Ohr ex rel. Nat'l Labor Relations Bd. v. Arlington Metals Corp.

• Decision Date: 01 December 2015
• Docket Number: No. 15-CV-8885,15-CV-8885
• Citation: 148 F.Supp.3d 659
• Parties: Peter Sung Ohr, Regional Director, of Region 13 of the National Labor Relations Board, for and on Behalf of the National Labor Relations Board, Plaintiff, v. Arlington Metals Corporation, Defendant.
• Court: U.S. District Court — Northern District of Illinois

148 F.Supp.3d 659

Peter Sung Ohr, Regional Director, of Region 13 of the National Labor Relations Board, for and on Behalf of the National Labor Relations Board, Plaintiff,

v.Arlington Metals Corporation, Defendant.

No. 15-CV-8885

United States District Court, N.D. Illinois, Eastern Division.

Signed December 1, 2015

Daniel E. Murphy, Melinda S. Hensel, National Labor Relations Board, Chicago, IL, for Plaintiff.

William George Miossi, Benjamin M. Ostrander, Daniel D. Rubinstein, Derek Grady Barella, Winston & Strawn LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge:

The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO (“Union”) filed unfair labor practice charges with the National Labor Relations Board (“NLRB”) against Defendant Arlington Metals Corporation (“AMC”). Plaintiff NLRB has filed a petition seeking interim injunctive relief pending the final disposition of the administrative proceeding under 29 U.S.C. § 160(j) ( “Section 10(j)”). After considering the entire record, including the testimony and proceeding before the Administrative Law Judge (“ALJ”), the Court denies Plaintiff's petition for the following reasons.

BACKGROUND

I. Events Leading To The Negotiations At Issue

AMC is an Illinois corporation engaged in the business of steel slitting and blanking. Specifically, AMC's business involves two operations: toll processing and metal sales. (R. 20, Admin. Rec., at 47-58.) In toll processing, AMC buys steel coils from steel mills, cuts them according to the mills' customer-specifications, and collects a “tolling fee.” (Id. at 58.) In metal sales, AMC buys steel from steel mills, cuts the metal according to AMC's customer-specifications, and sells the metal to its customers. (Id. at 51-56.) Toll processing comprises about eighty percent of AMC's business while metal sales comprise approximately twenty percent. (Id. at 85.)

On October 10, 2007, the Union won a certification election and became AMC employees' exclusive collective-bargaining representative serving the following people:

All full-time and regular part-time production, maintenance, and shipping and receiving employees employed by the Employer [AMC] at its facility currently located at 11355 Franklin Avenue, Franklin Park, Illinois; but excluding office clerical employees and guards, professional employees and supervisors as defined in the Act.

(R. 20-1, Admin. Rec., at 173; R. 20, Admin. Rec., at 125-26.) The Union assigned the AMC employee representation to the United Steel Workers Amalgamated Local 7773 (“Union”)¹ . (R. 20, Admin. Rec., at 124.) At that time, the Union represented 52 unit employees. (Id. at 125.)

Soon afterward, AMC's business began to suffer, in part, from the December 2007 national recession. (Id. at 397; R. 20-1, Admin. Rec., at 303.) In 2006, AMC processed 201,867 tons of steel with 52 unit employees, reaping a $1,229 profit. (Id. at 535.) Each number would steadily decrease from 2007 to 2011. Indeed, in 2010, AMC only processed 126,912 tons of steel with 24 unit employees, losing $452,170. (Id. ) Ultimately, from 2007 to October 5, 2011, AMC lost $3,399,024. (Id. )

AMC-Union negotiations began in November 2007. (Id. at 130.) Throughout 2007 and most of 2008, the parties reached a number of agreements regarding non-economic issues. (Id. at 130-31; 136.) In late 2008, however, the parties began negotiating economic issues. (Id. at 131-32.) In 2009, AMC, still suffering from the recession, withdrew a previous wage increase proposal. (Id. at 437-38; R. 20-1, Admin. Rec., at 303.) Instead, AMC proposed its “Last Best and Final Offer:” a wage cut and 180,000-ton-steel-processing benchmark for increasing the unit employees' wages. (Id. at 438.) In May 2009, the Union rejected AMC's offer. (Id. at 371.) In August 2009, however, AMC declared that the parties were at an impasse and unilaterally implemented its proposal. (Id. at 132, 369.) Specifically, AMC stated that,

[t]he Company [AMC] will re-store [sic] the wage rates in effect immediately prior to the effective date of this Agreement if in the 12 month period immediately following the effective date of this Agreement the Company processes 180,000 tons of steel.

The Company [AMC] will pay each employee a lump sum bonus on or around the 30th month following the effective date of this Agreement, if during the second full year of this Agreement the Company [AMC] processes 180,000 tons of steel. Such lump sum payment will be equal to 1% of the employee's previous year's lowest base wage multiplied by 2080.

(R. 20-1, Admin. Rec., at 264, 371.)

The ALJ concluded that by January 2012, AMC and the Union had met at least thirty-five times to, in part, negotiate these economic issues. (R. 20-2, Admin. Rec., at 141.) Specifically, the parties met nine times between April 2011 and December 2011 to negotiate changes to AMC's 2009 unilateral wage implementation. (Id. ) In December 2011, however, AMC again declared that the parties were at an impasse. (R. 20, Admin. Rec., at 363.) As a result, in January 2012, AMC again unilaterally implemented employment terms and conditions, in part, setting the same 180,000-steel-ton threshold for wage increases. (Id. at 132-33.) In March 2012, while the parties made some progress, they could not agree upon new wage terms and conditions. (Id. 455-58.) In June 2012, the Union attempted to meet and bargain with AMC, and AMC declined, declaring that the circumstances had not changed and the parties remained at an impasse. (Id. at 458-59.)

In July 2012, an AMC employee petitioned for an election to decertify the Union as the employee's exclusive bargaining representative. (Id. at 134, 459.) The Union won that election and was re-certified. (Id. at 135.) In September 2012, the Union requested to meet and bargain with AMC regarding the 2012 unilaterally implemented wage terms and conditions. AMC declined, restating that the parties were at an impasse. (Id. at 139, 459.)

Accordingly, the Union filed unfair labor practice charges against AMC in 2013. (Id. at 139-140.) Specifically, the Union alleged that AMC had refused to bargain in good faith and illegally sponsored a decertification petition. (Id. at 140.) The parties eventually signed an informal settlement agreement on July 8, 2013. (Id. at 140-41; R. 20- 1, Admin. Rec., at 229.) Without admitting to any National Labor Relations Act (“Act”) violations, AMC agreed to meet and bargain with the Union in good faith and allow Union representatives access to its facilities to investigate health and safety concerns. (R. 20-1, Admin. Rec., at 229-32.) In addition, the settlement agreement extended the Union's certification for one year. (Id. at 229; R. 20, Admin. Rec., at 141.)

II. September and October 2013 Meetings

On September 2013, the parties met to discuss AMC's discharge of the Union's steward and two employees' insurance issues. The parties also established a collective bargaining negotiation schedule. (R. 20, Admin. Rec., at 144-48; 463-65.) The parties agreed to meet on October 31, 2013 to begin negotiating. (Id. at 144, 148.)

On October 31, 2013, the Union negotiated for a new employee contract. Before issuing a new proposal, the Union provided AMC economic evidence illustrating how the employees had suffered since the 2009 and 2012 unilaterally implemented wage terms at issue. (Id. at 162.) Specifically, the Union's “Economic Adverse Impact of AMC's Proposals on Employees” stated the following:

[1.] Likelihood that employees will not receive a wage increase in 8 years.

[2.] Employees suffered an approximate 90 cents per hour pay cut in 2009.

[3.] The economic impact on employees due to inflation-cost of living alone from 2006 to 2013 results in over a 13% loss in earning power.

[4.] The projected estimated loss in earning due to inflation-cost-of-living will result in an additional 4% loss in earnings if the employees do not receive a wage increase.

[5.] The combined economic impact due to the cost of living on employee's earnings and spendable income will equal an estimated loss of over 17% or over $2.50 per hour.

[6.] When the impact of the approximate 90 cent per hour pay cut is included the total earnings-income loss is over $3.40 per hour or over $7000 per employee per year on a straight time basis.

[7.] When the economic adverse impacts of the group insurance premiums [set forth in the terms and conditions at issue] are considered there is an estimated loss of an average of over 30 cents per hour in premiums alone. This equals a combined loss of almost $4.00 per hour.

[8.] When the out-of-pocket cost of the changed Health Care plan (HSA) is considered the cost could exceed $5000 per year or an additional $2.40 cents per hour.

[9.] The total potential adverse impact of the Company's [AMC] proposal could equal an estimated $6.40 per hour loss to employees or over $13,000 per year .

[10.] The above numbers do not take into consideration that the Company [AMC] is experiencing an hourly labor cost savings of approximately $3.67 per hour as a result of the elimination of the rest break periods [set forth in the terms and conditions at issue].

(R. 20-1, Admin. Rec., at 275, emphasis in original.)

The Union subsequently gave AMC its eleventh economic proposal. (R. 20, Admin. Rec., at 159-60.) Overall, this proposal suggested that AMC change its healthcare plan, overtime pay, vacation time, and wage calculations. (R. 20-1, Admin. Rec., at 277-78.) Particularly, with regard to wages, the Union's proposal recommended the following changes:

a. Re-storing [sic] wages previously in effect: a mathematical formula to be establish [sic] to reflect production per employee that is equal to the 180,000 ton average per year based on the average per capita employee count over a more current 12 month period based on a representative employee head count. When the equivalent tonnage per employee is reached on the

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