Atlantic Steel Co. v. Kitchens

• Decision Date: 02 February 1972
• Docket Number: No. 26657,26657
• Citation: 228 Ga. 708,187 S.E.2d 824
• Parties: , 79 L.R.R.M. (BNA) 2620, 67 Lab.Cas. P 12,369 ATLANTIC STEEL COMPANY v. Tommie L. KITCHENS.
• Court: Georgia Supreme Court

Page 824

187 S.E.2d 824

228 Ga. 708, 79 L.R.R.M. (BNA) 2620,

67 Lab.Cas. P 12,369

ATLANTIC STEEL COMPANY v. Tommie L. KITCHENS.

No. 26657.

Supreme Court of Georgia.

Feb. 2, 1972.

Rehearing Denied March 9, 1972.

Syllabus by the Court

1. The issue in this case as to the right of a discharged employee to retirement benefits under a collectively bargained pension contract, in which contract no procedure was provided for arbitration, is within the jurisdiction of the courts of this State.

2. The Court of Appeals correctly held that the discharged employee had a vested right in the early retirement pension provided in the pension contract, if he had reached the required age of 60 at the time his employment was terminated.

Jones, Bird & Howell, C. Dale Harman, Jr., Earle B. May, Jr., Atlanta, for appellant.

William L. Horton, Atlanta, for appellee.

MOBLEY, Presiding Justice.

In Kitchens v. Atlantic Steel Company, 123 Ga.App. 812, 182 S.E.2d 530, the Court of Appeals found that Kitchens was entitled to a pension under a collective bargaining contract between Atlantic Steel Company and the United Steel Workers of America. This court granted certiorari to review the decision.

Kitchens was discharged from his employment by Atlantic Steel for insubordination, and the cause for his dismissal was upheld by union-management arbitration. Subsequently he applied for an 'Early Retirement' pension, contending that at the time of his dismissal he was 60 years of age and had worked for the company for 22 years, and that his pension right had vested under the contract.

The Court of Appeals held that Kitchens could not be deprived of his pension rights by being discharged before applying for the pension benefits. The factual question of Kitchens' age at the time of his discharge was not decided in the trial court, and that question was left for determination in the trial court.

1. No question appears to have been made by the parties, or decided by the court, in either the trial court or Court of Appeals, as to the jurisdiction of the State courts in this matter involving a collective bargaining contract made pursuant to the National Labor Relations Act. We consider it necessary to first determine this question, since State courts should not take jurisdiction of the action if jurisdiction is exclusively within the National Labor Relations Board.

We confess difficulty in determining those cases in which jurisdiction is preempted by the National Labor Relations Board. However, the Supreme Court of the United States has indicated that there is an area in which State courts have a right to enforce collective bargaining contracts. See Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483; Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593; Humphrey v. Moore, 375 U.S. 335, 344, 84 S.Ct. 363, 11 L.Ed.2d 370.

The record in the present case shows two collectively bargained contracts between Atlantic Steel and the Union. The contract dated November 30, 1965, deals with rates of pay, vacations, seniority, suspension and discharge, severance allowance, and other conditions of employment. The contract dated December 31, 1965, is a pension agreement. The pension contract makes reference to the contract for rates of pay, etc., but states that the pension contract is not a part of that contract, and 'shall be treated as a separate agreement by and between and binding upon the parties hereto as hereinabove and in such Pension Plan stated and provided.'

The contract dealing with rates of pay, etc., made 'in accordance with and subject to the limitations and provisions of the National Labor Relations Act, a heretofore amended,' recognizes the Union as the sole and exclusive agent and representative of the employees 'for the purposes of collective bargaining with respect to rates of pay, wages, hours of work and other conditions of employment.' An Article on Grievances is included in the contract which provides for Grievance Committees and a procedure for handling and adjusting grievances. If no mutually satisfactory disposition of a grievance can be reached by Atlantic Steel and the Union, a procedure is provided for final and binding arbitration of the grievance. A grievance is defined as 'any dispute or disagreement which may arise with respect to the application or performance of this contract or any part hereof,' and it is stated that other disputes shall not be submitted to arbitration or handled as a grievance.

The pension contract has no provision for arbitration of disputes arising under it. As to disagreements it states: 'Each application for a pension shall be made in writing and shall include such information as the company shall reasonably require. Representatives designated by the company and the union shall, through the proper processes of collective bargaining, endeavor in mutual good faith to resolve any disagreement as to the rights of any applicant for a pension hereunder.' No method of resolving disagreements is provided if this endeavor fails.

This is not a case, therefore, which would be controlled by Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580, in which it was held that contract grievance procedures must be exhausted before direct legal redress is sought.

In the recent decision of the United States Supreme Court in Allied Chemical & Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass, 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341, decided December 8, 1971, it was held that retirees' benefits are not a mandatory subject of collective bargaining under the National Labor Relations Act (29 U.S.C.A. § 151 et seq.), since the statute establishes the obligation of the employer to bargain collectively only 'with respect to wages, hours, and other terms and conditions of employment,' with 'the representatives of his employees,' and retirement benefits of persons already retired do not come within this obligation.

In the present case the contract dispute arises under a contract which does not provide any method of arbitration. No management-union decision was invoked on the question, and the denial of the pension by Atlantic Steel was under its interpretation of the pension contract. Since the dispute is in an area of labor relations which is not a mandatory subject of collective bargaining, we conclude that the State courts have jurisdiction to decide the dispute.

2. There is no disagreement between the parties as to the fact that Kitchens was discharged for cause, and that the decision of the arbitrator denying the grievance complaint filed by the Union on behalf of Kitchens was final and binding on all the parties. This decision by the arbitrator dealt with a matter covered under the contract of November 30, 1965, dealing with rates of pay and other conditions of employment.

The subsequent application of Kitchens to Atlantic Steel for an early retirement pension presented a new question, whether under the terms of the pension contract of December 31, 1965, he was entitled to a pension even though he had been discharged.

The Court of Appeals held that the pension contract had no express provision whereby an employee forfeited his pension rights because of being discharged; that forfeitures are not favored by law; and that the pension right had vested in Kitchens at the time he was discharged.

The pension contract provides in Section 4: 'Any employee who shall have had at least fifteen but less than thirty years continuous employment and who shall have attained the age of sixty shall be eligible to retire at his sole option, and shall be entitled to receive a special retirement payment as provided in Section 7 . . .' Kitchens claims to be eligible for pension under this section.

Atlantic Steel contends that because Kitchens was not 'an active, full-time employee of the company,' as the term 'employee's is defined in the pension contract, at the time he applied for a pension, he would not be eligible for retirement benefits.

It is plain that the definition given of 'employee' cannot apply in each instance where the word is used in the contract. For instance, Section 3, providing for disability retirements, refers to 'any employee who while this Pension Plan is in effect, shall become totally and permanently disabled for six consecutive calendar months, . . .' An employee disabled for six months could not be 'an active, full-time' employee. Section 5, providing for deferred vested pensions, refers to any 'employee' whose employment shall be terminated because of a reduction of working forces, etc., who has been in continuous employment of the company for at least 15 years, and has attained the age of 40 years at that time, and states that the 'employee' shall make application for a pension not sooner than 90 days prior to his 65th birthday. Such an 'employee' would not be an active, full-time employee at the time of his application for pension.

Atlantic Steel points out that the pension contract in Section 12 states: 'This Pension Plan is applicable only to employees who shall retire or, as hereinabove provided, shall be deemed to have retired on or after December 31, 1965 and while this Pension Plan is in effect.' This paragraph must be construed with the heading of the section, which is, 'Effective Date and Termination,' and the paragraph preceding the quoted paragraph, which states the effective date of the pension plan. The quoted paragraph deals only with the effective dates of the pension contract, and does not purport to deal with the eligibility of individuals for benefits under the contract.

Atlantic Steel relies on Section 11 of the Pension Contract, which provides: 'The company will pay the pensions provided for herein, or cause the same to be paid, without contribution from the employees or the union, and the company therefore has and shall have the sole...