Paper, Allied, Chemical v. Slurry Explosive Corp.
| Decision Date | 28 July 2000 |
| Docket Number | No. Civ.A. 99-2038-CM.,Civ.A. 99-2038-CM. |
| Citation | 107 F.Supp.2d 1311 |
| Parties | PAPER, ALLIED, CHEMICAL AND ENERGY WORKERS INTERNATIONAL UNION, LOCAL 5-508, AFL — CIO, Plaintiff, v. SLURRY EXPLOSIVE CORPORATION, Defendant. |
| Court | U.S. District Court — District of Kansas |
Blake & Uhlig, P.A., Kansas City, KS, for Workers International Union, Local 5-508, plaintiff.
Michael F. Delaney, Jeffrey M. Place, Spencer, Fane, Britt & Browne, Kansas City, MO, for Slurry Explosive Corporation, defendant.
Michael T. Manley, Blake & Uhlig, P.A., Kansas City, KS, for Oil, Chemical and Atomic Workers International Union, counter-defendant.
This matter is presently before the court on the parties' cross motions for summary judgment (Docs.52, 54). Plaintiff in this case, under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, seeks to compel arbitration of plaintiff's grievance over the discharge of defendant's employee David Buzard. Alternatively, plaintiff seeks to enforce a verbal collective bargaining agreement ("CBA") allegedly entered into between the parties to restore Mr. Buzard to his previous employment position.
In its counterclaims, defendant first alleges that plaintiff breached a verbal contract wherein plaintiff allegedly agreed not to assert that Mr. Buzard was an "employee" under the terms of the parties' 1997 CBA. Second, defendant alleges plaintiff fraudulently misrepresented its intentions when plaintiff allegedly agreed not to utilize the defendant's agreement to permit Mr. Buzard to obtain unemployment benefits as evidence to show he was on a layoff, rather than discharged. As set forth in more detail below, defendant's motion is granted in part, and plaintiff's motion is granted in part.
Except where noted, the facts are not in dispute. Plaintiff and defendant were parties to a CBA, effective March 31, 1997 ("1997 contract"),1 covering the production and maintenance employees working at defendant's Hallowell, Kansas facility. The 1997 contract applied only to full-time and regular part-time production and maintenance employees. The 1997 contract excluded from coverage otherwise covered employees who were on layoff status for more than twelve months. Under its terms, a person on layoff in excess of twelve months was no longer a covered "employee."
The 1997 contract required that all disputes arising under the contract be submitted to arbitration. Article VIII of the contract provided a four-step grievance process, culminating in binding arbitration. This grievance procedure was intended "to provide an orderly method for the settlement of claims by employees or the Union concerning the specific provisions of this Agreement." Under the contract a "grievance" is a "claim by an employee, or the Union, that a term of th[e] contract has been violated." The 1997 contract limited its grievance and arbitration provisions "to grievances and claims arising and actually filed in writing during the term of this Agreement."
The 1997 contract provides that employees may only be discharged for "just cause." Violations of defendant's substance abuse policy qualify as just cause for discharge. An employee's conviction or arrest under any criminal drug statute constitutes a violation of the substance abuse policy.
Mr. Buzard was employed as a maintenance worker in defendant's Hallowell facility. On Saturday, October 26, 1996, approximately five months prior to the signing of the 1997 contract, Mr. Buzard was arrested for a criminal drug offense in Kansas. The weekend of his arrest, Mr. Buzard spoke to William Terry Wright, defendant's Operations Manager, twice by telephone. In these conversations, Mr. Buzard informed Mr. Wright of the arrest and asked for vacation time to address his legal problems. Mr. Buzard took one week of paid vacation following his arrest (Oct. 28-Nov.1). On November 4th, Mr. Buzard met with Mr. Wright, and informed Mr. Wright that a hearing in his criminal case was set for late in November. This same day (Nov. 4), Mr. Wright placed Mr. Buzard on unpaid administrative leave.
On November 19, Mr. Buzard was formally charged with a criminal drug offense under the laws of the state of Kansas. On November 27, 1996 defendant removed Mr. Buzard from its payroll. Defendant characterized the employment action as a "layoff" in a personnel action notice. The notice specified Mr. Buzard was not eligible for rehire because he was under indictment for several felony drug charges. Defendant did not provide Mr. Buzard or any of plaintiff's union representatives with a copy of the notice. At the time of Mr. Buzard's layoff, defendant paid to Mr. Buzard all of his accrued vacation pay, totaling 120 hours, for a gross payment of $1,230.00. Defendant's 1996 decisions regarding Mr. Buzard's eligibility for rehire and payment of accrued vacation contrasted with its decisions one year earlier. Specifically, in July 1995, defendant placed Mr. Buzard on temporary layoff (for reasons unrelated to the 1996 layoff), and specified on a personnel action notice that Mr. Buzard was eligible for rehire and that he would not be paid his accrued vacation.
At the time of Mr. Buzard's layoff in 1996, defendant completed an "Insurance Termination Notification" and a "UCAC Employment Termination Report." The UCAC form indicated defendant was not protesting Mr. Buzard's right to receive unemployment compensation benefits. Accordingly, Mr. Buzard drew unemployment compensation, unopposed by defendant. Mr. Buzard received the Insurance Termination Notice in the mail. This Notice identified him as a "terminating employee." Mr. Buzard believed this phrase meant only that his insurance coverage was ending, not that he had been discharged from employment.
Although Mr. Buzard understood that he was no longer on defendant's payroll after November 27, 1996, the plaintiff and defendant have different accounts of the status of Mr. Buzard's employment following his indictment. It is uncontroverted that from November 1996 through August 18, 1998 Mr. Buzard performed no work for defendant.
Plaintiff relays the following facts. Mr. Buzard testified that, after he was criminally charged and before he was placed on layoff on November 27, 1996, he met with Mr. Wright, the Operations Manager, to discuss his situation. Mr. Wright pointed out to Mr. Buzard that he was in violation of defendant's substance abuse policy. Mr. Wright laid out three options for Mr. Buzard: (1) Mr. Buzard could resign and the defendant would not mention the arrest in his employment records; (2) Mr. Buzard could try to go back to work, but his employment would be terminated; or (3) Mr. Buzard could remain on administrative leave and return to work if he was found not guilty or if the charges against him were dismissed. When presented with these options, Mr. Buzard asked about drawing unemployment compensation. Mr. Wright then offered to allow Mr. Buzard to draw unemployment while on administrative leave, under option number three. After this meeting, on or about November 27, 1996, Mr. Buzard spoke to Mr. Wright on the telephone, and Mr Wright confirmed that Mr. Buzard would be able to draw unemployment. Mr. Wright stated that the papers would be filled out indicating Mr. Buzard was on a layoff, and defendant would not contest Mr. Buzard's unemployment claim. Mr. Wright also indicated Mr. Buzard would actually remain on administrative leave.
Mr. Buzard understood at this time that employees could be fired for an arrest on drug charges, but he did not believe that he had been discharged. Mr. Wright told Mr. Buzard he could stay on administrative leave "as long as it took." Mr. Wright also told Mr. Buzard that after the criminal charges were dropped or if he prevailed in his criminal case, Mr. Wright would bring him back to work with full seniority and full benefits. When Mr. Buzard asked Mr. Wright why defendant had paid his accumulated vacation time, Mr. Wright responded that he thought Mr. Buzard might need it and that Mr. Buzard could take additional time off when he returned to work, if needed.
Defendant presents a differing account of Mr. Wright's agreement with Mr. Buzard. Consistent with Mr. Buzard's account, Mr. Wright also testified that a final meeting with Mr. Buzard took place prior to November 27, 1996. In that meeting, Mr. Buzard told Mr. Wright that he needed money. Mr. Wright then offered Mr. Buzard three options: (1) Mr. Buzard could resign and the defendant would not make any record of the circumstances leading to the resignation, and would provide him with a letter of recommendation; (2) Mr. Wright could fire Mr. Buzard pursuant to the substance abuse policy, or (3) Mr. Wright could terminate Mr. Buzard's employment, but record it as a layoff on company records so that Mr. Buzard could collect unemployment. Mr. Wright told Mr. Buzard that if he was found not guilty, Mr. Wright would consider bringing him back to work. Mr. Wright testified that Mr. Buzard wanted time to think about his options. Mr. Buzard called the next morning to tell Mr. Wright he wanted the layoff, under option number three, so that he could receive unemployment compensation.
Following Mr. Buzard's arrest in April 1996, the parties were engaged in negotiations for their 1997 contract. On more than one occasion during the negotiations, Mr. Wright referred to Mr. Buzard's status as an "administrative leave," rather than a "layoff." Also during the negotiations, the plaintiff proposed red-circling2 David Buzard's wages...
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