White v. National Steel Corp.

• Decision Date: 30 August 1989
• Docket Number: Civ. No. 83-0059-W.
• Citation: 742 F. Supp. 312
• Court: U.S. District Court — Northern District of West Virginia
• Parties: Arthur Dale WHITE, et al. v. NATIONAL STEEL CORPORATION.

742 F. Supp. 312

Arthur Dale WHITE, et al. v. NATIONAL STEEL CORPORATION.

Civ. No. 83-0059-W.

United States District Court, N.D. West Virginia.

August 30, 1989.

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Henry C. Berns, William P. Bresnahan, Stanley J. Wolowski and Rothman, Gordon, Foreman and Goudine, P.A., Pittsburgh, Pa., for plaintiffs.

Carl N. Frankovitch, Carl H. Hellerstedt, Jr., John A. McCreary, Jr. and Volk, Frankovitch, Anetakis, Recht, Robertson & Hellerstedt, Pittsburgh, Pa., for defendant.

FRANK A. KAUFMAN, Senior District Judge.^*

Plaintiffs are sixty-two former employees of the Weirton Division of National Steel Corporation ("National") who have brought suit against National for breach of contract, fraud, and intentional infliction of emotional distress.¹ Each employee claims that he was offered the opportunity by National to move from a union position to a non-union management position, exempt under the Fair Labor Standards Act,² and accepted the promotion only after National representatives made certain express or implied promises. Plaintiffs contend they were each told that in the event of a management layoff or in the event one of them could not handle the management position, or did not like it, that employee could return to his prior hourly or non-exempt position. In addition, plaintiffs allege that each of them was promised that management layoffs would be based on an employee's company date seniority (i.e., his date of hire) as applied company-wide, rather than upon the "exempt" seniority date (i.e., the date of promotion to the management position).

At various times in 1982, each plaintiff was laid off based upon his management seniority date, and no plaintiff was permitted to return to his formerly-held union position. Plaintiffs assert that had they been permitted to return they would not have been laid off from the union positions based upon their company date seniority. Alternatively, they state that their layoffs would have been for shorter periods of time than occurred after their layoffs from exempt positions.

In addition to their breach of contract claims, plaintiffs assert that National's actions add up to fraudulent misrepresentations, and/or concealments designed to induce employees to accept management positions, and that, at the least, National committed a constructive fraud when it failed to notify plaintiffs that it was negotiating in 1980 with the bargaining units to prohibit the transfer of foremen and other employees promoted to management positions to their former union positions on the occasion of layoffs from management positions.

Plaintiffs have filed a partial motion for summary judgment with regard to liability in connection with their breach of contract and fraud claims. Defendants have also filed a full motion for summary judgment. Both parties also filed supplemental motions for summary judgment relating to certain plaintiffs who were unintentionally omitted from certain counts in the complaint. This Court held several hearings with counsel — in Baltimore, Pittsburgh, and over the telephone — during which it requested and subsequently received extensive supplemental briefing. This opinion finalizes and clarifies this Court's tentative holdings and findings during those hearings.³

The extensive allegations of the Second Amended Complaint, most of which are wide-ranging and detailed, are set forth in thirteen separate counts, each involving a different set of plaintiffs and distinct claims. The first four counts allege various breach of contract claims with respect to different groups of plaintiffs. In Count One certain plaintiffs assert:

70. In order to induce each of the aforesaid Plaintiffs to accept Defendant's offer to leave his hourly position and become employed as a salaried employee, Defendant, through its authorized agents, servants, or employees, made the following express and/or implied promises to each of the aforesaid Plaintiffs:

a. Future layoffs, terminations, and recalls specifically affecting each Plaintiff and pertaining to reduction and/or increase in the Defendant's work force would be determined upon the presently existing seniority rights acknowledged by Plaintiffs and Defendants, including "company-date seniority," which date was agreed upon as the date such Plaintiff commenced his initial hourly, rather than subsequent salaried employment with the Defendant;

b. Defendant would effectuate, apply, enforce, and maintain its promise to each Plaintiff that his "company date seniority" would be utilized as company-wide seniority, rather than departmental or job seniority;

c. Each Plaintiff would also have the option of returning to an hourly position in the event of future reductions in the Defendant's salaried work force based upon company date and company-wide seniority;

d. Defendant would ensure that each Plaintiff's acceptance of its offer of a salaried position would not result in any loss of company-wide seniority or otherwise jeopardize such Plaintiff's continued company-wide employment with Defendant;

e. Each Plaintiff would be laid off, terminated, and/or recalled in accordance with his seniority on a company date and company-wide seniority basis;

f. Defendant would deal fairly and act in good faith regarding all aspects of Plaintiff's employment;

g. Defendant would continue to employ Plaintiffs until mandatory retirement age unless Defendant had specific, just, and lawful cause to terminate Plaintiffs.

The actions giving rise to the alleged breaches are listed in Count One at paragraph 73:

73. On or about August 1, 1980, and thereafter Defendant breached its promise to Plaintiffs by unilaterally:

a. Amending each Plaintiff's existing seniority rights:

b. Reducing each Plaintiff's company date and company-wide seniority to salary date and salaried exempt seniority;

c. Failing to effectuate, apply, enforce, and maintain each Plaintiff's "company-date seniority" as company-wide seniority;

d. Rescinding each Plaintiff's right of option to return to an hourly position in the event of reduction in Defendant's salaried work force e. Jeopardizing each Plaintiff's continued company-wide employment;

f. Rescinding each Plaintiff's right to be laid off, terminated, and/or recalled in accordance with seniority on a company date and company-wide seniority basis;

g. Acting unfairly and in bad faith regarding aspects of each Plaintiff's employment, including but not limited to failing to provide various Plaintiffs reasonable prior or subsequent notice and opportunity to return to an hourly position;

h. Rescinding each Plaintiff's right to continued employment until retirement by reason of Defendant's aforementioned acts and conduct in "a" through "g."

Count One does not refer to any rights or obligations stemming from any collective bargaining agreement ("CBA"). However, as discussed infra, plaintiffs allege that their right to return to the hourly work force was obtained as an express or implied promise from National when each Count One plaintiff accepted a management position.

In Count Two, certain plaintiffs essentially reassert the same type of claims alleged in Count One by other plaintiffs, except that Count Two does not state allegations that National promised the Count Two plaintiffs that they had an option to return to an hourly position.

Count Three restates the Count One allegations regarding promises made to the Count Three plaintiffs, including the promise of a return option to the nonexempt salaried ranks.

Count Four reasserts essentially the allegations in Count One regarding the Count Four plaintiffs, and also asserts that National promised that hourly employees would not replace any Count Four plaintiff while any such plaintiff was laid off. There is no allegation in Count Four of a promise to return a Count Four plaintiff to the nonexempt salaried ranks in the event of a management layoff, since no Count Four plaintiff was ever employed as nonexempt personnel.

Count Five alleges fraudulent misrepresentations by National to most but not all of the plaintiffs. Count Five plaintiffs assert that National agents told them that they could always return to the bargaining units when, in fact, National's policy at the time of such statements was that plaintiffs had no right under any circumstances to return to the bargaining unit.

The Count Six plaintiffs also allege fraud on the part of National for its alleged failure to disclose that National's layoff policy did not list company time as the seniority determinant for management layoffs.

The plaintiffs in Counts Seven and Eight allege constructive fraud, specifically that National allegedly failed to notify these plaintiffs that it intended to negotiate a provision in the CBAs which would prohibit plaintiffs from returning to the bargaining units in the event of layoffs.

Count Nine alleges a breach of National's alleged promise that all management layoffs would be governed by company time.

Count Ten realleges the breach of contract claims in Counts One through Nine as independent torts.

Count Eleven alleges the tort of outrageous conduct and intentional, wanton infliction of harm.

Count Twelve alleges a claim of intentional infliction of emotional distress.

Count Thirteen alleges a claim for violation of a substantial public policy of West Virginia.

In this opinion, this Court addresses each of the legal issues present in this case in the context of the summary judgment motions filed by the parties and the teachings of Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A summary of the legal holdings and the disposition of the claims by each plaintiff in each count are set forth in an Order of even date with this opinion.

CONTRACT CLAIMS

National raises two affirmative defenses against plaintiffs' contract claims — that is, the claims...