Dallas & Mavis Forwarding Co., Inc. v. General Drivers, Warehousemen & Helpers, Local Union No. 89

• Decision Date: 17 September 1992
• Docket Number: No. 91-6421,91-6421
• Parties: 140 L.R.R.M. (BNA) 3047, 123 Lab.Cas. P 10,343 DALLAS & MAVIS FORWARDING COMPANY, INC., Plaintiff-Appellant, v. GENERAL DRIVERS, WAREHOUSEMEN & HELPERS, LOCAL UNION NO. 89, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 129

972 F.2d 129

140 L.R.R.M. (BNA) 3047, 123 Lab.Cas. P 10,343

DALLAS & MAVIS FORWARDING COMPANY, INC., Plaintiff-Appellant, v. GENERAL DRIVERS, WAREHOUSEMEN & HELPERS, LOCAL UNION NO. 89,

Defendant-Appellee.

No. 91-6421.

United States Court of Appeals, Sixth Circuit.

Argued June 18, 1992.

Decided Aug. 5, 1992.

Rehearing En Banc Denied Sept. 17, 1992.

James U. Smith, III, Smith & Smith, Louisville, Ky., C. John Holmquist, Jr. (argued and briefed), Linda G. Burwell, (briefed), Charfoos, Reiter, Peterson & Holmquist, Birmingham, Mich., for plaintiff-appellant.

Alton D. Priddy (argued and briefed), Hardy, Logan, Priddy & Cotton, Louisville, Ky., for defendant-appellee.

Before: MERRITT, Chief Judge; and KEITH and RYAN, Circuit Judges.

MERRITT, Chief Judge.

The majority of an arbitration board determined that the plaintiff violated provisions of a collective bargaining agreement by refusing to merge its seniority list with the list of another employer that laid off workers after a loss of business in the wake of a major contract revision. The plaintiff sought to have the award for the defendant vacated by the District Court. We agree with the court that the arbitration board's award was rationally drawn from the essence of the collective bargaining agreement, and so we affirm the grant of summary judgment to the defendant.

I.

Plaintiff Dallas & Mavis [hereinafter "D & M"] delivers trucks and other vehicles from manufacturers to distribution points nationwide and in Canada. Like other employers engaged in the vehicle transshipment industry, D & M entered into a national collective bargaining agreement [hereinafter "Agreement"] with the principal union involved in this industry, the Teamsters, as well as a local supplemental agreement. D & M had an existing contract with the Ford Motor Company at its Louisville, Kentucky Truck Plant [hereinafter "KTP"] for a share of Ford's truck transshipment business from that plant. The defendant, Teamsters Local No. 89, represents the members of KTP's collective bargaining unit in this industry.

During the 1980s three companies were engaged by Ford to deliver completed trucks from KTP. These were D & M, which specialized in delivery by the "driveaway" (i.e., the "piggyback" mounting of one tractor onto another, with the lower vehicle as prime mover for both) method of shipment; Allied Systems, Inc. [hereinafter "Allied;" formerly known as Motor Convoy, Inc.], which transported trucks by the "truckaway" (loading onto tractor-driven trailers) method; and Transport Storage, Inc. [hereinafter "Transport"], which shipped trucks solely by railcar. During the early 1980s D & M shipped Ford trucks to the western portions of the United States and Canada. By mid-decade, it sought to expand its market into Transport's own delivery sector in the West and Canada.

In 1988 Ford announced that it would open rebidding on its existing KTP transshipment contracts. D & M entered its bid for what was heretofore Transport's rail deliveries, while also placing bids for the truckaway and driveaway methods. Ford awarded D & M a contract for motor deliveries into the Midwest, 11 western states and Canada, while Allied won its bid for preshipment preparations for KTP's trucks. D & M, however, had insufficient facilities in Louisville to cope with its burgeoning program. It thus was forced to look elsewhere for employees to staff the expanded routes. Transport's KTP employees were left jobless because all of its railhead operations there were eliminated in the recontracting process.

D & M entered discussions with the defendant about the company's projected staffing needs for the new operations. The plaintiff reasoned that it was obligated under the Agreement to offer the new job vacancies first to the laid-off Transport employees. Only after those positions were filled would D & M then create new positions for 14 Allied workers who had also been laid off in the wake of rebidding. Teamsters Local No. 89 disagreed, and it filed grievances on behalf of only Allied's and Transport's employees with the National Joint Arbitration Committee [hereinafter "Committee"]. These grievances required consideration at two Committee sessions in April and October 1988.

The Committee determined at the April meeting that the Agreement's provisions were not fully applicable. Instead of "canceling" Allied as a shipper, Ford's rebidding merely required realignments in Allied's service territories. Nevertheless, the Committee required the 14 laid-off Allied workers to be incorporated into D & M's work force, thus allowing them to "follow the work," i.e., to allow them to transfer freely between employers performing essentially the same tasks. This principle was identified as a relatively common practice in the vehicle transportation industry.

This issue arose anew at the Committee's October 1988 meeting, coupled with a related seniority issue. D & M's employees objected that Local 89 had not informed them about the two grievances submitted to the Committee in April, and they contended that this violated their rights to adequate notice. Transport's employees likewise requested a transfer with full seniority rights to Allied. Allied denied these transfers on the grounds that their former employment in the rail yard was not so substantially similar to Allied's as to allow Transport's employees to "follow the work." Based on evidence that Allied was contemplating expansion, the Committee modified its April decision: D & M would no longer be required to provide positions on its seniority list to Allied's 14 employees. Separately, the Committee rebuffed the Transport employees' efforts to "follow the work" to either D & M or to Allied.

In October 1989, Ford again solicited bids on the KTP shipping operations as part of a wholesale redistribution of traffic in the eastern, southern and central United States. D & M now placed bids upon the "decking" (preshipment preparations) process, which it won from Allied. D & M also received part of its driveaway bid, while losing its upper Midwest routes to Allied. D & M prepared its new staffing plans in part upon the two 1991 Committee decisions. It anticipated that Allied's employees would not have a right to have their seniority merged with D & M's KTP seniority list. D & M offered the new decking jobs to its own drivers and employees at other facilities, as well to some non-union workers. It also refused to hire any of Allied's laid-off workers.

D & M and Allied filed motions to establish seniority rights with the Committee in March 1990. These focused upon Article 5 (concerning the "dovetailing," or merger, of seniority rights) and Article 26 (governing the transfer of seniority rights). The Committee, however, was soon deadlocked on what should be the correct resolution. To break the impasse, the issue was referred by the Committee to a board of three professional FMCS arbitrators--one picked by the union, one by the employer, and a disinterested third arbitrator selected jointly by the other two--under Article 7, § 9. ¹

The arbitrators rendered an opinion and award in December 1990. The majority held that D & M had violated the Agreement in refusing to merge its KTP seniority list with Allied's list of laid-off employees. The board scrutinized Article 5, § 2, which expressed a preference for merger of employee seniority rights under the Agreement, ² and Article 5, § 4(c), which addressed the circumstances under which an employer's business is "canceled" by the shipper and when the canceled employer's workers could then be reassigned to a "remaining" employer. ³ In contrast stood Article 5, § 5(a), which required a shipper to cancel its business with an employer and then to transfer part or all of that work to another employer not doing business at the shipper's present location before dovetailing occurred. ⁴ The majority of the board reconciled these distinctions by examining Article 5, § 8, ⁵ stating that the rules suggested in the Agreement were meant only as illustrative guidelines and that the National Arbitration Committees were empowered by the Agreement to determine seniority questions.

The two majority arbitrators determined that the facts of the case fit more squarely under the ambit of § 4(c) than under § 5(a) or any other sections. They recognized that two possible interpretations could be accorded to § 4(c): either the subsection was inapplicable because Ford did not "cancel" all of Allied's traffic at KTP, or it was applicable because Allied "retained" some traffic--albeit of a different kind from its past operations--at KTP after Ford's 1990 renegotiations. While either interpretation might be correct, however, the majority interpreted Article 5, § 8 as authorizing them to extend that subsection's application to encompass the change in Allied's operations:

[E]ven if the [arbitration board] were to determine that the facts of the present case fell outside the literal meaning of subsection 4(c), it would be proper to extend application of that subsection in accordance with section 8 of Article 5.

Arbitration Opinion and Award at 28. The board concluded that if Article 5, § 4(c) established only a guideline, it was "highly doubtful" that the Agreement's drafters would have intended for different results to arise from total versus partial cancellations of an employer's business. This interpretation was reached despite Article 5, § 7(b)'s specific reference to "partial" closings. ⁶ The majority held that D & M had violated the Agreement, and it ordered D & M to draft and implement a seniority list dovetailing the laid-off workers into its work force; to offer jobs to those employees on the dovetailed list commensurate with their seniority; and to make whole Allied's employees who accepted those jobs.

The plaintiff sought to have the arbitration award vacated by the Western District of Kentucky under section 301 of the Labor Management Relations Act,...