Hall v. Int'l Union
| Decision Date | 14 June 2013 |
| Docket Number | Civil Action No. 3:10-cv-418-DSC |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | CHARLES R. HALL, JR., JOHN O'NEILL, JR., TIMOTHY L. PHILLIPS, CHARLIE R. WOOTEN, WILLIAM T. BOLIN, JEFFREY S. BOSTON, GARY G. BOWLIN, II, RANDELL T. BURCHAM, JOSEPH D. BURKE, JR., MAURICE BURRIS, RICKY L. CARPENTER, ALVIN R. CARVER, JR., CLYDE M. CHILDERS, TIMOLYN A. CLARK, EARL E. CURRY, III, DARRELL E. DELLINGER, CHARLES E. DILLING, TOMMY A. FAULKENBURY, BEN FEWELL, JOHN H. HALL, JR., BRODY L. HARKEY, DEANIE F. HARKEY, DOUGLAS W. HOLT, WILLIAM D. HOVIS, BERWYN L. JOHNSON, TERRELL JOHNSON, KEVIN D. JONES, KELLY J. KOWALCZYK, ARCHIE LANEY, MARCUS LEECH, TODD LLOYD, DONNIE LOCKLEAR, JOHN A. MCCOIG, JOHN MOORE, RONALD A. MUSE, DAVID NEAL, JOHN E. NORMAN, CARL PRIVETTE, JOHN D. ROBERTS, ANTHONY J. RYALL, STEVEN J. STAMPER, SAMUEL J. STEPHENS, JR., JEFF THRIFT, DANIEL L. USERY, RICHARD A. WHITENER, AND DAVID W. WILLIAMS, JR. EACH INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS, v. INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW; AND UAW LOCAL UNION 5285, DEFENDANTS. |
THIS MATTER is before the Court on "Defendants' Motion for Summary Judgment," Doc. 90, filed on April 15, 2013 and its associated brief and exhibits, Doc. 91. On May 2, 2013, Plaintiffs filed "Plaintiffs' Memorandum in Opposition to Defendants' Motion for Summary Judgment," Doc. 94, and its associated exhibits, Docs. 95 and 96. On May 13, 2013, Defendants filed "Defendants' Reply in Support of of Their Motion for Summary Judgment," Doc. 98.
The parties have consented to Magistrate Judge jurisdiction under 28 U.S.C. § 636(c), and this Motion is now ripe for the Court's consideration.
After fully considering the arguments, the record, and the applicable authority, the Court GRANTS Defendant's Motion for Summary Judgment, as discussed in detail below.
This matter arises out of the collective bargaining relationship between Daimler Trucks North America LLC, formerly known as Freightliner LLC (the "Company") and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW and UAW Local Union 5285 (collectively, "the UAW" or "the Union") at the Company's truck production plant in Mt. Holly, North Carolina.
In 2006, the UAW and the Company executed a collective bargaining agreement (the "2006 CBA") for the Mt. Holly plant covering the period from August 26, 2006 to April 2, 2010. As stated in the 2006 CBA, the UAW is the exclusive representative for Production and Maintenance employees at the Mt. Holly plant. The 2006 CBA contained a Letter of Understanding on Job Security, known as the "70/30 provision." In relevant part, the Letter provided that the Company could not lay off employees at Mt. Holly unless the plant was producing at least 70% of its M-2 trucks sold in the United States and Canada. The Company also produces M-2 trucks at a plant in Santiago, Mexico.
In January 2009, the Company announced its intention to idle or close the Mt. Holly plant. At that time, the Company was producing less than 70% of its North American trucks at the Mt. Holly plant. The UAW instituted a class action grievance ("the 70/30 grievance") on behalf of all adversely affected employees. The UAW demanded that the Company cease violating the terms of the 2006 CBA; that the employees be returned to their jobs; and that the employees be made whole for the loss of their compensation and benefits, as well as for other consequential losses. The arbitration was held before Robert B. Moberly, Dean of the University of Arkansas School of Law.
On January 21, 2010, the Arbitrator ruled in favor of the UAW and ordered that the Company "make whole" certain bargaining unit employees affected by the contract violations. The Arbitrator expressly directed the question of "employee losses" to the Company and the UAW for further "consideration and determination", and retained jurisdiction "to determine any disputes over the interpretation or application of this award, including the extent of employee losses." Doc. 91, Ex. 4, p. 14.
Tim Bressler, then Assistant Director of the UAW's Heavy Truck and Engine Department, was initially the lead negotiator for the Union in determining the remedy for 70/30 grievance. Bressler discussed the award with David Carson, the General Manager for Human Resources at the Company. He asked Carson to supply the Union with information to use in calculating the make whole remedy ordered by the Arbitrator. Carson did so on March 5, 2010. Bressler asked his Local Representatives to provide him with an estimate of the average number of man hours needed to produce an M-2 truck. They estimated that it took about 100 hours of labor to produce a M-2 truck at Mt. Holly.
Based upon information from the Company and Local 5285, Bressler and Brad Markell at the UAW Research Department drafted a letter to the Company with the UAW's initial proposal for a make whole remedy under the arbitration award.
The UAW's initial proposal calculated the number of "trucks owed" at approximately 7,427. This represented the number of additional trucks that would have been built at the plant if the Company had complied with the 70/30 provision. This figure did not include any "trucks owed" after February 2010, which meant that the Company's liability was still increasing at the time the letter was written. The UAW assumed that employees worked approximately 145.33 hours per month. The information provided by the Company reflected that employees worked an average of 1,744 hours per year. The number of hours per month was calculated by dividing 1,744 by twelve.
The data provided by the Company also included the cost of paid leave such as vacations, holidays, and sick days. The cost of this paid leave was 21.5% of the base hourly wage rate.
Based upon this information, the UAW calculated "gross damages" on a monthly basis by multiplying the number of "trucks owed" times the number of hours needed to produce each truck. They then divided the hours by 145.33 to determine the number of employees needed to make the additional trucks. They increased that headcount by 21.5% to account for paid time off. The Union calculated the back pay due per month by assuming that each employee worked 145 hours and was paid $37.05 per hour. This total wage rate for the employees' back pay included hourly wages, paid time off, shift premiums, overtime premiums, company 401(k) match, and the Company life insurance contributions.
The UAW's proposal demanded that the Company pay Social Security and Medicare taxes on the back pay, and that it repay unemployment benefits received by employees inaccordance with state law. The Union also proposed that the Company reimburse employees who bought COBRA health insurance as well as those who paid medical bills that would have been paid by Company insurance. Finally, the Union demanded that the Company restore pension and post-retirement health credits that employees would have earned.
The UAW did not demand interest on the back pay because that is not commonly part of a make whole award in labor arbitrations. They did not seek compensation for damages that employees suffered to their personal finances (e.g. the loss of cars, homes or credit) because such damages would have been difficult to ascertain, and are not commonly awarded in labor arbitrations.
On March 12, 2010, Bressler sent the letter to the Company detailing an amount of $33.4 million owed to the employees through February 2010. The Union understood that the $33.4 million figure was an opening demand, with all of the assumptions weighing in favor of a larger amount owed to the bargaining unit employees. The Union anticipated that the Company would contest those assumptions and then the parties would negotiate an agreement. The Union did not want to return to the Arbitrator if it could reach a fair settlement out of fear that the Arbitrator might narrow the scope of the remedy. In this industry, a truck is not produced until it has been purchased by the customer. The Company decides whether to make a sale based in large part upon the cost of manufacturing the truck. At the arbitration hearing, the Company argued that it would not have sold the additional trucks if it had to produce them at Mt. Holly because of the higher labor costs there.
On April 29, 2010, Carson proposed a "production model" to re-create the truck production that would have occurred at Mt. Holly if the Company had adhered to the 70/30 provision. This model assumed that it would take approximately 92 man-hours to build a truck.It also contained a 14.3% adjustment for paid time off. Finally instead of determining headcount and damages on a monthly basis, it proposed to "smooth out" monthly fluctuations by assuming two different daily build rates for trucks: 44 trucks per day in high production months and 33 trucks per day in low production months. After UAW officials reviewed the Company's proposed production model, the parties arranged a face-to-face meeting to discuss the remedy on June 3 and 4, 2010.
Bressler was promoted at the beginning of June 2010. Newly appointed UAW Administrative Assistant Willard Beck assumed the lead for the Union negotiating team. Ricky McDowell, President of UAW Local 5285, was not involved in any of the negotiations. He kept the Local 5285 members informed of the negotiations based upon information he received from the International Union.
There were several major issues at the June meetings. First, the Company proposed paying a lump sum as the remedy, leaving it to the UAW to devise a formula for distribution to individual employees. The UAW rejected that proposal. They believed that individual awards of back pay were necessary to protect the members' social security contributions, post-retirement health care...
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