United Steelworkers of America v. American Manufacturing Co

In United Steelworkers v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343 (1960), an employee left work due to an injury and while off work brought an action for compensation benefits. The case was settled, with the employee's physician expressing the opinion that the employee was 25% "permanently partially disabled." The union later filed a grievance that charged that the employee was entitled to return to his job because of the seniority provision of the collective-bargaining agreement. The company refused to arbitrate and the union sought to compel arbitration. The company argued, inter alia, that this type of dispute was not arbitrable under the collective-bargaining agreement. In stark contrast to the instant case, the collective-bargaining agreement in American Mfg. Co. contained a "standard form" arbitration clause that provided for arbitration of "all disputes between the parties 'as to the meaning, interpretation and application of the provisions of this agreement.' " Id. at 565, 80 S.Ct. at 1345. The agreement also contained a provision that the company would employ and promote employees on the principle of seniority. Id. at 565-66, 80 S.Ct. at 1345-46. The Court reasoned that: The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitration. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Id. at 567-68, 80 S.Ct. at 1346. In considering the arbitrability issue, the Supreme Court observed that the union claimed that the company had violated a specific provision of the contract, whereas the company maintained it had not violated the clause. Id. at 569, 80 S.Ct. at 1347. The Court concluded that there was, therefore, a dispute between the parties as to "the meaning, interpretation and application" of the agreement. Arbitration should have been ordered. When the judiciary undertakes to determine the merits of a grievance under the guise of interpreting the grievance procedure of collective bargaining agreements, it usurps a function which under that regime is entrusted to the arbitration tribunal. Id. In United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960), the Supreme Court ordered arbitration of a clause characterized as "frivolous" and "patently baseless" by the appellate court below. The Court stated unequivocally that even if a claim appears "frivolous" on the merits, a court should require arbitration. 363 U.S. at 568 & n. 6, 80 S.Ct. at 1346 & n. 6.