Schultz v. Owens-Illinois Inc., OWENS-ILLINOIS
| Citation | 696 F.2d 505 |
| Decision Date | 22 December 1982 |
| Docket Number | No. 81-1104,I,No. 9,OWENS-ILLINOIS,9,81-1104 |
| Parties | 112 L.R.R.M. (BNA) 2181, 96 Lab.Cas. P 13,945 John SCHULTZ, et al., Plaintiffs-Appellants, v.INCORPORATED and Districtnternational Association of Machinists and Aerospace Workers, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Frank E. Wallemann, St. Louis, Mo., for plaintiffs-appellants.
R. Jeffrey Bixler, Owens-Illinois, Inc., Toledo, Ohio, C.E. Heiligenstein, Belleville, Ill., for defendants-appellees.
Before CUDAHY and COFFEY, Circuit Judges, and GRANT, * Senior District Judge.
In a prior appeal, this court held that plaintiffs could state a claim for relief under section 301(a) of the Labor-Management Relations Act of 1947 (the "LMRA"), 29 U.S.C. Sec. 185(a) (1976), for an alleged breach of the duty of fair representation by plaintiffs' union, District No. 9 of the Machinists' International Union (the "Union"). 1 We also found that there was such a potential claim under section 301(a) against plaintiffs' employer, Owens-Illinois, Inc. ("Owens"), based upon Owens' alleged breach of contract involving rights in an apprenticeship program. Schultz v. Owens-Illinois, Inc., 560 F.2d 849 (7th Cir.1977), cert. denied, 434 U.S. 1035, 98 S.Ct. 770, 54 L.Ed.2d 783 (1978) ("Schultz I "). Upon the remand of Schultz I, there was a jury trial, but the jury was unable to reach a verdict and a mistrial was declared. The court then granted the motions of the two defendants for a directed verdict. See Fed.R.Civ.P. 50(b). The district court relied on several grounds, including lack of evidence of a breach of the duty of fair representation by the Union and of a breach of contract by Owens, as well as failure by plaintiffs to file timely grievances and an absence of proof of damages. Plaintiffs appealed and we affirm the directed verdicts in favor of both defendants.
Although the opinion in Schultz I sets out much of the factual background of this case, see 560 F.2d at 851-53, we shall outline certain additional facts adduced at trial which we think relevant to the present issues.
Prior to certain 1971 collective bargaining sessions, both Owens and the Union interpreted a clause in their collective bargaining agreement establishing an Apprenticeship Training Program as requiring Owens to maintain a ratio of one apprentice for every eight journeymen machinists employed at Owens' plant in Godfrey, Illinois. The pertinent provision of this clause, which was not changed from 1968 to 1978, reads:
The normal ratio of apprentices shall be one (1) apprentice to every eight (8) journeymen in the department. Apprentices shall serve for a period of 8,000 hours in accordance with the Federal Apprenticeship Standard Agreement. (Emphasis supplied.) 2
Article 18 of the Federal Apprenticeship Standard Agreement covering the 1500 union shops encompassed within the Union's geographical jurisdiction, which is incorporated by reference in the collective bargaining agreement between the Union and Owens, provides in pertinent part that the
[r]atio of apprentices to journeymen shall be in conformity with present or subsequent bargaining agreements between the employer and District No. 9. If provision of an employer's bargaining agreement does not specifically cover the subject of ratio of apprentices to journeymen, then the following shall apply.
One (1) apprentice may be employed for each eight (8) journeymen.
During 1971, Owens became concerned about the number of journeymen machinists employed at the Godfrey plant and the high cost of maintaining a large number of employees in that classification. 3 In 1971, Owens had 200 journeymen out of a total work force of approximately 400-100 more journeymen than it could accommodate; this excess of journeymen apparently resulted from years of diligent adherence to the one-to-eight ratio prescribed in the apprenticeship program, combined with a low turnover rate. Consequently, many journeymen performed jobs requiring less than a journeyman's experience. But Owens was, of course, required to pay the higher journeymen's wage for such work.
To address the consequent inflated labor cost, Owens proposed to the Union during contract negotiations in 1971 that the language of the contract be changed so that the contract could not be interpreted to require Owens to maintain one apprentice for every eight journeymen (and as permitting Owens to reduce the number of entering apprentices). Owens submitted at least four proposals to the Union with regard to the apprenticeship ratio but the Union rejected each proposal. The Union did not want to change the contract language because similar language was used in numerous other collective bargaining agreements, and an alteration in the Union's contract with Owens would portend alterations in contracts with other employers. Nonetheless, the Union recognized the serious economic effect upon Owens of a strict application of the one-to-eight ratio. Therefore, the Union's chief bargaining representative and business agent, Wilbert Hemken, offered to contact the persons in charge of administering the apprenticeship program to determine whether Owens' concerns about the apparent mandatory nature of the apprenticeship ratio could be satisfied within the framework of the existing contract language.
Hemken approached Michael Harcourt, a representative of the Bureau of Apprenticeship and Training, United States Department of Labor, in November 1971, about the interpretation of this contract clause. Harcourt advised Hemken that the one-to-eight apprenticeship ratio clause contained in contracts bargained by the Union was discretionary and not mandatory; the ratio was to be applied by the employer, according to Harcourt, as adjusted to reflect its own needs for apprentices. Tr. at 783-87 (testimony of Mr. Harcourt). Hemken also contacted Fred Specman, Assistant Directing Business Representative for the Union's District No. 9, who supervised the negotiation and administration of more than 1500 labor contracts. Specman testified that the District No. 9 apprenticeship committee had informed Hemken that, of the more than 750 contracts containing comparable language, none was construed to impose on employers a mandatory apprentice-to-journeyman ratio. Tr. at 773, 776-78 (testimony of Mr. Specman). Hemken in turn reported this prevailing non-mandatory interpretation to the full Union negotiating committee at Owens' Godfrey plant. The committee then voted to accept this interpretation and to report its action to Owens. Tr. at 244 (testimony of Mr. Skelton). Based upon the understanding that the apprenticeship ratio was discretionary rather than mandatory, the Union negotiators and Owens agreed orally in November 1971 to leave the contract language unchanged.
A meeting of the Union membership at the Godfrey plant was held in December 1971 to ratify the proposed contract. Hemken testified at trial that he chaired this meeting and reported to the membership the interpretation of the existing apprenticeship clause agreed to by the Union negotiating committee and Owens. Tr. at 792. Several of the plaintiffs, on the other hand, testified that Hemken said nothing at the meeting about this new interpretation of the clause. However, each of the plaintiffs except one conceded on cross-examination that he could not recall whether the clause was ever discussed at the meeting. Tr. at 127 (testimony of Mr. Schultz), 164 (testimony of Mr. Baumann), 314 (testimony of Mr. Doran).
After the Union ratified the agreement reached in December 1971, Owens did not place any new apprentices in the apprenticeship program. At several of the monthly grievance meetings held in 1972, 1973 and 1974, the program, and the placing in it of new apprentices, were discussed. Both Owens' management and Hemken consistently maintained that the apprenticeship program had not been abandoned but that, pursuant to the oral understanding of November 1971, Owens could place new apprentices in the program on an "as needed" basis--and no new apprentices were currently needed. Although many of the plaintiffs became eligible (by virtue of seniority) for placement in the apprenticeship program during this period, no employees filed a grievance with the Union protesting Owens' failure to place them in the program.
The apprenticeship program was also an issue in 1974 during the next round of contract negotiations. The Union requested that the parties thoroughly review the existing apprenticeship program and asked that new apprentices be placed in the program. Although Owens agreed to discuss the program, its final and amended final offers to the Union retained the existing contract language. The Union rejected these final offers and called a strike. The main issues which apparently prompted the strike, however, were wages, insurance and pensions; indeed, some of the plaintiffs were not even aware that the apprenticeship program was an outstanding unresolved issue at the time of the strike. See, e.g., tr. at 523 (testimony of Mr. Coates), 539 (testimony of Mr. Warren). After seven weeks, the strike ended and a new collective bargaining agreement was ratified. This agreement retained the language of the existing apprenticeship clause.
Owens' interpretation of the contract clause relating to the apprentice-to-journeyman ratio as non-mandatory and Owens' failure to place new people in the apprenticeship program continued to be a cause of concern among some of the employees throughout 1974 and 1975. In April 1976, plaintiff John Schultz, an Owens employee, filed what was apparently the first formal grievance 4 involving the apprenticeship program. The grievance alleged that Owens breached the collective bargaining agreement by not maintaining a one-to-eight apprentice-to-journeyman ratio. Plaintiffs' App. at 30. By his own admission, Schultz had been qualified...
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