In re the Arbitration between Cluett, Peabody & Co. & Amalgamated Clothing Workers of America
Petitioner moves to stay arbitration, contending there is no contractual relationship requiring arbitration of disputes arising from Bud Berman's employment practices. The dispute centers on an agreement clause stating the employer shall not hire contractors to manufacture garments unless its own factories are supplied with work and the contractor is in a contractual relationship with the Union. It is asserted that the company's factories are working part-time while contracting operations are indirectly accomplished, allegedly violating the agreement. The court determined that whether the company purposefully diverted manufacturing and contract operations through its wholly-owned subsidiary, Bud Berman, constitutes an arbitrable issue concerning contractual meanings and breach. Therefore, the motion to stay arbitration is denied.