John Morrell & Co. v. Local Union 304A of United Food and Commercial Workers, AFL-CIO

Decision Date07 September 1990
Docket NumberAFL-CIO and CL,AFL-CIO,A,89-5152,AFL-CIO and CLC,Nos. 89-5109,s. 89-5109
Citation913 F.2d 544
Parties135 L.R.R.M. (BNA) 2233, 59 USLW 2212, 116 Lab.Cas. P 10,289, 31 Fed. R. Evid. Serv. 629 JOHN MORRELL & COMPANY, Appellee, v. LOCAL UNION 304A OF the UNITED FOOD AND COMMERCIAL WORKERS,; United Food and Commercial Workers International Union,; Dennis Foster, Individually and in his capacity as president of defendant Local 304A; James R. Lyons, Individually and in his capacity as Business Representative and Corresponding Secretary of defendant Local 304A; John Doe and Other Persons Unknown, Appellants. JOHN MORRELL & COMPANY, a corporation, Appellee, v. LOCAL UNION 304A OF the UNITED FOOD AND COMMERCIAL WORKERS, AND CLC; United Food and Commercial Workers International Union,ppellants.
CourtU.S. Court of Appeals — Eighth Circuit

Laurence Gold, Washington, D.C., for appellants.

George A. Joseph, Chicago, Ill., for appellee.

Before McMILLIAN, JOHN R. GIBSON and BOWMAN, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

The Unions representing workers at John Morrell & Company's plant in Sioux Falls, South Dakota appeal a $24.6 million jury award entered against them in favor of Morrell. The jury found that the Unions had breached the no-strike clause of the parties' collective bargaining agreement by engaging in sympathy strikes. The district court, 1 708 F.Supp. 273, entered judgment for Morrell and also vacated an arbitration award, issued between the liability and damages phases of the bifurcated jury trial, that had held that the no-strike clause did not bar sympathy strikes. The Unions now appeal and argue that the district court erred by: (1) submitting the issue of whether the collective bargaining agreement prohibited sympathy strikes to the jury; (2) making various rulings during the damages phase of the trial; and (3) vacating the arbitration award. We affirm the judgment of the district court.

Morrell operates a meat packing business and has plants at various locations, including Arkansas City, Kansas; Sioux City, Iowa; and Sioux Falls, South Dakota. Both Local 304A of the United Food and Commercial Workers, and the United Food and Commercial Workers International Union (collectively the "Unions") represent the Sioux Falls employees. On July 1, 1986, the Arkansas City workers went on a lawful strike designed to secure a new collective bargaining agreement with Morrell. To increase the economic pressure on Morrell, Arkansas City employees travelled to the Sioux Falls plant and established picket lines there on August 4 and 15, 1986. On both occasions, the Sioux Falls workers honored these picket lines and refused to report to work.

Morrell then sought to enjoin the Sioux Falls employees from striking under section 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185 (1988). Morrell alleged that the Sioux Falls employees breached the no-strike provision of their collective bargaining agreement 2 by honoring the picket line established by the Arkansas City employees. The clause provides that:

Provisions having been made by this Agreement and local agreements for the peaceful and orderly settlement of any disputes which may arise between Company and the Union or local Unions or any Employee or Employees, it is agreed that during the term of this Agreement there shall be no strike, stoppage, slowdown, or suspension of work on the part of the Union or any local Union or any Union member or lockout on the part of the Company on account of such disputes until after an earnest effort shall be made to settle all such matters in the manner provided in the respective agreements.

(1985-88 Sioux Falls Collective Bargaining Agreement, Article II, cl. 5).

After an expedited evidentiary hearing, the district court granted Morrell preliminary injunctive relief. Upon expedited appeal to this court, we vacated the injunction 3 because the strikes were sympathy strikes, 4 as opposed to economic strikes and thus could not be enjoined under the Norris-LaGuardia Act, 29 U.S.C. Sec. 104 (1988). John Morrell & Co. v. Local Union 304A of the United Food & Commercial Workers, 804 F.2d 457 (8th Cir.1986) (per curiam), cert. denied, 481 U.S. 1014, 107 S.Ct. 1889, 95 L.Ed.2d 496 (1987). After remand to consider Morrell's claim for damages, and while discovery was in progress, employees of the Sioux City, Iowa plant also commenced a lawful strike in an effort to obtain a new collective bargaining agreement. The Sioux City workers picketed the Sioux Falls plant, as the Arkansas City workers had done, and the Sioux Falls workers again honored the picket line. This strike at the Sioux Falls plant lasted from May 1 to November 4, 1987. Morrell then filed an amended complaint seeking damages based on that most recent strike, and that case was consolidated with the other pending actions.

Upon the Unions' motion for summary judgment, the district court 5 ruled both that the refusal by the Sioux Falls workers to cross the picket line in 1987 was a sympathy strike in support of the Sioux City workers, as opposed to an economic strike, and that it was for a jury to decide whether the collective bargaining agreement barred such strikes. The case was then transferred to the Western Division of the District of South Dakota where the court reconsidered the Unions' motion for summary judgment and held that a jury should decide both: (1) whether the 1987 strike was a sympathy strike; and (2) whether the no-strike provision of the collective bargaining agreement prohibited sympathy strikes.

The case then proceeded to trial before a jury. The Unions moved for a directed verdict based upon their assertion that, as a matter of law, the collective bargaining agreement did not bar sympathy strikes. The motion was denied. The case was submitted to the jury on special interrogatories and, on March 10, 1988, the jury returned a verdict for Morrell on liability because it found that: (1) the 1987 strike was a sympathy strike; and (2) the Sioux Falls workers were prohibited from engaging in sympathy strikes by the no-strike provision in the agreement.

After the 1987 sympathy strike had concluded, but before this jury verdict, the Sioux Falls workers sought to return to work and replace the workers hired in their absence. Morrell refused to recall the strikers. The Unions filed grievances on behalf of these workers in which they argued that the collective bargaining agreement permitted sympathy strikes and that the agreement's seniority provisions required Morrell to rehire the sympathy strikers in place of less-senior replacements. Morrell denied the grievances, and the Unions sought arbitration of the issue.

After the liability phase of the jury trial had concluded, but during the damages phase of the trial, the arbitrator issued an award in favor of the Unions which sustained the grievances. Despite the earlier jury verdict that the no-strike clause prohibited sympathy strikes, the arbitrator independently examined the meaning of the no-strike clause and concluded that it did not waive the workers' right to engage in sympathy strikes. Based upon this ruling, the arbitrator held that the strikers were entitled to exercise their seniority rights and replace the workers hired during the sympathy strike.

The arbitration award was issued on November 5, 1988, and the damages phase of the jury trial concluded on November 10, 1988. The jury awarded Morrell $24.6 million in damages based upon lost profits during the strike period.

Morrell then filed a motion to vacate the arbitration award and the Unions filed a motion to enforce the award. The two actions were consolidated. The district court vacated the award because it held that the arbitrator had exceeded his authority by deciding the issue of the legality of sympathy strikes since Morrell had not consented to arbitrate that issue. Alternatively, the court held that the award should be set aside because the doctrine of res judicata bound the arbitrator to the jury's resolution of the issue during the liability phase of the trial. The Unions now appeal the court's judgment vacating the arbitration award. We will discuss their arguments and provide further factual details as raised in the context of these issues.

I.

The Unions contend that the district court should not have allowed the jury to determine the legal effect of the no-strike clause on the Sioux Falls workers' right to engage in a sympathy strike. They advance several arguments in support of this contention and we will consider each in turn. They also challenge the court's ruling that a Morrell internal memorandum offered into evidence by the Unions was protected by attorney-client privilege.

A.

We begin by determining the effect of our earlier decision, 804 F.2d 457, on the issues raised in this appeal. The Unions urge that this earlier opinion held that the Sioux Falls collective bargaining agreement did not bar their right to participate in sympathy strikes. They specifically rely upon the following language: "To the extent that the district court found that the first strike was a sympathy strike, that the parties' no-strike clause did not prohibit sympathy strikes, and that the August 4 strike could not be enjoined by a federal court, we agree with the district court's analysis." Id. at 460. The Unions also point to language in the opinion stating that the Sioux Falls workers, by agreeing to return to work after the Arkansas City workers' picketing, did not waive the "right to engage in further lawful strike activity." Id. at 461 n. 5.

This panel is bound by Eighth Circuit precedent. Wabun-Inini v. Sessions, 900 F.2d 1234, 1240-41 n. 4 (8th Cir.1990). We need not follow dicta, however, and we are satisfied that the language identified by the Unions in our earlier Morrell opinion was not essential to the judgment in that case. The only issue presented on the expedited...

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