Petroleum Workers v. American Oil Co.

PETITIONER: Petroleum Workers
RESPONDENT: American Oil Co.
LOCATION: Ollie's Barbeque

DOCKET NO.: 55
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 379 US 130 (1964)
ARGUED: Nov 09, 1964
DECIDED: Nov 23, 1964

Facts of the case

Question

Media for Petroleum Workers v. American Oil Co.

Audio Transcription for Oral Argument - November 09, 1964 in Petroleum Workers v. American Oil Co.

Earl Warren:

55, Independent Petroleum Workers of America Incorporated versus American Oil Company.

Mr. Feller.

David E. Feller:

May it please the Court.

This case arises out of a suit by a union to compel arbitration of grievance which the union filed complaining that the employer violated the agreement and has passed practice by contracting out certain work.

Now the case is, in many respects, a replay of this Court's decision in the Warrior & Gulf and American Manufacturing cases, I think in the brief time I have -- I can best describe the case in terms of its factual background going way back before the filing of this grievance.

This -- I'm sorry, until 1952, this union which represents the employees at a refinery in Whiting, Indiana, had a collective bargaining agreement with the employer, which provided in very broad terms that any questions at all arising during the term of the agreement and specifically questions pertaining to rates of pay, wages, hours of employment, or other conditions of the employment not covered by the contract could be processed, those questions could be processed during the term of the agreement through the grievance procedure and be taken to arbitration.

Here, they used to arbitrate what the wager rates used to be.

In 1952, and this is all reflected in the affidavits filed in the court below in this case, the agreement of the parties was changed to provide insofar as relevant here that arbitration would be limited to questions involving -- directly involving alleged violations of the agreement and also questions alleging a violation of past practice, custom, or usage relative to working conditions.

This cause remained in the agreement, virtually unchanged in successive agreements from 1952 on.

It also provided that with respect to matters not covered by the agreement in the area of wages, hours, and working conditions, the grievance procedure could be used.

Indeed, the grievance procedure was open to any question at all.

But that rather than arbitrate, if the company refused to arbitrate, the union could strike.

This was the form of the grievance procedure language in the agreement of March 1957, which was the first agreement with which we're concerned here.

During that time -- term of that agreement, there arose a grievance filed by certain Cement Finishers, now called the Cement Finishers' grievance, who claimed that the company by contracting out certain cement finishing work had violated the terms of the agreement and specifically the recognition clause and had violated past practice which was that this kind of work should always be done by employees in the bargaining union.

The case was carried through the grievance procedure.

The company refused to arbitrate and the union brought suit.

In the Cement Finishers' case, the union suit asked only that the claim that this action of the company violated past practice be arbitrated.

The District Court and then the Court of Appeals held that this grievance was not arbitrable under the then state of law.

The Court of Appeals relied particularly upon the then Fifth Circuit decision in the Warrior & Gulf case as well as in the First Circuit's decision of the Local 201 case, which said that no grievance was arbitrable unless the Court could find a governing provision in the contract which would guide the arbitrator to dispose of the grievance.

That decision came down in March 1960, whereas this Court on June 20th, 1960 reversed the Warrior & Gulf decision of the Fifth Circuit and impliedly, though not specifically, reversed the rule announced by Judge Magruder in the First Circuit which have been relied upon by the Court of Appeals and set down the rule which has been followed in the federal courts ever since.

Subsequent to the Court's decision, this Court's decision in March of 1960, two things happened.

First, the parties then extended their agreement -- excuse me, a new agreement without changing the language.

That occurred in August 1960 and in October 1960, what I will call the Crane Operators' grievance arose.

The company contracted out certain crane operation work.

The union filed a grievance and sought to have it arbitrated and the company refused.

In this case, the suit was in two parts and that is the present case.

The first claim was that the company was obligated to arbitrate the union's claim that it had violated the agreement and specifically the recognition clause by giving the work, the crane work, to an outside contractor.

The second paragraph of the complaint was broken into two paragraphs.

Claim that the company had violated past practice, that the past practice was to have this work done by the crane operators employed by the company and the union asked that that claim be arbitrated.

After an answer was filed, a motion for summary judgment was filed by the union on paragraph 1, the complaint asking arbitration of the claim of violation of the agreement.