Appeal by Local 144 from a judgment of the Southern District of New York, Lloyd F. MacMahon, Judge, denying its motion to compel four nursing homes to arbitrate certain disputes. Cross-appeal by the nursing homes from the denial of their motion to impose sanctions on the union (Local 144) pursuant to Fed. R. Civ. P. 11.
Before: MANSFIELD, TIMBERS and MESKILL, Circuit Judges.
Local 144 of the Hospital, Nursing Home and Allied Services Union, AFL-CIO ("the Union") appeals the decision of the Southern District of New York, Lloyd F. MacMahon, Judge, denying the Union's motions to compel the Woodcrest, Pelham Parkway, New Vanderbilt and Long Island Nursing Homes ("the Nursing Homes") to arbitrate disputes involving specified employees and to dismiss the Nursing Homes' petitions to stay the same arbitrations. The Nursing Homes cross-appeal the district court's denial of their motion for the imposition of sanctions against the Union pursuant to Fed. R. Civ. P. 11.*fn1 The district court found that the Union was seeking to compel arbitration of disputes which, under the Union's Collective Bargaining Agreement with the Nursing Homes, were not subject to arbitration, but that the Union's conduct was not so egregious as to warrant Rule 11 sanctions. We affirm.
The Union represents the Nursing Homes' non-supervisory employees. On April 1, 1981 the Union entered into a Collective Bargaining Agreement with the Nursing Homes, Par. 8.A. of which provided for arbitration as follows:
"All complaints, disputes, controversies or grievances arising between the parties hereto involving questions of interpretation or application of any clause of this agreement, or any acts, conduct or relations between any of the parties hereto and/or between the Union and any Employer, directly or indirectly, which shall not have been adjusted by and between those involved shall be submitted to the Impartial Chairman hereinafter mentioned for arbitration and his decision shall be final and binding upon the parties hereto."
The Agreement ran through March, 1984. In June 1984, the parties entered in to a second Collective Bargaining Agreement which "extended and renewed [the 1981 Collective Bargaining Agreement] for a two (2) year period commencing April 1, 1984 and continuing up to and including March 31, 1986, with all of the terms and conditions therein contained except as modified [herein]". One of the changes the second Agreement worked in the original contract was to clarify the rights of a class of workers whom the 1981 Agreement had termed "casual" and the second Agreement labelled "non-slotted/replacement" employees. In the words of the second Agreement, "[s]lotted/regular employees are those who fill the employment slots. . . . Non-slotted/replacement employees are those persons who only substitute for slotted/regular employees during their absence on non-working benefit days (leave, holidays, personal days or vacation)."
Par. 2C (8) of the Second Agreement provided:
"Non-slotted/replacement employees shall not be subject to the terms and benefits of this agreement [with three exceptions]."
None of the exceptions concerned arbitration: the first established that the non-slotted employees were subject to the 1981 Agreement's requirement that the Nursing Homes employ "in the bargaining unit only members of the Union in good standing"; the second stated that, in certain circumstances, the Nursing Homes were required to make contributions to the Union Pension Fund on behalf of non-slotted employees' and the third stated that the non-slotted employees were eligible for welfare coverage and that the Nursing Homes should, in certain circumstances, contribute to the "Welfare Fund" on their behalf.
Between September 1984 and May 1985 the Union requested arbitration of (1) Woodcrest's "unjust reduction" in Danny and Tony Castro's work schedule, (2) Long Island's underpayment of Bernadine Karupen, (3) Pelham's underpayment of Heather Mack, (4) Pelham's "unjust reduction" in Norma Castro's wages and benefits, and (5) New Vanderbilt's "unjust discharge" of Dorrand Mitchell. In each case the Nursing Home requested that the arbitration hearing be delayed and then, shortly before the rescheduled hearing date, obtained an ex parte order form the New York State Supreme Court staying the arbitration. In each case, the Nursing Homes submitted affidavits from their Administrators stating that the employees were "non-slotted" and requested stays on the grounds that Par. C (8) of the second Collective Bargaining Agreement precluded arbitration of disputes involving non-slotted" employees.
The Union removed the cases to the Southern District of New York and filed a motion (1) to dismiss the Nursing Homes' petitions to stay the arbitration, (2) to compel arbitration, and (3) to enjoin the Nursing Homes from ever again litigating the issue of arbitrability of the grievances of non-slotted employees. The Union also requested that Rule 11 sanctions be imposed against the Nursing Homes for initiating "frivolous litigation." The Nursing Homes replied by moving for a permanent stay of arbitration and requesting that Rule 11 sanctions be imposed against the Union.
The district court denied the Union's motion and granted the Nursing Homes' request for an order permanently staying the arbitrations. However, it denied the Nursing Homes' request that the Union be sanctioned under Rule 11. The Union and the Nursing Homes appeal from the denial of their respective motions.
The principles governing whether a dispute must be arbitrated are well settled. A party is not required to submit a dispute to arbitration unless it has contracted to do so. AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 106 S. Ct. 1415, 89 L. Ed. 2d 648, 54 U.S.L.W. 4339, 4341 (1986); Nolde Bros., Inc. v. Bakery Workers, 430 U.S. 243, 250-51, 51 L. Ed. 2d 300, 97 S. Ct. 1067 (1977); Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 374, 38 L. Ed. 2d 583, 94 S. Ct. 629 (1974); Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960). Since interpretation of the terms of a contract normally raises a question of law, Heyman v. Commerce and Industry Insurance Co., 524 F.2d 1317, 1320 (2d Cir. 1975); Painton & Co. v. Bourns, Inc., 442 F.2d 216, 233 (2d Cir. 1971), the issue of whether the agreement could be construed as providing for arbitration of a dispute must in the first instance be decided by ...