Boeing Co. v. International Ass'n of Machinists and Aerospace Workers, AFL-CIO

• Decision Date: 15 November 1974
• Docket Number: AFL-CIO,No. 73-1052,73-1052
• Citation: 504 F.2d 307
• Parties: 87 L.R.R.M. (BNA) 2865, 75 Lab.Cas. P 10,462 The BOEING COMPANY, Plaintiff-Appellee-Cross v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS,, etal., Defendants-Appellants-Cross Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 307

504 F.2d 307

87 L.R.R.M. (BNA) 2865, 75 Lab.Cas. P 10,462

The BOEING COMPANY, Plaintiff-Appellee-Cross v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE

WORKERS, AFL-CIO, etal.,

Defendants-Appellants-Cross Appellees.

No. 73-1052.

United States Court of Appeals, Fifth Circuit.

Nov. 15, 1974.

Plato E. Papps, Bernard Dunau, Washington, D.C., Frank E. Hamilton, Jr., Tampa, Fla., for defendants-appellants.

James M. Blue, Miami, Fla., Granville M. Alley, Jr., Tampa, Fla., for plaintiff-appellee.

Before BROWN, Chief Judge, and GEWIN and GOLDBERG, Circuit Judges.

GOLDBERG, Circuit Judge:

This clash between the Boeing Company (Boeing) and the International Association of Machinists and Aerospace Workers (IAMAW) over Boeing's obligations to some 1100 installation support services employees at John F. Kennedy Space Center, Florida, has spread far beyond the launch pad and into the executive bureaucracy, the halls of Congress, and several federal courtrooms. In other forums, the great issues of national labor policy and government contracting policy have been debated and determined in their ways. Ours is the more mundane, but nonetheless complex, task of defining the obligations of a successor employer to arbitrate claims submitted by a union on behalf of incumbent employees of a predecessor employer.

I FACTS

From March, 1964, until April 1, 1971, Trans World Airlines, Inc. (TWA) performed 'installation support services' ¹ at Kennedy Space Center under contract with the National Aeronautics and Space Administration (NASA). The approximately 1100 nonsupervisory personnel employed by TWA were represented in collective bargaining by IAMAW. A collective bargaining agreement between TWA and IAMAW, n2 entered into on January 28, 1970, was in force at the time TWA's contract with NASA expired, and was to 'remain in full force and effect to and including December 31, 1971.' Two subordinate IAMAW units, District Lodge 142 and Local Lodge 773, helped administer the TWA-IAMAW agreement.

In June, 1970, NASA invited bids for performance of the Kennedy Space Center installation support services duties for a one-year period commencing February 1, 1971 (performance to begin April 1, 1971), with option for NASA to extend the contract for four successive one-year periods. TWA, Boeing and five other companies submitted proposals. Four of the offerors, including TWA, based their computations of labor costs on the wage rates and fringe benefits established by the existing TWA-IAMAW collective bargaining contract. Boeing based its computation of labor costs on the wage rates and fringe benefits provided under its own existing collective bargaining agreement with IAMAW, which covered some 287 kennedy Space Center employees performing mission support services known as 'hardware contracts' on the Saturn V Launch vehicle. The wages and benefits fixed by the Boeing-IAMAW agreement were substantially below those specified in the TWA-IAMAW agreement, ³ and the Boeing-IAMAW agreement was administered through different local subordinates, District Lodge 166 and Local Lodge 2061.

In November, 1970, NASA announced that Boeing had been selected to perform the installation support services at Kennedy Space Center. Although both TWA and IAMAW vigorously protested NASA's decision, ⁴ Boeing began performance of the contract on April 1, 1971, with a work force of 981, ⁵ of whom 380 were TWA incumbents. On this appeal the parties have debated at length the reasons why a greater percentage of incumbents were not hired by Boeing. The district court's opinion provides a partial summary:

When Boeing first learned that it would get the contract for support services commencing April 1, 1971, it delivered over 1,000 job application forms to TWA's Industrial Relations office for dissemination to TWA employees. Boeing offered evidence that IAM(AW) officials-- International and local-- had discouraged TWA support service employees from seeking employment with Boeing and for that reason by April, 1971, of the approximately 1,000 Boeing employees hired to perform under the support services contract less than 400 were formerly TWA employees. At first in the course of this suit the defendants contested that position . . . and contended there was discrimination by Boeing in its hiring. However, in its brief filed July 3, 1972, IAM(AW) withdrew for the purposes of this case that contention.

Boeing Co. v. International Association of Machinists & Aerospace Workers, M.D.Fla.1972, 351 F.Supp. 813, 815. IAMAW emphaiszes here, however, that the TWA employees were dissatisfied with the wages and benefits offered under the Boeing contract and that the environment surrounding Boeing's takeover was highly unsettled. In particular the union argues that Boeing and NASA had not yet entered into a contract, and a TWA protest to the contract award was still pending, as of early February, 1971, so that it would have been premature for the incumbent work force to commit itself to a contractor whose selection was still in doubt. In any case, by February 19, 1971, when an IAMAW spokesman told Boeing representatives that the union would cooperate in distributing Boeing employment applications to TWA incumbents and in transmitting completed applications to Boeing, Boeing had extended offers to and received acceptances from 521 nonincumbents, more than half its workforce.

When Boeing took over performance of the installation support services work on April 1, 1971, the TWA incumbents hired by Boeing reported for work as new employees with no seniority and at reduced wages. Boeing gave each of the IAMAW-represented employees a copy of the Boeing-IAMAW agreement and a notice stating that IAMAW was its employees' representative and that terms of employment were governed by the Boeing-IAMAW agreement.

On April 26, 1971, IAMAW advised Boeing that

in accordance with Article XI(b)(5) of the (TWA-IAMAW) collective bargaining agreement . . . (it was) submitting the following grievance relating to matters general in character:

1. The Boeing action failed to retain in employment as of April 1, 1971, at least 602 members of the incumbent work force performing installation support services work at Kennedy Space Center, Florida, and this failure constitutes a reduction in force out of seniority order, and/or a dismissal without just cause and without compliance with the procedures requisite to that action, in violation of the IAMAW/TWA agreement.

2. The Boeing Company failed and fails to accord to the members of the incumbent work force whom it did retain in employment on April 1, 1971, the seniority that each employee had as of April 1, 1971, but instead treats them as new hires with zero seniority.

3. The Boeing Company failed as of April 1, 1971 and fails, to observe the wages, other benefits, and other employment terms of the TWA/IAMAW agreement as it applies to the performance of installation support service work at Kennedy Space Center, Florida, and which governs for its duration the wages, hours and other employment terms at the Kennedy Space Center.

Boeing declined to consider the merits of the grievances, stating in part:

As of April 1, 1971, the date on which Boeing assumed its responsibilities under the Installation Support Services contract, a substantial majority of the bargaining unit employees were from sources other than Trans World Airlines. Therefore, Boeing is of the opinion that it is not a successor to the TWA/IAM(AW) agreement. Furthermore, even if the majority of the Boeing work force was made up of former TWA employees, it is the position of the Boeing Company that a finding of successorship would be precluded because of the substantial change in the employing industry.

Consistent with our position that the contract on which the purported grievances are based has no application to the Boeing Company or any of its operations or activities, we cannot and do not recognize your letter of April 26, 1971, as a grievance and decline to respond to it as such.

During the pendency of this dispute IAMAW informed Boeing that, while it would continue to press for adoption of the TWA-IAMAW agreement, it would utilize the dues deduction authorization cards of Local Lodge 2061 (the IAMAW local affiliated with Boeing) until the issue was resolved. Boeing deducted union dues in accordance with the individual authorizations; instead of transmitting the checked-off dues to Local 2061 pursuant to the authorization, however, Boeing deposited the collected dues in an escrow fund on the ground that IAMAW had refused to recognize the Boeing-IAMAW collective bargaining agreement.

On May 10, 1971, Boeing filed this suit under 301 of the Labor Management Relations Act, 29 U.S.C. 185, against IAMAW in the United States District Court for the Maiddle District of Florida, seeking a declaratory judgment that Boeing 'is not a successor to and is not bound by the collective bargaining agreement executed by the defendant and Trans World Airlines.' IAMAW filed a counter-claim seeking a declaration that Boeing is bound by the terms of the TWA-IAMAW agreement and an order compelling Boeing to arbitrate the grievances submitted by IAMAW, and an order requiring Boeing to remit the dues which the employees had authorized the company to check-off from their wages.

Upon cross-motions for summary judgment, the District Court declared that 'Boeing is not a successor and is not bound' by the TWA-IAMAW collective bargaining agreement, and declined to order Boeing to arbitrate the grievances submitted under that agreement. The District Court did, however, require Boeing to remit the dues previously withheld and escrowed. IAMAW appeals the declaration that Boeing is not a successor; Boeing cross-appeals the order that it turn over the checked-off dues. We affirm.

II $13SUCCESSORSHIP

Had 41 U.S.C. 353(c) been in effect at the time when the events giving rise to this controversy...