Smith v. St. Regis Corp., 3:85-cv-140WS.

Decision Date31 March 1994
Docket NumberNo. 3:85-cv-140WS.,3:85-cv-140WS.
Citation850 F. Supp. 1296
PartiesDavid Douglas SMITH, III, et al., Plaintiffs, v. ST. REGIS CORPORATION; Georgia Pacific Inc.; United Paperworkers International Union; Local Union 371; Local Union 1369, Defendants.
CourtU.S. District Court — Southern District of Mississippi

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Dixon L. Pyles, Sr., Pyles & Tucker, Jackson, MS, for plaintiffs.

Herbert C. Ehrhardt, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, MS, for St. Regis Corp.

M. Curtiss McKee, Fuselier, Ott, McKee & Shivers, Jackson, MS, for Georgia-Pacific, Inc.

John L. Maxey, II, Steven Mark Wann, Maxey, Pigott, Wann & Begley, Jackson, MS, for United Paperworkers Intern. Union.

MEMORANDUM OPINION AND ORDER

WINGATE, District Judge.

Both the plaintiffs and the defendants herein have moved for summary judgment, respectively, pursuant to Rule 56(a) and (b) of the Federal Rules of Civil Procedure.1 Before the court are the claims of twenty-six (26) plaintiffs, former papermill production and maintenance employees of St. Regis Corporation (hereinafter "St. Regis") at St. Regis' facility in Monticello, Mississippi. Aggrieved over their non-selection as employees of Georgia-Pacific, Inc., (hereinafter "Georgia-Pacific"), after Georgia-Pacific purchased their paper mill from St. Regis, for whom each plaintiff had worked, the plaintiffs herein sue both Georgia-Pacific, Inc., and St. Regis Corporation, as well as plaintiffs' labor unions, the United Paperworkers International Union (hereinafter "UPIU"), and Locals 371 and 1369 of the UPIU (hereinafter "local unions"). Plaintiffs principally contend that the defendant employers breached a collective bargaining agreement, while the union defendants violated their statutory duty to represent fairly the plaintiffs.

Plaintiffs ask this court to order arbitration pursuant to the collective bargaining agreement entered into on January 14, 1984, between St. Regis and the plaintiffs' union representatives, UPIU and the local unions. Either through arbitration or trial before this court, the plaintiffs seek reinstatement and to be made whole for the losses they claim to have suffered as a result of their having been terminated. The major questions to be resolved by this court, say plaintiffs, are (1) whether Georgia-Pacific is the successor or alter ego of St. Regis and bound by the terms of the collective bargaining agreement, (2) whether Georgia-Pacific is compelled to proceed to arbitration with regard to the plaintiffs, and (3) whether the union defendants, UPIU and the local unions, are liable to the plaintiffs for unfair representation.

Plaintiffs bring this action pursuant to § 301 of the Labor Management Act, Title 29 U.S.C. § 185.2 This court's jurisdiction is predicated upon federal question, Title 28 U.S.C. § 1331.3 Plaintiffs contend that the defendants, St. Regis and Georgia-Pacific, are employers in an industry affecting commerce within the meaning of Title 29 U.S.C. § 142(1) and (3) and § 152. The union defendants, say plaintiffs, are representatives of employees in an industry affecting commerce as defined in Title 29 U.S.C. §§ 142(1), 152 and 185 and are recognized affiliates of the UPIU.

Plaintiffs also assert claims under state law claiming that the defendants have participated in a civil conspiracy to damage the plaintiffs' reputations and bring about termination of the plaintiffs' employment. Finally, plaintiffs assert additional state law claims of tortious interference with plaintiffs' contractual rights by false representations; defamation and disparagement; and intentional infliction of emotional distress.

Having studied the lengthy briefs of counsel, the submitted numerous documents, affidavits, and depositions, and having had on more than one occasion the benefit of oral argument of counsel, this court is persuaded to deny plaintiffs' motion for summary judgment, but to grant that of the defendants4 as to all of plaintiffs' claims.

PERTINENT FACTS

Plaintiffs claim that they are all residents of Mississippi. Prior to July 16, 1984, each was either a maintenance or a production worker with St. Regis. The parties agree that the UPIU and its local affiliates were the authorized bargaining representatives for maintenance and production workers employed at the paper mill in question which is located in Monticello, Mississippi, (hereinafter the "Monticello mill"); that a collective bargaining agreement between St. Regis, UPIU, and the respective union locals went into effect on January 14, 1984; and that this collective bargaining agreement by its terms was to remain in effect between the bargaining parties, St. Regis, the UPIU, and the local unions, until October of 1986.

Furthermore, the parties agree that St. Regis and Georgia-Pacific entered into negotiations for the sale of certain of St. Regis' assets to Georgia-Pacific in the spring of 1984. The parties also agree that following those negotiations St. Regis and Georgia-Pacific executed an assets purchase agreement on April 27, 1984, which transferred those assets from St. Regis to Georgia-Pacific on July 16, 1984. Among the assets sold by St. Regis to Georgia-Pacific was the Monticello mill.

According to the defendants, before Georgia-Pacific signed the asset purchase agreement with St. Regis, Georgia-Pacific decided that it did not wish to assume liability under any labor contracts which were in force at any of the St. Regis facilities subject to the asset purchase agreement. Furthermore, say defendants, Georgia-Pacific decided that it would not agree to continue the employment of any St. Regis personnel covered by the collective bargaining agreement of January 14, 1984. According to the defendants, Georgia-Pacific insisted that as a condition of the asset purchase agreement St. Regis terminate its hourly employees covered by the collective bargaining agreement and inform them of the procedures they should follow if they wished to become employed by Georgia-Pacific. This was done, say defendants, so that Georgia-Pacific could establish the initial terms and conditions of employment and negotiate new labor contracts at each facility purchased from St. Regis.

After the asset purchase agreement with Georgia-Pacific went into effect on April 27, 1984, defendants claim that St. Regis notified its hourly employees at the Monticello mill of the sale. Thereafter, say defendants, beginning in May, 1984, St. Regis' local management issued a series of notices apprising its employees, including the plaintiffs, about the status of the sale of assets to Georgia-Pacific and about the procedures Georgia-Pacific expected St. Regis' hourly employees to follow if they wished to be considered for employment with Georgia-Pacific. Union representatives, say defendants, were also informed of the purchase of the Monticello mill at this time.

On or about June 15, 1984, say defendants, Georgia-Pacific officials had a meeting with the local UPIU representatives at which time the union representatives were informed that the takeover date would be July 16, 1984. The UPIU and the local unions were told that Georgia-Pacific would not recognize the collective bargaining agreement in effect from January 14, 1984. However, say defendants, Georgia-Pacific made clear that it would recognize the UPIU and the local unions as the bargaining representatives for hourly workers at the Monticello mill. Hence, conclude defendants, Georgia-Pacific made no attempt to circumvent or undermine union representation at the Monticello mill.

Georgia-Pacific and the UPIU executed a written "effects of sale" agreement wherein Georgia-Pacific made official its intent to recognize the UPIU as the bargaining agent for hourly workers at a Georgia-Pacific controlled Monticello mill. Additionally, say defendants, Georgia-Pacific agreed that there would be no hiatus or temporary close-down of the Monticello mill after April 27, 1984. In return for Georgia-Pacific's recognition of the UPIU and the local unions and the assurance that the Monticello mill would continue operations, the UPIU and the local unions agreed that Georgia-Pacific was not a successor of St. Regis bound by any preexisting collective bargaining agreement.

Then, on July 12, 1984, say defendants, St. Regis notified its hourly employees, including the plaintiffs, that their employment with St. Regis at the Monticello mill would terminate effective July 16, 1984. According to the defendants, all hourly employees at the Monticello mill were notified through their union representatives in May of 1984, orally, in writing, and through subsequent communications, particularly a notice posted on all mill bulletin boards, on July 12, 1984, that all hourly employees' employment with St. Regis would terminate effective July 16, 1984. Additionally, according to defendants, all hourly employees were told by their union representatives prior to the July 12, 1984, notice that the January 14, 1984, collective bargaining agreement with St. Regis would terminate as of July 16, 1984. Furthermore, say defendants, plaintiffs were told that the UPIU and the local unions would have to negotiate a new contract with Georgia-Pacific and that Georgia-Pacific was going to hire its hourly employees based upon its own job-related criteria — namely, attendance, job performance, safety, and a medical examination.

The parties agree that after the asset purchase agreement went into effect on April 27, 1984, Georgia-Pacific sent an advance team of four persons, including industrial relations specialists, to the Monticello mill. This was done several weeks before the scheduled assets purchase closing date of July 16, 1984, in order to begin preparations for initial staffing of the Monticello mill under the auspices of Georgia-Pacific. According to the defendants, pursuant to the recommendations of the advance team, all former St. Regis...

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