OpenJurist

485 US 1031 Modjeski Masters v.

485 U.S. 1031

108 S.Ct. 1590

99 L.Ed.2d 905

MODJESKI & MASTERS, applicant,
v.

Jan R. CARTER, et al. A-763. Supreme Court of the United States May 2, 1988 The application for stay filed with Justice WHITE and referred by him to the Court, is hereby granted, and the temporary stay entered by Justice WHITE on April 15, 1988, is vacated. The judgments of the Louisiana Court of Appeal for the Fourth Circuit and the Louisiana Civil District Court for the Parish of Orleans are stayed pending the timely docketing of an appeal by appellants in the above-entitled case. Should such an appeal be so timely docketed, this order is to continue pending this Court's action on the jurisdictional statement or further disposition of such appeal. This order is conditioned upon the timely posting with the Louisiana Civil District Court for the Parish of Orleans of a good and sufficient bond in the amount of $700,000 plus interest from April 15, 1988, by appellant Modjeski & Masters, covering any potential obligations under the judgment of the Louisiana Civil District Court for the Parish of Orleans. Unless and until Modjeski & Masters posts said bond, the stay is expressly conditioned on appellant's taking no action to reduce its current net worth and, in particular, not: (A) distributing any earnings of the firm to its partners who continue to work for the firm, except as they have been

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receiving heretofore in salary and benefits or as provided in (B) and (D) below, or (B) distributing any earnings of the firm to its partners for so long as the net worth of the firm is below $700,000, or (C) Transferring or encumbering any existing assets, funds, or existing contracts of the partnership to or on behalf of any other parties, beyond security interests or liens already in existence, except as is necessary in the ordinary course of its business, for the defense or settlement or both of the pending actions against it, or for payment to associates and employees in accordance with existing employment contracts; And further provided that (D) Profits accumulated after the payment of salaries and other expenses shall be distributed as follows: (1) if the net worth of the firm is between $700,000 and $1.1 million, then up to 50% of accumulated profits may be distributed to the partners; the remainder will be accumulated in the partnership, (2) if the net worth of the firm is above $1.1 million, then all profits above that amount may be distributed to the partners; and (E) Appellant shall furnish to appellees within 30 days of the end of each quarter: (1) a statement from the managing partner of Modjeski & Masters and from its certified public accountants that all provisions of this order have been complied with, and (2) balance sheet and income statements for each such quarter; and (F) Within 120 days of the end of the calendar year, petitioner shall provide annual balance and income statements to appellees; and (G) Appellees shall keep confidential all financial data provided under this order; and (H) If the net worth of Modjeski & Masters falls below $700,00, appellees may apply to the Court for further relief; and (I) Appellees shall have the right to select an independent auditor to inspect any and all records of the appellant to

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ascertain whether appellant is complying with the provisions of this stay. (J) Should appellee find it necessary to seek additional relief to enforce the terms of this order, it shall apply to the Louisiana Civil District Court for the Parish of Orleans. United Steelworkers of America v. Cherokee Elec. Co-op [108SCt1601,485US1038,99LEd2d915] 108 S.Ct. 1601 485 U.S. 1038 99 L.Ed.2d 915 UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC, et al. v. CHEROKEE ELECTRIC COOPERATIVE.

No. 87-1274

Supreme Court of the United States

May 2, 1988

On petition for writ of certiorari to the United States Court of Appeals for the Eleventh Circuit.

The petition for a writ of certiorari is denied.

Justice WHITE, dissenting.

1

This case presents the question whether labor and management may be compelled to arbitrate a grievance that indisputably was filed outside the time limits provided by their collective-bargaining agreement.

2

The parties to this action entered into a collective-bargaining agreement that provided that "[a]ny grievance not reported within five (5) working days of first knowledge of the occurrence causing the grievance shall be deemed wiaved [sic ] and non-existent." The grievance at issue here was not reported within the 5-day period. The employer therefore refused to submit the grievance to arbitration.

3

The union brought an action to compel arbitration in the District Court for the Northern District of Alabama. The court dismissed the action on summary judgment on the ground that the employer "did not agree to submit to arbitration grievances which on their face are untimely and to which the timeliness issue is not disputed." The court rejected the union's contention that the timeliness issue ought to have been submitted to the arbitrator. "To permit an arbitrator to arbitrate the issue of timeliness where there is no dispute over the facts bearing on the timeliness issue would be to waste the time of the arbitrator and of the parties," reasoned the court, "and if an arbitrator should erroneously find that this particular grievance was timely filed, the finding would be so manifestly arbitrary and capricious as to require a reviewing court to set it aside." The Court of Appeals for the Eleventh Circuit affirmed summarily. 829 F.2d 1131 (1987).

4

The decision in this case conflicts with decisions of several other Federal Courts of Appeals. Those courts have construed our decision in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964), as requiring that the arbitrator resolve all procedural objections to arbitration so long as the subject matter of the grievance is covered by an arbitration agreement. See, e.g., Niro v. Fearn Int'l, Inc., 827 F.2d 173, 175-176 (CA7 1987); Washington Hospital Center v. Service Employees Int'l Union, Local 722, 241 U.S.App.D.C. 186, 189-191, 746 F.2d 1503, 1506-1508 (1984); Automotive, Petroleum & Allied Industries Employees Union, Local 618 v. Town & Country Ford, Inc., 709 F.2d 509, 511-514 (CA8 1983).

5

In Washington Hospital Center, for example, the union failed to give notice that a grievance had been referred to arbitration within the time specified by the collective-bargaining agreement. It was nonetheless held that the arbitrability of the grievance had to be decided by the arbitrator rather than the courts. The District of Columbia Circuit reasoned that a dispute over " 'the significance of a default in literal compliance with a contractual procedural requirement,' " like a dispute over a substantive contractual provision, requires " 'a determination of the intention of the parties to the contract' " that must be made by the arbitrator. 241 U.S.App.D.C., at 191, 746 F.2d, at 1508 (quoting Chauffeurs, Teamsters & Helpers, Local 765 v. Stroehmann Bros. Co., 625 F.2d 1092, 1093 (CA3 1980)).

6

I would grant certiorari to resolve the conflict among the Courts of Appeals on this question of federal labor law.