UNITED STEELWORKERS OF AMER. v. United States Gypsum Co.

• Decision Date: 31 July 1974
• Docket Number: No. 72-2694.,72-2694.
• Citation: 492 F.2d 713
• Parties: UNITED STEELWORKERS OF AMERICA, AFL-CIO, Plaintiff-Appellant-Cross Appellee, v. UNITED STATES GYPSUM COMPANY, Defendant-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

492 F.2d 713 (1974)

UNITED STEELWORKERS OF AMERICA, AFL-CIO, Plaintiff-Appellant-Cross Appellee, v. UNITED STATES GYPSUM COMPANY, Defendant-Appellee-Cross-Appellant.

No. 72-2694.

United States Court of Appeals, Fifth Circuit.

April 11, 1974.

Rehearing Denied July 31, 1974.

COPYRIGHT MATERIAL OMITTED

Jerome A. Cooper, Birmingham, Ala., Bernard Kleiman, Gen. Counsel, Chicago, Ill., Michael H. Gottesman, Jeffrey Gibbs, Washington, D. C., for plaintiff-appellant.

J. S. Gruggel, Jr., John J. Coleman, Jr., Birmingham, Ala., Harold D. Burgess, J. T. Otis, Chicago, Ill., for defendant-appellee.

Before BELL, INGRAHAM and RONEY, Circuit Judges.

INGRAHAM, Circuit Judge:

From court to arbitrator and back again, this § 301¹ case is here on an appeal by both parties from the district court's decision, 339 F.Supp. 302 (N.D. Ala., 1971), enforcing, modifying and setting aside portions of an arbitrator's award which followed our earlier decision ordering United States Gypsum Company to arbitrate the union's grievances pursuant to the collective bargaining agreement between the union and Gypsum's predecessor. United States Gypsum Company v. United Steelworkers of America, 384 F.2d 38 (5th Cir., 1967), cert. den. 389 U.S. 1042, 88 S.Ct. 783, 19 L.Ed.2d 832 (1968) (Gypsum I). Significant issues are raised concerning the power of an arbitrator to hold a so-called successor employer bound by substantive provisions of its predecessor's collective bargaining agreement, as well as the scope of an arbitrator's remedial authority once he has concluded that certain provisions are binding and have been violated.

I.

The factual background of this case is summarized in our previous opinion, and with somewhat more detail in the arbitrator's² 116 page opinion. We will borrow liberally from these sources to set out under one roof the facts underlying this extended litigation.

The genesis is February 1958, when the union was certified after an election as the exclusive bargaining representative of the production and maintenance employees of a lime plant in Montevallo, Alabama, owned at that time by United Cement Company, Inc. Collective bargaining agreements were entered into between the union and United for the years 1958-1961, 1961-1964, and 1964-1967, the latter agreement to run from March 30, 1964 until March 30, 1967. Approximately six months after the last agreement began, discussions ensued between United and Gypsum for sale of the plant. As is, or was at least, standard practice, no union representatives participated in the negotiations leading up to the sale.³ The union first learned of the proposed sale on March 19, 1965, when United posted a notice telling its employees that Gypsum would likely exercise an option to purchase the plant on April 1, 1965. Between March 22 and March 26, Gypsum interviewed United's employees, discussing employment prospects and the future operation of the plant. United closed the plant on March 28, terminating all employees effective that date. The transaction was completed on April 1, 1965.

Gypsum purchased all of the assets and property of United excluding cash, accounts receivable and certain contracts not here pertinent. Also excluded in the purchase agreement was the collective bargaining contract which still had two years remaining in its term. Gypsum subsequently hired all but three of United's former employees and began operating the plant on April 5. "Except that Gypsum did not check off union dues, determined seniority as of the date of employment with it, and by agreement installed a health insurance plan, the terms of employment were substantially the same as before the purchase. So too, was the physical operation — same work force, same plant, same process, same product (except for trade name), under the same supervisors." Gypsum I, supra, 384 F.2d at 41.

Although a union representative wrote a letter to Gypsum on March 29 and received a response saying the company would be glad to meet with the union, nothing significant happened until Gypsum failed to check off union dues for April. This precipitated a May 3rd letter from the union to the company inquiring into the matter; the company replied that it was not operating under the collective bargaining agreement.

The union thereafter prepared and submitted to the company the grievances which are the subject of this litigation. Steadfastly maintaining that the collective bargaining agreement was no longer in effect, Gypsum refused to arbitrate. Then, on June 11, the union began Gypsum I by filing suit in federal court under § 301 asking that Gypsum be compelled to arbitrate the union's grievances pursuant to the collective bargaining agreement. While this suit was pending, Gypsum began its counterattack before the National Labor Relations Board by filing a representation petition seeking to have the union decertified.⁴ Responding to this move, the union filed a charge with the board alleging that Gypsum had violated § 8(a)(5) of the Act, 29 U.S.C. § 158,⁵ by refusing to bargain with the union. Shortly thereafter, this charge was withdrawn.⁶

Gypsum lost before the board on the initial petition, 157 NLRB No. 60, but refiled several weeks later under the board's new standard.⁷ While this second petition was pending before the board, the district court ordered Gypsum to arbitration on the basis of the Supreme Court's decision in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). This was in May 1966 with ten months still remaining to the collective bargaining agreement. Gypsum appealed from this decision, but before the case was decided on appeal, the board ordered an election, 161 NLRB No. 61, pursuant to Gypsum's petition. The union lost the election and was formally decertified on December 2, 1966.

On appeal we affirmed the district court, holding "that the predecessor contract bound the Successor to arbitrate claims under it." Gypsum I, supra, 384 F.2d at 44. And in response to Gypsum's assertion that as a result of the decertification the union could no longer represent the employees, even before an arbitrator, the court reasoned that "compelling this limited post-decertification recognition by the employer of the repudiated representative is consistent with the policies sought to be achieved by the Act." Id. at 47. The court then considered and rejected Gypsum's arguments that the grievances were not arbitrable, essentially concluding that they did not go to the initial question of arbitrability, but were rather defenses to be raised before the arbitrator or to be considered by a court in its review of any enforcement proceedings. See United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); Textile Union Workers of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). Chief Judge Brown then sounded the familiar caveat that merely holding the grievances arbitrable was not "even a remote suggestion of how the merits are to, or must, be determined" and did not "begin to put an advance court imprimatur on the award." 384 F.2d at 49. Thus three years after the grievance report had been filed, two years after the district court had ordered arbitration, a year and one-half after the union's decertification, and a year after the collective bargaining agreement had expired, the following grievances went to the arbitrator in May 1968:

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

"2. The Company has filed vacancies such as burner helper without complying with Article VIII of the contract.

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

"4. The Company has refused to recognize seniority as established in Article VIII 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 February 1971 the arbitrator rendered his decision. Regarding grievances 1, 5 and 6 he held the collective bargaining agreement binding on Gypsum to the extent that the union was entitled to recognition as bargaining representative for the period between the take-over and the union's decertification, April 1, 1965 until December 2, 1966. Gypsum was therefore held to have violated the agreement by refusing to negotiate with the union pursuant to the wage reopener provision of the contract;⁸ the arbitrator reasoned that this dispute was inherent in grievances 1, 5 and 6. As a remedy for this violation he concluded that since negotiation this long after decertification (5 years) was impractical, Gypsum should be held liable for the wage increase it would have agreed to had negotiations occurred. He determined this amount to be 10 ¢ an hour. Gypsum was ordered to pay an amount calculated on a 10¢ per hour increment for the work period from April 1, 1966, the reopener date, until October 10, 1966, the date on which the company unilaterally granted a 6 ¢ per hour increase, and calculated on a 4¢ per hour increase from October 10, 1966 until the date of payment. Concerning holidays, which were also subject to negotiation under the reopener, the arbitrator decided that no changes would have been made and therefore awarded no relief in this regard.

Seniority issues were raised by grievances 2 and 4. After examining the practices prevalent prior to Gypsum's take-over, the arbitrator concluded both that they were not actively followed previously and that the proof was insufficient to establish a violation anyway.⁹ He therefore held for the company on these two grievances.

The...