United Steelworkers of Am. v. United States Gypsum Co.

• Decision Date: 21 February 1972
• Docket Number: Civ. A. No. 71-248-S.
• Citation: 339 F. Supp. 302
• Parties: UNITED STEELWORKERS OF AMERICA AFL-CIO, an unincorporated association, Plaintiff, v. UNITED STATES GYPSUM COMPANY, a corporation, Defendant.
• Court: U.S. District Court — Northern District of Alabama

339 F. Supp. 302

UNITED STEELWORKERS OF AMERICA AFL-CIO, an unincorporated association, Plaintiff, v. UNITED STATES GYPSUM COMPANY, a corporation, Defendant.

Civ. A. No. 71-248-S.

United States District Court, N. D. Alabama, S. D.

February 21, 1972.

Jerome Cooper, Cooper, Mitch & Crawford, Birmingham, Ala., for plaintiff.

Harold D. Burgess, Price, Cushman, Keck & Mahin, Chicago, Ill., John J. Coleman, Jr., Bradley, Arant, Rose & White, Birmingham, Ala., for defendant.

MEMORANDUM OF OPINION

POINTER, District Judge.

Plaintiff union brings this action under 29 U.S.C. § 185 and 28 U.S.C. § 2201 to enforce the award of an arbitrator selected by the parties following a court order to arbitrate. See 384 F.2d 38 (5th Cir. 1967), cert. denied, 389 U.S. 1042, 88 S.Ct. 783, 19 L.Ed.2d 832 (1968).

On April 1, 1965, defendant company acquired from United Cement Company, Inc., a lime plant at Montevallo, Alabama, under circumstances that, in the opinion of this court and the Court of Appeals, bound defendant to arbitrate claims arising under a three-year collective bargaining contract executed twelve months previously by the union and United Cement. This contract included provisions not only for arbitration but also for check-off of union dues and for re-opening negotiations for the third year regarding a wage increase and paid holidays.

The grievance ordered to be arbitrated was that presented to defendant by the union on May 17, 1965, which in pertinent part read as follows:

"1. The Company refuses to recognize and comply with the contract executed on March 30, 1964.

* * * * * *

"3. The Company has failed and refused to deduct union dues in accordance with Article VI of the contract.

* * * * * *

"5. The Company has announced that it is not bound by said contract.

"6. The Company has refused to recognize or deal with the duly authorized officers and representatives of the Union."

In affirming the order compelling arbitration of these issues — hardly of the classic variety — the Court of Appeals warned of the possibility of non-enforcement of the ultimate award, concluding that "whether the decision or the remedy prescribed is, or is not, supportable is for another day." 384 F.2d at 49. This caveat has particular significance since at the time of the appellate order the union had been decertified as bargaining representative and the collective bargaining agreement had expired.

On May 21, 1968, evidence was presented to the arbitrator and the grievance taken under submission by him. On February 28, 1971, in a lengthy opinion (116 pages), the arbitrator rendered his award. The parts of the opinion pertinent to this litigation¹ may be summarized as follows:

(1) The collective bargaining agreement was held to be binding on the defendant, and the union was held entitled to recognition as bargaining representative for the period from defendant's takeover (April 1, 1965) to its decertification (December 2, 1966). Defendant was held to have violated the agreement by refusing to negotiate with the union during this period under the reopener provision for wage increases and holiday benefits, a dispute held by the arbitrator as properly before him as being inherent in issues 1, 5 and 6. To require negotiation at the time of the award (long after decertification) was considered impractical. He concluded that an appropriate remedy was to hold the defendant to what (in his opinion) it would likely have agreed upon had negotiations been carried on — a figure which he determined to be $.10 per hour. He ordered defendant to pay an amount calculated on a $.10 per hour increment for work period from April 1, 1966 (the reopener date) to October 10, 1966 (the date on which defendant "unilaterally" granted a $.06 per hour increase), and calculated on a $.04 per hour increment for work periods from October 10, 1966, to the date of payment. No "corrective" action was ordered regarding the defendant's "unilateral" conversion in December 1966 of the six holidays to a paid holiday status.

(2) Check-off authorizations for union dues previously given to United Cement were, under all circumstances, held binding on the defendant. Defendant's objections — that it never received the cards from Union Cement; that the cards, naming Union Cement as employer and purporting to be irrevocable for 13 months, were invalid under 29 U.S.C.A. § 186(c) (4); and that check-offs were invalid under Alabama law — were rejected by the arbitrator as "afterthoughts", his conclusion being that the real reason for the defendant's action lay in its disavowal of the union's status and of any viability in the collective bargaining agreement. He ordered payment to the union of an amount equal to that which should have been checked off from April 1, 1965, to December 2, 1966. He further ordered that this expense be borne by the company without recovery from the wages of the employees, his rationale being that company action had prevented the union from rendering the full services for which dues would have been paid and that inequitable treatment could arise due to difficulties concerning persons no longer on the payroll.

(3) He determined that 6% interest, compounded quarterly, should be paid by defendant on the check-off award from April 1, 1966, to date of payment, and that interest similarly computed should be paid by defendant on the wage increment to the date of payment.

(4) He provided that the wage increment award, with interest, be paid by the company to the union and then distributed by it to the employees, so that the union "should now be given a chance to tell its story for the purpose, if such be its purpose, of once again organizing the plant."

(5) He declined, though, "sorely tempted," to award the union its attorney's fees and other costs, concluding that such would be beyond his authority under the contract.

Upon defendant's refusal to comply with the arbitrator's award, this suit was instituted by the union for its enforcement and for attorneys' fees and costs. The cause was submitted to the court on October 18, 1971, and briefs followed.

I. WILEY — H. K. PORTER PRINCIPLES

In appropriate circumstances a "successor" employer may be bound to arbitrate disputes arising under a collective bargaining agreement to which it was not a party and which it did not assume. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). Yet, acting under the same act of Congress that authorizes courts to compel such arbitration, the NLRB "is without power to compel a company or a union to agree to any substantive contractual provision of a collective-bargaining agreement." H. K. Porter Co. v. NLRB, 397 U.S. 99, 102, 90 S.Ct. 821, 823, 25 L.Ed.2d 146 (1970).

Underlying the present litigation is a conflict between the parties as to the extent to which a successor bound under Wiley to arbitrate can be bound, consistent with the teaching of H. K. Porter, to the other terms of that contract which it did not make. Two circuits have recently held that the successor cannot be forced to accept the provisions of its predecessor's agreement.² A different conclusion is here reached — the court concluding that principles implicit in Wiley and in the Fifth Circuit's opinion³ in the action brought to compel the arbitration here in question require a conclusion that the defendant became bound by the terms of the outstanding agreement, and not merely those provisions relating to arbitration.

The disputes ordered to arbitration in Wiley were not merely — if indeed any were — ones that had arisen under the agreement prior to the change of employers. Referring to those that arose after the change (but within the period of the agreement), Mr. Justice Harlan for a unanimous court stated: "Claimed rights during the term of the agreement, at least, are unquestionably within the arbitration clause." 376 U. S. at 554, 84 S.Ct. at 917. In the present case all of the disputes were based on actions of the defendant, and hence after its acquisition. In affirming the holding that "the predecessor contract bound the Successor to arbitrate claims under it", the Circuit Court clearly concluded that the defendant was bound by the terms of Union Cement's agreement and that only an overturning of Wiley could produce a different result. It is difficult to perceive how a successor employer could be required to arbitrate claims arising on account of conduct after its takeover in alleged violation of the agreement without, of necessity, holding that it was bound by the terms of such agreement.

This court is under a duty to reconcile H. K. Porter with Wiley if reasonably possible to do so. There is no difficulty in so doing. Wiley did not purport to authorize outside agencies such as arbitrators, NLRB, or courts to write a new contract governing relations in an industrial community. Rather it held that a new entrant to that community can, for policy reasons, be bound to an existing contract for that community notwithstanding its lack of consent thereto. In H. K. Porter however the question was writing a new contract, rather than determining who was bound by an existing one.⁴ In short, H. K. Porter need not be taken as a repudiation of Wiley.

II. WAGE RE-OPENER

With this preface it is now appropriate to turn to the arbitrator's decision regarding issues 1, 5 and 6, under which he awarded a wage increase under the reopener provision of the agreement. Under the principles just stated, the defendant was bound — as in like manner United Cement had been bound — to the following provision of the March 30, 1964, agreement:

"In connection with the third year of the contract, it has been agreed that the contract may be re-opened only for the negotiation of a wage increase and paid holidays as a fringe issue. Any notices to re-open contract for either or both of these two issues during the third year are to be given in the same manner as required by law to negotiate a new

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