United Steelworkers of America v. Interpace Corp.

• Decision Date: 20 March 1978
• Docket Number: Civ. A. No. CA 77-1070.
• Citation: 447 F. Supp. 387
• Parties: UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC and Local 3125, United Steelworkers of America, Plaintiffs, v. INTERPACE CORPORATION, SHENANGO CHINA DIVISION, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

447 F. Supp. 387

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC and Local 3125, United Steelworkers of America, Plaintiffs, v. INTERPACE CORPORATION, SHENANGO CHINA DIVISION, Defendant.

Civ. A. No. CA 77-1070.

United States District Court, W. D. Pennsylvania.

March 20, 1978.

Rudolph L. Milasich, Jr., Pittsburgh, Pa., for plaintiffs.

Howard G. Estock, New York City, and Richard Catalano, Pittsburgh, Pa., for defendant.

OPINION

SNYDER, District Judge.

The issue before the Court is whether an arbitration award in a contract interpretation dispute requires this Court to enforce it by ordering wage payments to the grievants, to remand the case to the arbitrator for clarification on the issue of wage payments, or to dismiss the action on grounds that the dispute between the Union and the Company presents a new issue that should be resolved through the grievance procedure outlined in their Collective Bargaining Agreement.

I.

This dispute arose in August 1975, when the Defendant-Employer, Interpace Corporation (Company), without notice to the Plaintiff-Union, Local 3125 of the United Steelworkers of America (Union), instituted an incentive wage rate for those employees operating its English Roller Machine (Machine). This reduced the hourly wage rate paid to the Machine Operators, Pascarella and Micco, who, in turn, filed the following grievance (Exhibit B to Complaint):

"About eight years ago the English Roller Tool (Jiggering Machine) was put into operation. Mr. Pascarella a hand jigger operator replaced by the English Roller Tool was paid average rate up to 8-25-75. On 8-25-75 an Incentive Plan became effective. The plan did not earn for Mr. Pascarella and presently does not earn for Mr. Micco the average straight time hourly earnings of prior six months period prior to the awarding of the job."

They based their claim for relief on Article XIX, Section 2 of the March 1974 Collective Bargaining Agreement, which both the Union and the Company concede was in force at the time (Complaint ¶ 5, Answer ¶ 1), which states:

"In the case of employees manning future mechanized operations whose average straight time hourly earnings exceed the day rate and/or incentive earnings for the new job, their average straight time hourly earnings for the six month period prior to the awarding of the job shall be paid. In case employees have been on their job less than six months, the time on their job shall be used to calculate the average hourly earnings.

In the case of machine operations which were established prior to November 9, 1956, the established system of payment presently in effect shall continue to be used."

Unable to resolve the grievance, the parties submitted the matter to an arbitrator, Dr. John W. May (Arbitrator), who sustained the grievance on grounds that the Company violated the contract by failing to notify the Union of the new incentive rate, and that installation of the Machine constituted a mechanization of an old job under Article XIX, Section 2. Under this ruling, the wage rate applicable was the "average straight time hourly earnings" for the six months preceding the "awarding" of their operator jobs. The Arbitrator, however, did not compute the amount of back-pay due the grievants under the award, and the Company and Union disagreed on when the "awarding" of the job for purposes of determining the backpay took place. The Company maintained that on the basis of past practice and a 1959 Agreement, the average earnings should be based on the six months immediately before the date when each employee first worked on the Machine (Budd Affidavit, Exhibit EE; Mannarino September 16, 1977 Affidavit, Exhibit 1). The Union contended that Pascarella's average should be computed for the six months preceding the initiation of the incentive plan and that Micco's average should be derived from the six months prior to his bid and permanent assignment to the Machine in April of 1976 (Budd Affidavit, Exhibit DD). The Arbitrator responded to requests that he clarify his award in a letter on July 17, 1977, which reads, in part, as follows:

"The request of the parties in an extension of the award rendered on 22 December 1976 and was not a part of the issue at the time of the hearing. It is not within the authority of the Arbitrator to compute the retroactivity as that is governed by the Contract and Supplemental Agreements.

* * * * * *

Now Company Exhibit 1 and Company Exhibit 2 have been incorporated in Article XIX and payment is computed on the employees average straight time hourly earnings for the six month period prior to the awarding of the job. Not on the basis of a temporary assignment or temporary transfer, but when he was assigned the job by bid or permanent transfer.

* * * * * *

A transfer to an operation is not to be interpreted as temporary, filling in, etc., but when that became his vested job. Paragraph four then states once this hourly rate is computed, it stays fixed during all subsequent periods. Micco bid in on the English Roller Tool in April 1976. His rate would then be computed for all time at the six month average straight time hourly earnings for the six months prior to his transfer in April 1976.

Thus, paragraph 4 Company Exhibit 2, dated February 16, 1959 states the rate is set on the assignment or bid and is then in place for all time subsequent thereto whether by bid or temporary assignment, but it does not state nor intend that if Micco worked the English Roller Tool in 1966 a couple days for the convenience of the Company that he is then forever subject to the 1966 rate.

* * * * * *

The complaint exists on an issue outside the hearing. The computation of the earnings was not at issue, but rather a violation of Article XIX on which I ruled. The computation now becomes a new issue between the parties.

Again, Article III Section 5 is not applicable; computation is to be done under Article XIX Section 2. As to the existence of a past practice, I recall nothing on the fact of setting a rate the first time an employee mans a machine and then being set forever. However, Company Exhibit 2 can only be interpreted the rate is set at the time he is transferred to the operation as his particular job.

* * * * * *

I regret the subsequent confusion, but I do insist a new issue has been raised by the parties." (Errors in original)

The Arbitrator also agreed to hold September 27, 1977 open for another hearing; but the Company's counsel, Thomas M. Budd, informed John F. Schano of the American Arbitration Association (AAA) that the Arbitrator had been asked only to clarify his award and that any disagreement on how to compute back-pay was a new issue to be dealt with by filing a new grievance (Mannarino Affidavit, September 16, 1977, Exhibit 4). The Union's representative, Clarence Mannarino also wrote to Schano asking to go ahead with the September 27th hearing (Mannarino Affidavit, September 16, 1977, Exhibit 4). The Company responded by asking Schano to declare the Arbitrator functus officio (Mannarino Affidavit, Exhibit 4), which he did in a letter dated August 4, 1977, stating (Defendant's Answer, Exhibit 3):

"In the absence of the agreement of the Company for Arbitrator May to participate further in the captioned arbitration, the Arbitration Association must regard this matter as closed and the arbitrator as without further authority in this case."

On September 16, 1977, the Union filed the present action to enforce the Arbitrator's Award and to recover interest on the unpaid wages, attorney's fees and costs. The Union has also filed a Motion in the Alternative for Summary Judgment Enforcing Arbitration Award or for Remand for Arbitral Calculation of Amount of Wages Due. The Company has made a Motion for Summary Judgment in its favor, which will be denied, and a Motion for Attorney's Fees and Costs. The Union's Motion for Remand will be granted; all requests for attorney's fees and costs will be denied.

II.

One of the central tenents of national labor law and policy is that private arbitration is the favored method of settling grievances between organized workers and their employers; a court cannot over-rule the decision of an arbitrator simply because its interpretation of the collective bargaining agreement differs from his. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers v. Warrior & Gulf Navigation, 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); Gateway Coal Co. v. United Mineworkers of America, 414 U.S. 368, 94 S.Ct. 629, 38 L.Ed.2d 583 (1974); Napa Pittsburgh, Inc. v. Automotive Chauffeurs, Local 926, 502 F.2d 321 (3rd Cir.) (en banc), cert. den. 419 U.S. 1049, 95 S.Ct. 625, 42 L.Ed.2d 644 (1974). Absent fraud, bias or misconduct, an arbitrator's award that "draws its essence from the collective bargaining agreement" must be allowed to stand. Only when the award shows manifest disregard of the agreement, and is totally unsupported by principles of contract interpretation or the practices of the industry and the shop, can it be disturbed. United Steelworkers v. Warrior & Gulf Navigation, supra; Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123 (3rd Cir. 1969); Keystone P. Spec. Co., Inc. v. Scranton P. P. and A. U. No. 119, 386 F.Supp. 416 (M.D.Pa. 1974), aff'd, 3 Cir., 517 F.2d 1398 (1975).

In the instant case, the Union moves the Court to enforce the Award by ordering the Company to pay the Grievants back wages. An action for the enforcement of an arbitration award is proper under Section 301 of the National Labor Relations Act (29 U.S.C. § 185) providing that the award is final and binding under the collective bargaining agreement. Drivers Union v. Riss & Co., 372 U.S. 517, 83 S.Ct. 789, 9 L.Ed.2d 918 (1963). The difficulty here, however, is that there is no basis for determining how much Pascarella and...