the latter part of the period and upon petitioner’s assumption that the old Interscience employees were submerged in the body of Wiley employees.

    Now, up until that happened, I think the arbitrator can enforce the full contract.But after it happened, I think there are some parts of the contract that he could enforce and some that he couldn’t.

    For example, the exclusive bargaining clause could not be applicable assuming a new unit at Wiley where this union is not the exclusive bargaining representative.

    The recognition clause of the contract, Article 1, Section 1, couldn’t be enforced.

    I think the same thing is true as to the union shop provisions.

    The old contract could be expired only to the old Interscience employees obviously, not to new hires.

    However, even assuming the submergence of the old community, what reason is there why the contract should not be applied to the old Interscience employees as respects such matters as severance pay and accrued vacation pay.

    Now, the petitioner actually did pay the severance employee pay provided by the old contract to 11 employees who quit when they were moved over to Wiley.

    Petitioner has searched in its brief that if they accrued vacation pay through the end of the contract.

    Though the record is silent on that, the payments to the welfare and pension plan under the old contract or in exactly the same status, these are accrued financial rights.

    Why should not those rights be enforced under the contract?

    Whatever happened to the old industrial community?

    Now, when you come to seniority rights, the question for the arbitrator would be, whether the contract conferred rights surviving the expiration of the contract.

    In Zdanok v. Glidden, the Second Circuit held for example that that particular contract did contain seniority rights, rights as to rehire and recall which survived the expiration of the contract and the shutting down of the plant and its movable to a new location some hundreds of miles away.

    If the arbitrator found that the contract was intended to confer seniority rights which survived its expiration, the further question would be, “How are these rights to be applied in the chain circumstances?”

    That is how can — assuming that there are seniority rights under the expired contract, how can this be given to the old Interscience employees in the new work — framework at Wiley.

    Now, the petitioner argues that once the operation is so changed that the bargaining unit disappears which it asserts happened in early January of 1962 and that they had in mind all the time.

    They assert that once that happens, the employer is no longer bound to deal with the union.

    Indeed, that it can no longer properly deal with it as a matter of federal labor relations policy.

    Thomas E. Harris:

    However, there is no federal labor relations policy against the enforcement of contracts of a minority union, assuming that it’s a valid contract, when there is no majority union in the plant.

    In Retail Clerks International Union v. Lion Dry Goods, 369 U.S. 17, this Court held that a contract entered into by a union which had lost its majority during the strike, this was a contract dealing with the settlement of the strike providing for reinstatement of the strikers covering certain other points.

    This Court held that that contract was enforceable by the union under Section 301 even though a union had admittedly lost its majority in the plant.

    Indeed, as long as there is no exclusive bargaining representative in the plant, and no exclusive bargaining contract covering the plant, there is no federal policy against individual employment contracts.

    An individual worker can enter into an employment contract with the employer and that contract will be enforced so long as there is no collective bargaining representative and no contract which undertakes to supersede that individual contract.

    If the contract is in — is for the purpose of forwarding collective bargaining or if the employer refuses to bargain because of the individual contracts, then the contracts should be void under this Court’s decision in J.I. case.

    But there is no federal policy in general against either individual contracts or minority union contracts.

    Now, if another union were certified as the exclusive bargaining representative at Wiley, then perhaps this union could no longer enforce the contract.

    Perhaps the new union would become the agent even to enforce rights which survived under the old contract.

    And of course, the new union could enter into a new contract which might change the rights under the old contract with the exception of such individual rights as it indivisibly vested.But that is not the situation.

    There is no new union here.

    There is no new contract.

    And simply as the holder of the contract, though not perhaps as the exclusive bargaining representative, the union surely still has status to enforce whatever rights survived under the old contract.

    We believe that — that the federal policy should favor enforcement of the collective bargaining agreement and protection of rights accruing under it notwithstanding such matters as changes of ownership as indeed the Court of Appeals felt.

    The Labor Management Relations Act is concerned with promoting industrial piece not with such technicalities as whether a plant is required by stock purchase, merger, asset purge — merger.

    Here, actually these technicalities support the union’s position and it could prevail under the New York law if that were applicable.

    But we think that that is not the main point.

    The National Labor Relations policy favors the enforcement of collective bargaining agreements as a means of promoting industrial harmony.

    It so states in numerous pace — places.

    It provides a special forum, the federal courts under 3012 enforcement.

    And as I said, there is no federal policy against enforcement even after a union loses its majority status.

    Finally, the denial of enforcement, would this involve — manifest injustice?

    These employees would be denied their bargain for quid pro quo and they would be denied whatever they gave up to get the collective bargaining agreement when it was negotiated.

    Finally, let me state again that while I have discussed these questions as to what an arbitrator might hold the liabilities to be under the contract.

    One, before the physical consolidation to even assuming a physical consolidation, that I don’t think that any of these questions are for the Court.

    I think that all that is for it now is the question whether Wiley was bound for some period of time to arbitrate on the old agreement.

    And we submit that it clearly was.

    Now, what I have said — again, I would like to repeat that under the Labor Board doctrine which is applicable here, it wouldn’t matter really whether any merger of companies or any change of ownership at all had taken place.

    As I have said, it is quite possible for a single employer with no change of operation to so change his method of operation as to destroy the bargaining unit and as to undercut the statutory duty to bargain with a union for that unit.

    Even there, we would take the position as we do here that the employer continues bound under the old contract.

    Thomas E. Harris:

    And that the union has standing to enforce it, unless and until there is some new union that negotiates a new contract that supersedes it.

    Thank you.

    Earl Warren:

    (Inaudible)

    Charles H. Lieb:

    Mr. Chief Justice, and if the Court please.

    It seems to me that Mr. Harris in his argument, he mentioned essential point here.

    He suggests that even though the union lost its representative rights at the time when the Interscience employees were merged into a much larger Wiley group that nevertheless those employees might continue to have individual contract rights.

    They may, but that is not the question here.

    The question here is not what rights due the employees coming over from the Interscience and being put into the Wiley establishment.

    The question is not here as to what rights if any of those employees may have.

    The question here is whether the union which formally represented those employees and upon the collective — in a collective bargaining group and which now no longer represents them may arbitrate, not may sue for them.

    It’s conceivable that these employees having rights hypothetically had given powers of attorney to — to the union to sue in behalf of John Jones and John Smith to vindicate personal rights.

    It’s conceivable that such a lawsuit might have been commenced not by the union in a representative capacity but by the union as an attorney for a particular individual.

    This proceeding, however, is an application to compel Wiley to arbitrate with the union under a contract which is no longer effective in which became ineffective when the Interscience Industrial Community was dissolved and terminated.

    At that time, whatever I say, I say again.

    At that time whatever the individual rights may have been, certainly the arbitral right disappeared because this was a —

    William J. Brennan, Jr.:

    What — what date?

    Charles H. Lieb:

    We say that the right to arbitrate disappeared on October 2nd.

    Potter Stewart:

    Why?

    Charles H. Lieb:

    Because pursuant to a plan announced to the union in advance of the merger actually put into operation on the date of the merger and actually completed pursuant to plan within two months plus following the merger, the Interscience industrial community was physically broken up.

    It was moved per plant, block, stock and barrel over into a much larger plant.

    The Interscience employees were relieved from the work that they formally were doing.

    There was no longer Interscience work to be done.

    They were put on Wiley jobs.

    They were no longer represented for collective bargaining purposes by this union because this union represented a group of 40 clericals working in an Interscience establishment and not 40 out of 400 employees doing similar work in the similar unit working in the Wiley establishment.

    In other words, we say that — that as of the date when the — when the dissolution of the Interscience enterprise was commenced, the Interscience collective bargaining contract was no longer appropriate.

    William J. Brennan, Jr.:

    (Inaudible) would commence according to a plan.

    Charles H. Lieb:

    Yes.

    William J. Brennan, Jr.:

    It has been announced before —

    Charles H. Lieb:

    Yes.

    William J. Brennan, Jr.:

    — October 2 that it was for that fact that we’re in trouble with.

    Charles H. Lieb:

    Well, we have another — we’ve been — we’ve been misquoted by the union on amicus.

    We never took the position at the time of the merger that the merger as such terminated the contract or prevented the obligation that Interscience had from flowing over to Wiley.

    We took the position before the merger and at the time of the merger that the contract would no longer be effective because the work force of Interscience was being integrated into the Wiley work force.

    Now, I should say that we never had the opportunity to present proof on this.

    This record is — is — in thin state over this because the union moved for summary judgment.

    We stated the ultimate type that the Interscience enterprise had been integrated into the Wiley enterprise.

    The union didn’t think that it was relevant or important.

    We suggested that if the union was to proceed in Court under Section 301 at the time I thought it was proceeding under Section 4 of the Arbitration Act that we should be given as a defendant in a plenary action, pretrial, advantages of development of proof.

    William J. Brennan, Jr.:

    What they’re now asking, reinstatement (Inaudible)

    Charles H. Lieb:

    Yes.

    William J. Brennan, Jr.:

    And this on the ground, as I now understand you, I’ve had so much difficulty with Mr. Harris.

    Don’t make it difficult with you too.

    As I understand it, what your — your position is that Wiley — no obligation of Wiley to go to arbitration (Inaudible) that on October 2, the bargaining unit was dead finished and therefore there was no basis upon which any obligation should be imposed on Wiley under federal law.

    Charles H. Lieb:

    That is our position —

    William J. Brennan, Jr.:

    Alright.

    Charles H. Lieb:

    — sir, yes.

    And the facts to support that, we think are adequately stated in the record.

    If you take the — the fact that phy — the physical consolidation according to the Union’s own position took place in January and if you look at the record to see the announced plan of Wiley on and before October 2.

    Byron R. White:

    Well, Mr. Lieb, do you — do you feel that it’s absolutely essential for you to establish that Wiley never became bound that all who knew the contract?

    As I understand the union’s position as it once — once or the amicus once Wiley becomes bound to the contract for any period of time.

    Then it’s only a matter of interpretation of the contract as to whether it was intended in any part to survive expiration whether by virtue with its own terms or by the dissolution of a — of a bargaining unit.

    And it’s only a question for the arbitrator to say, if these parties intend, for example, the obligations, or vacation pay, or seniority, or pension rights to survive the expiration of the contract.

    That is what I gather, they are the same.

    It’s only a matter of the meaning of the agreements.

    Certainly, the parties could aid — just expressly say that regardless of the termination of the contract, certain obligations are going to continue, but infinitive in perpetuity.

    They could say that.

    The union claims that that’s what the contract means.

    And that — that the arbitrator is the one who should interpret it.

    And once Wiley gets on the line, it can’t get off.

    Charles H. Lieb:

    We think it’s essential to establish that — that the Court must decide whether or not Wiley is responsible to arbitrate.

    Byron R. White:

    Well, yes, but what if it — what if the Court decided that as a matter of the law, the merger does not automatically terminate an agreement.

    And that the — and that the acquiring company is bound by the contract if there is no dissolution of the — of the — the industrial community on the date of merger.

    Now, what if the — assuming the Court decided that?

    Charles H. Lieb:

    We would think that under that rule, Your Honor, Wiley would be relieved from arbitrating with the union.

    Because we take the position that the — what — we — if given the opportunity to —

    Byron R. White:

    The day after a merger, if the Court decided that the merger did not automatically terminate, the day after merger, Wiley would be bound to — under the contract.

    Charles H. Lieb:

    Well, the fact — the fact is there’s no — that’s not in the record.

    Byron R. White:

    (Voice Overlap) — well, is that right — I mean, that — I’m — I’m close, I’m consummating that the Court did decide that.

    Charles H. Lieb:

    This?

    Yes, yes.

    Byron R. White:

    Assume that it did decide that.

    Charles H. Lieb:

    But we would show that on the day of the merger, Interscience employees were brought over the Wiley.

    If given the opportunity to present fact here, we would show that on the very date of the merger —

    Byron R. White:

    Alright, I — I grant you that you might have quite facts with these two, but let’s just assume for the moment, just assume for the moment —

    Charles H. Lieb:

    Yes.

    Byron R. White:

    — that no — that — that the industrial community did not dissolve on that day.

    That as a matter of fact it didn’t.

    That it was two months before you moved any employee.

    You left them right in that plant.

    Now, just assume that for the moment, then Wiley does become bound or let’s assume the Court decides that it did — if we made that Wiley became bound on the contract.

    Now, is there — is there any other way out for you then?

    Charles H. Lieb:

    Oh yes.

    Byron R. White:

    Out of the cons —

    Charles H. Lieb:

    Oh yes.

    We — we make —

    Byron R. White:

    What — what are — what is (Voice Overlap) —

    Charles H. Lieb:

    Well, we presented a number of other defendants.

    Byron R. White:

    What is one of them?

    Charles H. Lieb:

    Well, in the first place, we say that — that the union lost its right to arbitration and abandoned the arbitration.

    They elected not to arbitrate.

    Charles H. Lieb:

    They’ve elected to bargain with us.

    It talked with us for four months when we said that —

    Byron R. White:

    — the procedural arbitrability —

    Charles H. Lieb:

    So called —

    Byron R. White:

    He refused a procedural arbitrability.

    Charles H. Lieb:

    So called.

    We —

    Byron R. White:

    And what’s another way out?

    Charles H. Lieb:

    We have — we have two others.

    Another defense that we have is that the claims, as of them is by themselves, are not arbitrable.

    That they’re not arbitrable because this —

    Byron R. White:

    Within the provisions of the arbitration clause.

    Charles H. Lieb:

    Not — not within the scope of the contract at all.

    Byron R. White:

    Yes.

    Charles H. Lieb:

    And the third reason why we say that — that we have a full and complete defense is that we say that in any event, the union has lost its right to arbitrate for this people.

    Byron R. White:

    But you wouldn’t include in your — in your other ways out the fact that once Wiley became bound, it cease to be bound because the contract expired or because the bargaining unit, it was dissolved in a later date.

    Charles H. Lieb:

    I — I would sir, except that I put that under my nonarbitrable point because it seems to me, if only for the reason that the contract says that the company shall make contributions to the union welfare plan for two years ending January 31, that any claim that the union makes that the company, whether Interscience or Wiley, should make contributions for succeeding years, obviously is not within the scope of the contract.

    We think that a point is reached notwithstanding the — the — your decisions in the Steel Workers cases.

    We think a point is reached where as Professor Cox had occasioned to say, you can have a frivolous assertion.

    Our claim was distinguished from a fri –frivolous claim.

    And we haven’t had the time to — to argue or discuss these questions, and the fact that I haven’t argued them, doesn’t mean that I don’t feel very strongly about that.

    We — we think that — I see my light is over.

    My — my light is off.

    Hugo L. Black:

    (Inaudible)

    Charles H. Lieb:

    Yes sir.

    Hugo L. Black:

    If the merger agreement or the creature’s agreement or whatever you call it, in the record?

    Charles H. Lieb:

    It is in the record but not printed but I should like to hand it up if I may.

    It — it’s Exhibit 2 (a).

    Hugo L. Black:

    What did it provide if anything about the assumption of the existing contracts?

    Charles H. Lieb:

    It provided nothing.

    Charles H. Lieb:

    I drew the agreements.

    Hugo L. Black:

    There was nothing.

    Charles H. Lieb:

    It provided nothing about assumption of existing contracts.

    It said nothing.

    We relied to protect the — the creditors of Interscience.

    We relied on the Section 90 of the New York Stock Corporation law.

    I’d like to say Mr. Justice Black that the assumption has been made, I think too glibly, that Section 90, if it were held to apply, would apply to this.

    Section 90 as I read it, refers to rights of creditors.

    That’s the way the section is titled.

    I don’t consider that the right of a collective bargaining representative to demand arbitration is a creditor’s right which even if Section 90 did apply would carry over under that section.

    Hugo L. Black:

    Let me ask you one other question.

    Is there anything in the National Labor that’s expressly — which refers at all, what happened to the company owning a factory, or a person owning a factory to have the collective bargaining agreement with the unions to sell that factory to another company or another person?

    Charles H. Lieb:

    There’s nothing in the Act, sir —

    Hugo L. Black:

    Do you think its expressed or referred to?

    Charles H. Lieb:

    No, sir.

    As — as we said on Thursday, the lower courts and the Board have held on contract board questions that the successor is never been there, unless he’s an (Inaudible) under the old contract.

    Thank you very much.