Paramount Bag Manufacturing Co. v. Rubberized Novelty & Plastic Fabric Workers' Union, Local 98
Paramount Bag Manufacturing Co., Inc. sought to stay arbitration of a labor dispute with Rubberized Novelty and Plastic Fabric Workers’ Union, Local 98, I.L.G.W.U. The dispute arose after Paramount terminated its manufacturing operations but continued dealing in similar products, leading the union to claim violations of collective bargaining agreements regarding work preservation. Paramount argued the court lacked jurisdiction, that the agreement's relevant clause was an illegal 'hot cargo' clause, and that the agreement was procured by fraud. The District Court denied Paramount's motion to remand and for summary judgment, granting the union's motion for summary judgment. The court affirmed federal jurisdiction under Section 301(a) of the Labor Management Relations Act and held that the arbitrability of the dispute, including claims of illegality and fraud, falls within the broad arbitration clauses of the collective bargaining agreements.