W.R. Grace and Co. v. Local Union No. 759, Inter'l Union of United Rubber, Cork, Linoleum and Plastic Workers of America

• Decision Date: 10 August 1981
• Docket Number: No. 80-3661,80-3661
• Citation: 652 F.2d 1248
• Parties: 107 L.R.R.M. (BNA) 3251, 26 Fair Empl.Prac.Cas. 713, 26 Empl. Prac. Dec. P 32,024, 92 Lab.Cas. P 12,947 W. R. GRACE AND COMPANY, Plaintiff-Appellee, v. LOCAL UNION NO. 759, INTERNATIONAL UNION OF the UNITED RUBBER, CORK, LINOLEUM AND PLASTIC WORKERS OF AMERICA, Defendant-Appellant. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1248

652 F.2d 1248

107 L.R.R.M. (BNA) 3251, 26 Fair Empl.Prac.Cas. 713,

26 Empl. Prac. Dec. P 32,024, 92 Lab.Cas. P 12,947

W. R. GRACE AND COMPANY, Plaintiff-Appellee, v. LOCAL UNION NO. 759, INTERNATIONAL UNION OF the UNITED RUBBER, CORK, LINOLEUM AND PLASTIC WORKERS OF AMERICA, Defendant-Appellant.

No. 80-3661.

United States Court of Appeals, Fifth Circuit.

Unit A

Aug. 10, 1981.

Cupit & Maxey, Danny E. Cupit, Robert W. Sneed, Jackson, Miss., for defendant-appellant.

Ogletree, Deakins, Nash, Smoak, Stewart & Edwards, Peter G. Nash, Dixie L. Atwater, Washington, D. C., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before CHARLES CLARK, TATE and WILLIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

This case involves an appeal from a summary judgment granted by the district court setting aside a labor arbitration award in favor of defendant union and enjoining the union from further pursuing similar claims through the grievance procedure. This simple statement of the immediate issue before the Court, however, rests upon an Equal Employment Opportunity Commission determination of racial and sex discrimination, a conciliation agreement with EEOC, an arbitration award prior to the one here challenged, a prior decision of the district court, and a prior decision of this Court. The scene of the development of this industrial relations imbroglio is the plant of the Southbridge Plastics Division of W. R. Grace & Company, in Corinth, Mississippi. At all times involved in the events of this case, defendant union, Local No. 759 of the International Union of United Rubber, Cork, Linoleum and Plastics Workers of America was the certified bargaining representative at the Corinth plant for the employees involved.

In 1972, two black male employees filed a charge against the company with the Equal Employment Opportunity Commission, claiming that the failure to promote them was with racially discriminatory motive. The EEOC made a thorough investigation In its investigation the EEOC also determined that the company had been discriminating against women in its employment practices. Its entire cadre of female employees was clerical, and the EEOC found that there had been discrimination in not giving women opportunity to work in the operating or production phase of the business. As the result of the EEOC investigation, in 1974 the company and the Commission signed a conciliation agreement under which the company agreed to cease its discriminatory practices. A further part of the agreement contained a provision that its terms would override the seniority provisions of the collective bargaining agreement between the parties. The reason underlying this provision of the conciliation agreement, of course, was the conclusion that there having been discrimination in the past, this discrimination would be perpetuated if the company strictly followed contract seniority. Those who had been discriminated against in the past would have lower job and departmental seniority.

of the conditions at the plant. It concluded that there had been racial discrimination as to some employees and remedies were agreed upon. At this point, we drop the issue of racial discrimination entirely from the case.

While the union knew that such an agreement was being developed, it did not participate in the negotiations. Nor did it sign the agreement or approve it in any way, although it was given the opportunity to do so.

Shortly after the conciliation agreement was signed and the company began to follow it, the union instituted grievance proceedings to establish the seniority rights of male employees who had been laid off while female employees junior to them had been retained in operator positions. The union having insisted that these grievances go to arbitration, the company brought suit in the United States District Court under § 301(a) Labor Management Relations Act, 1947, 29 U.S.C. § 185(a), seeking to enjoin the union from arbitrating grievances where the relief sought in arbitration would conflict with the terms of the conciliation agreement the company had entered into with the EEOC. The EEOC also counterclaimed and crossclaimed against the company and the union seeking a declaratory judgment that the provisions of the conciliation agreement superseded the seniority provisions of the collective bargaining agreement.

In November 1975, the district court held that the conciliation agreement was binding on the company and the union and superseded any conflicting provisions in the labor agreement. It enjoined the arbitrations requested by the union. It rendered a declaratory judgment that the conciliation agreement was binding on all parties to the action and that the seniority provisions of the collective bargaining agreement were in conflict with the conciliation agreement. Southbridge Plastics Division v. Local No. 759, 403 F.Supp. 1183 (M.D.Miss.1975). The union appealed to this Court.

While the union's appeal was pending, the United States Supreme Court decided International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977). In that case the government had brought suit claiming the employer and the union were engaging in racial discrimination. The government urged the theory, which the EEOC used in this case, that the seniority system in the collective agreement had to yield to the corrective action necessary to eliminate the effects of discriminatory employment practices. The United States Supreme Court found, however, that the seniority systems involved were "bona fide" and, therefore, were specifically protected by § 703(h) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(h). The Court asserted at p. 350 of its opinion that the legislative history is clear: Title VII was to have no effect on "established seniority rights." Its effect was to be "prospective" only. The Court conceded that a seniority system could tend to perpetuate the effects of discrimination. But the Court held, nevertheless, that the statute protects "bona fide" seniority systems so long as they do not fall within the proviso which prohibits differences When the appeal of the union in the principal case came on to be heard before this Court, we reversed the district court's decision, relying at least in part upon the Supreme Court's decision in the Teamsters case. Southbridge Plastics Div. v. Local No. 759, Etc., 565 F.2d 913 (5th Cir.1978). We also made reference to Trans World Airlines v. Hardison, 432 U.S. 63, 97 S.Ct. 2264, 53 L.Ed.2d 113 (1977), which had followed the Teamsters case and had held that a discriminatory purpose must be shown before a seniority system can be found not to be bona fide. ¹ At p. 916 we said: "(W)holesale destruction of this (seniority) system as authorized by the conciliation agreement cannot be permitted." We concluded by granting the union's counterclaim "seeking arbitration of all grievances arising out of the Company's breach, through its employment of the conciliation agreement, of the seniority provisions contained in the agreement." p. 917.

in treatment of employees which are the result of "an intention to discriminate." The Court specifically held: "(T)he union's conduct in agreeing to and maintaining the (seniority) system did not violate Title VII." p. 356. The Court directed the district court to vacate the injunction against the union.

The company, which had been operating in accordance with the district court's order by following the conciliation agreement rather than the seniority provisions of the collective bargaining agreement, immediately changed its policy in response to the decision of this Court. It began again to follow the bargained seniority plan in the contract.

Our holding, as set out above, had directed arbitration of the grievances filed by the union protesting the company following the conciliation agreement over the seniority provisions of the contract. One such case was submitted to arbitrator Anthony J. Sabella. It involved a male operator who had been reduced in grade and later laid off while junior female operators were retained. Arbitrator Sabella held in favor of the company. His entire opinion insofar as it states his reasoning for his award is as follows:

Unquestionably in the period of the violation the Employer was acting in concurrence with the District Court's order, as it was required to do. There is no evidence that the Employer was not acting in good faith in accordance with a legal court order. The Employer could not anticipate nor was it required to anticipate the Circuit's reversal. It would be inequitable and manifestly unfair to penalize the Employer under these circumstances.

The union, however, continued to process grievances involving the same issue. The company went along with the union and submitted some of those grievances to arbitrator Gerald A. Barrett, asserting its claim that the Sabella award involving the same issue was controlling. Arbitrator Barrett upheld the union's grievances. The company then brought this suit to set aside the Barrett award and enjoin pursuit of further similar grievances. § 301 LMRA, 29 U.S.C. § 185(a).

We reverse the district court and render summary judgment for defendant union enforcing the Barrett arbitration award.

THE POWER OF THE SECOND ARBITRATOR

The precise issue before this Court is whether the second arbitration involving the same factual situation, the Barrett award, should be set aside as invalid. This question, however, turns in large measure on whether the earlier Sabella award which yielded a contrary result was itself valid. In general, it is established that an arbitrator will follow a prior award on controlling facts under the same contract. Local 103, Int'l U. of Electrical, Radio and Machine Arbitrator Barrett in his award recognized this principle. But it is also established that if...