Ostrofsky v. United Steelworkers of America

• Decision Date: 20 March 1959
• Docket Number: Civ. No. 10909-10912.
• Citation: 171 F. Supp. 782
• Parties: Aaron OSTROFSKY v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2609, an unincorporated association, and Bethlehem Steel Company, a body corporate. Joseph HENDERSON v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2610, an unincorporated association, and Bethlehem Steel Company, a body corporate. William H. WOOD v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2610, an unincorporated association, and Bethlehem Steel Company, a body corporate. Benjamin M. FINO v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2610, an unincorporated association, and Bethlehem Steel Company, a body corporate.
• Court: U.S. District Court — District of Maryland

171 F. Supp. 782

Aaron OSTROFSKY v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2609, an unincorporated association, and Bethlehem Steel Company, a body corporate.

Joseph HENDERSON v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2610, an unincorporated association, and Bethlehem Steel Company, a body corporate.

William H. WOOD v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2610, an unincorporated association, and Bethlehem Steel Company, a body corporate.

Benjamin M. FINO v. UNITED STEELWORKERS OF AMERICA, an unincorporated association, A.F.L.-C.I.O., United Steelworkers of America, Local Union No. 2610, an unincorporated association, and Bethlehem Steel Company, a body corporate.

Civ. Nos. 10909-10912.

United States District Court D. Maryland.

March 20, 1959.

COPYRIGHT MATERIAL OMITTED

Fred E. Weisgal, Baltimore, Md., for plaintiffs.

David E. Feller and Arthur J. Goldberg, Washington, D. C., and Jacob J. Edelman and Marshall A. Levin, Baltimore, Md., for United Steelworkers of America and Locals No. 2609 and 2610.

John H. Morse and Cravath, Swaine & Morse, New York City, and H. Vernon Eney, William J. McCarthy and Venable, Baetjer & Howard, Baltimore, Md., for Bethlehem Steel Co.

THOMSEN, Chief Judge.

These four consolidated actions are before the court on motions for summary judgment filed by each of the parties. Each action was originally brought in the Superior Court of Baltimore City by a former employee of Bethlehem Steel Company (Bethlehem) against that Company, The United Steelworkers of America AFL-CIO (the Union), and the local of which he was a member. The actions were removed to this court, by the Union and the locals on the ground that a federal question is involved, and by Bethlehem on grounds both of federal question and diversity.

Each plaintiff was discharged by Bethlehem on May 24, 1957, for the stated reasons that he was a security risk and that he had engaged in conduct detrimental to the business interests of Bethlehem. In each action the plaintiff seeks (1) to compel arbitration of his claim that he was wrongfully discharged under the terms of a collective bargaining agreement between Bethlehem and the Union, and (2) to recover $100,000 damages from the defendants, jointly and severally, on account of such discharge and the Union's refusal to press his grievance.

The principal issues raised are whether and under what circumstances plaintiffs have the right to maintain such actions, whether the Union or the Company violated any contractual or statutory duty to plaintiffs in refusing to submit plaintiffs' grievances to arbitration, and whether the discharges were for "just cause".

The essential facts are not disputed.

The Parties

Bethlehem, a Pennsylvania corporation, owns and operates a number of steel plants and shipyards, including a plant at Sparrows Point, Maryland, which is the largest steel plant in the United States and employs about 29,000 people.

The Union is an unincorporated association, which acts as the collective bargaining representative for employees throughout the steel industry. Each applicant for membership in the Union signs a form which authorizes the Union, its agents or representatives, "to act for me as a collective bargaining agency in all matters pertaining to rates of pay, hours of employment, or other conditions of employment, and to enter into contracts with my employer covering all such matters." The Union's Constitution authorizes it to act as the exclusive agent for its members for the "presentation, maintenance, adjustment and settlement of all grievances and other matters relating to the terms and conditions of employment or arising out of the employer-employee relationship."

Plaintiffs had been employed at Bethlehem's Sparrows Point plant for more than eight years before May 1957, and were members of the Union, Ostrofsky of Local 2609 and the others of Local 2610.

The Agreement

On August 3, 1956, the Union entered into a comprehensive agreement with Bethlehem which sets forth the terms and conditions of employment of the steelworkers at Sparrows Point and other Bethlehem plants. It contains a so-called "Management Functions" clause (Article XIII), which states:

"The management of the Plants and the direction of the working forces and the operations of the Plants, including * * * the suspending, discharging or otherwise disciplining of employees for just cause * * * are the exclusive functions of the Management; provided, that in the exercise of such functions the Management shall observe the provisions of this Agreement * * *."

Article XII provides that Bethlehem, before discharging an employee, shall give him written notice of its intention to discharge him. The employee then has five days in which to request a hearing, whereupon Bethlehem must supply the employee with a written statement of its reasons for the discharge, and schedule a hearing before an official of the Company. At such hearing the employee may appear for himself or may be represented by the Grievance Committee of the Local Union. Within ten days after the hearing the Company must inform the employee of the action it has decided to take. If the employee is discharged, he may file a written grievance with the Management Representative, to be processed according to the grievance procedure provided in Article XI of the Agreement, beginning with "Step 3". The Step 3 meeting is "between the Management's Representative and the Grievance Committee and a representative of the Union". At that meeting, witnesses may be called by "either the Management or the Union." Minutes of the meeting "shall be signed by the Chairman or Secretary of the Grievance Committee and the Management's Representative", and shall include a brief statement of the Union's position with regard to each grievance, a brief statement of the Company's position, the action taken, and a "statement as to whether or not the Union concurred in such action and of any exceptions taken by the Union thereto."

There is no provision for any further appeal by the employee. Either the Union or the Company may carry a grievance to Step 4 by giving notice to the other party in writing within thirty days after the date of the Step 3 meeting, or within twenty days after a draft of the minutes of such meeting shall have been received by a representative of the Union, whichever period is longer. Step 4 meetings are held at the Company's headquarters in Bethlehem, Pennsylvania, between two representatives of the Union and two representatives of the Company.

If a satisfactory settlement is not reached at the Step 4 meeting or meetings, and if the grievance involves "the meaning and application of the provisions of this Agreement", the Union may appeal to an "impartial umpire to be appointed by mutual agreement of the parties hereto", i. e., the Company and the Union. If no such appeal is taken, "such grievance shall be deemed to have been settled in accordance with such action and no appeal therefrom shall thereafter be taken". The decision of the umpire on any matter which shall properly have been referred to him shall be final and binding "upon the Company and all Employees concerned therein".

Bethlehem's Policy

In 1954 Bethlehem was advised that a subcommittee of the Senate Committee on Government Operations had recommended to the Secretary of Defense that he withdraw or cancel any defense contracts with corporations "that insist on employing Communists or subversives, or those who refuse to deny or affirm their connection with subversive organizations". Shortly thereafter Bethlehem adopted a policy not to employ members of the Communist Party and discharged three men, Ault, Piccuci and Szabo, who had been identified as members of the Communist Party by one Thomas, a witness before that Congressional Committee. Relying upon the Fifth Amendment, these men had refused to admit or deny the accusation before the Committee, and they refused to answer similar questions put to them by the Company. Bethlehem discharged them as security risks and for conduct detrimental to the business interests of the Company. The Union carried the grievances of these three men to arbitration before Judge Charles Desmond¹, who found that "the absence of any denial does not make Thomas' statement true, but it leaves those statements without disproof and creates at the very least a basis by the Company for believing Thomas. Whether I myself would so believe it is beside the point. It was not irrational or baseless or fundamentally unjust for the Company to believe him and to act on that belief." Judge Desmond concluded that there was "just cause for the discharge by the Company of each of the grievants".

The Discharges in the Instant Cases

In May 1957 the House Committee on Un-American Activities conducted an investigation of Communist activity in the Baltimore area. At a public hearing before the Committee on May 7, Clifford C. Miller testified that he had been a member of the Communist Party in 1948 and 1949 and had rejoined the Party in 1953 as a secret agent of the FBI. He named the four plaintiffs—Ostrofsky, Henderson, Wood and Fino—and two other Bethlehem employees, Williamson and Spector, as having been members of the Communist Party. Those six men were called before the subcommittee for questioning on the same day. All of them refused to answer any questions relating to any activity for or affiliation with the Communist Party, invoking the privilege against self-incrimination provided by the Fifth Amendment. The hearings and the refusal of the men to testify received wide publicity.

On the following day Bethlehem notified each of the six men in writing that it intended to discharge him on the...