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 aboveentitled 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
[1032]
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
[1033]
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, AFLCIO-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.

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 5day period. The employer therefore refused to submit the grievance to
arbitration.

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).

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).

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.