International Union of United Auto., Aerospace and Agr. Implement Workers of America, U.A.W. v. Randall Div. of Textron, Inc.

• Citation: 5 F.3d 224
• Decision Date: 14 September 1993
• Docket Number: P,No. 2052,No. 92-3136,2052,92-3136
• Parties: 144 L.R.R.M. (BNA) 2334, 126 Lab.Cas. P 10,858 INTERNATIONAL UNION OF UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, U.A.W. and United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Local Unionlaintiffs-Appellants, v. RANDALL DIVISION OF TEXTRON, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 224

5 F.3d 224

144 L.R.R.M. (BNA) 2334, 126 Lab.Cas. P 10,858

INTERNATIONAL UNION OF UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, U.A.W. and United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Local Union No. 2052, Plaintiffs-Appellants, v. RANDALL DIVISION OF TEXTRON, INC., Defendant-Appellee.

No. 92-3136.

United States Court of Appeals Seventh Circuit.

Argued April 14, 1993.

Decided Sept. 14, 1993.

Barry A. Macey (argued), Janice Kreuscher, Macey, Macey & Swanson, Indianapolis, IN, for plaintiffs-appellants.

Hudnall A. Pfeiffer (argued), Todd M. Nierman, Baker & Daniels, Indianapolis, IN, for defendant-appellee.

Before COFFEY and RIPPLE, Circuit Judges, and RONEY, Senior Circuit Judge. ^*

COFFEY, Circuit Judge.

The United Automobile, Aerospace and Agricultural Implement Workers of America and Local Union No. 2052 (collectively "the Union") filed a complaint under section 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185 (1988), alleging that Randall Division of Textron, Inc. ("Randall") had breached a July 1987 contract between it and the Union by refusing to arbitrate discharge grievances. The Union sought an order compelling Randall to submit the discharge grievances to final and binding arbitration, an award of costs for maintaining the action, as well as attorneys' fees. In denying the parties' cross motions for summary judgment the district court ruled that the arbitration clause was of indefinite duration and therefore was terminable at will by either party. The parties and the court agreed that, in lieu of trial, the parties would submit the sole remaining issue (whether Randall had effectively repudiated its obligation to arbitrate discharge grievances) to the court for decision on stipulated facts and exhibits. The court entered judgment in favor of Randall, concluding that Randall's withdrawal of recognition from and refusal to bargain with the Union in late March of 1989 constituted an effective repudiation and termination of its contractual obligation to arbitrate grievances. The Union appeals the court's ruling that the arbitration clause was of indefinite duration and therefore was terminable at will. Because we disagree with the district court's finding that the arbitration clause was of indefinite duration, we reverse and remand to the district court for further findings of fact to determine precisely when the parties intended the clause to terminate.

I. BACKGROUND

In early January of 1987 Randall took over operations of a manufacturing facility in Morristown, Indiana and began to produce the same products as the facility's prior owner, Anderson Cargo of Indiana. The Union had continuously represented the production, laboratory, and maintenance workers at the facility since 1978. A three-year collective bargaining agreement between the Union and Anderson Cargo was scheduled to expire in November of 1987. In late January of 1987 the Union asked Randall to recognize it as the exclusive bargaining representative of Randall's employees and to begin collective bargaining negotiations. Randall refused, so the Union filed an unfair labor practice charge with the National Labor Relations Board ("NLRB"). After investigating the charge, the NLRB issued a complaint and filed an action in federal district court seeking injunctive relief under section 10(j) of the National Labor Relations Act, 29 U.S.C. Sec. 160(j) (1988).

In July of 1987 Randall and the Union entered into a "Memorandum of Agreement" ("Agreement") to terminate the charges before the NLRB and the district court. Under the Agreement, the Union agreed to withdraw its unfair labor practice charge pending before the NLRB, the NLRB agreed to dismiss its section 10(j) petition, and Randall agreed to recognize the Union as the exclusive collective bargaining representative for the appropriate labor groups, to enter into grievance procedures with the Union over any terminated, non-probationary employees, and to arbitrate any unresolved termination controversies. Additionally, the Union agreed that there would be a moratorium on Randall's obligation to bargain over wages, hours, and other terms and conditions of employment for a period of eighteen months after Randall received clear title to the manufacturing facility, subject to Randall's agreement to process and arbitrate grievances regarding the termination of non-probationary employees. Randall received clear title in August of 1987.

Randall withdrew recognition of the Union and refused to bargain with it on the ground that it had a good faith doubt as to the Union's majority status in March of 1989, a point in time after the expiration of the eighteen-month moratorium. Thereafter, the Union filed another unfair labor practice charge with the NLRB alleging that Randall's refusal to bargain with it violated its obligations under the Agreement. Following a hearing, an administrative law judge determined that by refusing to bargain with the Union, Randall was in violation of the National Labor Relations Act. The judge found that the Agreement was not a collective bargaining agreement, but rather a settlement agreement under which the Union made a number of concessions in exchange for Randall's promise to bargain at the conclusion of the eighteen-month moratorium. The NLRB unanimously affirmed the judge's decision, stating that the agreement imposed a duty on Randall to bargain with the Union for a reasonable period of time following the eighteen-month moratorium. A panel of this court denied Randall's petition for review of the NLRB's decision and granted the NLRB's petition for enforcement of its order. See Randall Div. of Textron, Inc. v. NLRB, 965 F.2d 141, 143 (7th Cir.1992).

Meanwhile, between June of 1989 and December of 1990, Randall discharged several employees in the labor groups represented by the Union. For each, the Union grieved the discharge and, after Randall refused to follow the procedure for grievances outlined in the Agreement, it requested that Randall arbitrate the grievance. When Randall refused to arbitrate any of the grievances, the Union filed an action under section 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. Sec. 185 (1988), for breach of contract, citing the arbitration clause of the "Memorandum of Agreement" as the portion of the contract breached.

The Union and Randall filed cross-motions for summary judgment. The district court denied both motions on November 14, 1991. It determined that the arbitration clause in the Agreement was of indefinite duration and therefore was terminable at the will of either party upon reasonable notice to the other party, and that there was a triable issue of fact whether Randall gave the Union reasonable notice that it was terminating its obligations under the arbitration clause. ¹ In lieu of trial, the parties and the court agreed that the parties would submit the case to the court for decision on stipulated facts and exhibits. On August 6, 1992, the district court entered judgment in favor of Randall. The court reiterated its position that the arbitration clause in the Agreement was of indefinite duration and was terminable at will by either party upon reasonable notice to the other party. The court then concluded that: (1) Randall effectively repudiated its obligations under the clause in March of 1989 when it withdrew recognition from and refused to bargain with the Union pursuant to the Agreement; (2) by this repudiation Randall notified the Union that it was terminating its obligation to arbitrate; and (3) the notice was reasonable because it was given more than sixty days before the Union attempted to file the first grievance. The Union appeals.

II. DISCUSSION

The Union disputes the district court's ruling that the arbitration clause in the Agreement was of indefinite duration and therefore was terminable at the will of either party. As noted above, the court made this ruling in its interlocutory order of November 14, 1991, denying the parties' cross-motions for summary judgment. On August 6, 1991, after the parties submitted stipulated facts and exhibits concerning the sole remaining issue (whether Randall had effectively repudiated its obligation to arbitrate discharge grievances) the court granted summary judgment in favor of Randall. The Union appeals from this grant of summary judgment, the final judgment. ² The interlocutory ruling that the Union disputes merged into the district court's final order and thereby became appealable. EEOC v. Sears, Roebuck & Co., 839 F.2d 302, 353 n. 55 (7th Cir.1988).

We review the grant of summary judgment in Randall's favor de novo and apply the same standards as those applied by the district court. Kennedy v. United States, 965 F.2d 413, 417 (7th Cir.1992). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We review the record and all inferences drawn from it in the light most favorable to the Union. Lohorn v. Michal, 913 F.2d 327, 331 (7th Cir.1990). ³

The Union argues that the district court erred in finding that the arbitration clause in the Agreement was of indefinite duration and therefore was terminable at the will of either party because the language of the Agreement and the surrounding circumstances demonstrate that the contracting parties intended that Randall's obligation to arbitrate discharge grievances was to continue until the commencement of bargaining between the parties for a new labor contract. We start with the language of the Agreement:

4. Randall will grant recognition to the International Union, UAW, and its Local 2052 as the...