Norman C. Bernhardt v. Polygraphic Company of America, Inc.

FRANK, Circuit Judge. 1. We think that a stay, pursuant to Section 3 of the Federal Arbitration Act, 9 U.S.C. § 3, is not “substantive” within the meaning of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, and Guaranty Trust Company of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079. We so held, per Judge Learned Hand, in Murray Oil Products Company v. Mitsui & Company, 2 Cir., 146 F.2d 381, 383, where we said: “Ai'bitration is merely a form of trial, to be adopted in the action itself, in place of a trial at common law: it is like a reference to a master, or an ‘advisory trial’ under Federal Rules of Civil Procedure, Rule 39(c), 28 U.S.C.A.” 2. Section 3 applies whether or not the agreement is of a kind covered by Sec. 2, i. e., for purposes of Sec. 3, the agreement need not involve a maritime transaction or interstate or foreign commerce. The power to enact Sec. 3 derives from Article III, Section 2 of the Constitution. See, e. g., Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 2 Cir., 70 F.2d 297, 298, affirmed 293 U.S. 449, 55 S.Ct. 313, 79 L.Ed. 583; Agostini Bros. Bldg. Corp. v. United States, 4 Cir., 142 F.2d 854. 3. Plaintiff argues that Section 3 deals with a suit “brought in any of the courts of the United States” and therefore not with a removed suit. We cannot agree. Murray Oil Products Co. v. Mitsui & Co., supra, was a removed suit; see also Parry v. Bache, 5 Cir., 125 F.2d 493, 495. 4. Section 1 of the Act provides that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 1 We need not in this case decide whether this clause is restricted in its application to those sections of the Act relating to interstate and foreign commerce or whether it applies to all sections, including Section 3. For assuming, arguendo, that the second interpretation is correct, we think the clause irrelevant here. The words “any other class of workers”, read in connection with the immediately preceding words, show an intention to exclude contracts of employment of a “class” of “workers” like “seamen” or “railroad employees.” 2 Plaintiff was not hired as a “worker” but as a plant superintendent, at a salary of $15,000 a year, with *952 managerial duties fundamentally different from those of “workers.” 3 The California arbitration statute excludes from its scope “contracts pertaining to labor.” Code Civ.Proc. § 1280. The California courts have held that this exclusion does not cover a contract with a sales manager, hired at a salary of $100 per week; Kerr v. Nelson, 7 Cal.2d 85, 59 P.2d 821; or one with a motion-picture actor to be paid $1,000 per week; Universal Pictures Corp. v. Superior Court, 9 Cal.App.2d 490, 50 P.2d 500. See also Levy v. Superior Court, 15 Cal.2d 692, 104 P.2d 770, 773, 129 A.L.R. 956. We think these decisions most persuasive. Reversed. Footnotes [1] For a variety of conclusions as to the meaning and application of this clause, see, e.g., Donahue v. Susquehanna Collieries Co., 3 Cir., 138 F.2d 3, 149 A.L.R. 271; Watkins v. Hudson Coal Co., 3 Cir., 151 F.2d 311; Amalgamated Association v. Greyhound Lines, 3 Cir., 192 F.2d 310; Pennsylvania Greyhound Lines v. Amalgamated Association, 3 Cir., 193 F.2d 327; Tenney Engineering Co. v. United Electrical R. & M. Workers, 3 Cir., 207 F.2d 450; Shirley-Herman Co., Inc., v. International Hod-Carriers, 2 Cir., 182 F.2d 806, 809, 17 A.L.R.2d 609; Agostini Bros. Building Corp. v. United States, 4 Cir., 142 F.2d 854; International Union v. Colonial Hardware Flooring Co., 4 Cir., 168 F.2d 33; Gatliff Coal Co. v. Cox, 6 Cir., 142 F.2d 876; Lewittes & Sons v. United Furniture Workers, D.C. S.D.N.Y., 95 F.Supp. 851; Ludlow Mfg. & Sales Co. v. Textile Workers Union, D.C.Del., 108 F.Supp. 45. [2] See discussion of the background of this clause in Tenney Engineering Co. v. United Electrical R. & M. Workers, 3 Cir., 207 F.2d 450, 452-453. [3] Note, inter alia, the provision contemplating that plaintiff might perform services “as a member of the management committee” and might be “elected an officer or director.”