Williams v. Wheeling Steel Corporation

• Decision Date: 13 April 1967
• Docket Number: No. 1061-W.,1061-W.
• Citation: 266 F. Supp. 651
• Parties: W. H. WILLIAMS et al., Plaintiffs, v. WHEELING STEEL CORPORATION, etc., Defendant.
• Court: U.S. District Court — Northern District of West Virginia

266 F. Supp. 651

W. H. WILLIAMS et al., Plaintiffs, v. WHEELING STEEL CORPORATION, etc., Defendant.

No. 1061-W.

United States District Court N. D. West Virginia.

April 13, 1967.

Gilbert S. Bachmann, Melvin W. Kahle, Wheeling, W. Va., James A. Ashton, Pittsburgh, Pa., for plaintiffs.

Thomas B. Miller, Schmidt, Laas, Schrader & Miller, Burr A. Horn, Jr., Gen. Counsel, Wheeling Steel Corp., Wheeling, W. Va., for defendant.

James P. Clowes, Wheeling, for United Steel Workers of America, as amicus curiae.

MAXWELL, Chief Judge.

This suit, purporting to be a class action, was brought by a number of former employees of the Wheeling Steel Corporation against their employer.¹ The defendant, Wheeling Steel Corporation, has filed a motion to dismiss the plaintiffs' action for failure to state a claim upon which relief could be granted. This motion was made pursuant to Rule 12(b) (6) of the Federal Rules of Civil Procedure. Thus, it is within the narrow procedural framework of this motion that the Court now considers the claims of these plaintiffs.

The plaintiffs allege, and the record at this juncture does not contradict the allegation, that they were members in good standing of the union which represented them during the events which lead to this controversy. The union, the United Steelworkers of America (hereinafter Steelworkers), was originally a party defendant in this suit but was dismissed with prejudice by an order entered on October 22, 1962. The plaintiffs, at that time, made no objection to the dismissal of the Steelworkers.

The plaintiffs set forth the factual background of their alleged cause of action in paragraphs 9 and 10 of their amended complaint, filed with this Court on November 1, 1962.

"On or about March 5, 1956, defendant, Wheeling Steel Corporation, announced and represented to its employees that one of their plants, namely the Wheeling Factory located in the City of Wheeling, West Virginia, was to close. Simultaneously with the aforesaid action of the Wheeling Steel Corporation, said corporation did announce to all employees of the Wheeling Factory that they would be required to make a final and irrevocable choice of one of the following options:

(a) Interplant transfer option, or

(b) Pension option for those who may be eligible, or

(c) Severance pay option for those who may be eligible,

and each employee was required within five (5) days following the contact to make known his or her choice of option on a form to be signed by the employee.

"Plaintiffs allege and aver that the representations of the defendant, Wheeling Steel Corporation, that said plant would close, was false and fraudulent and/or a material misrepresentation of fact; that in fact, said plant did not close and was still operating as late as 1962 and continued in active operation from the 5th day of March 1956 until the early part of January 1961."

The amended complaint goes on to specify some five categories into which the plaintiffs, and those whom they claim to represent, allegedly fall. Without attempting to delineate with precision the bounds of plaintiffs' categories, each of the wrongs alleged flows from the three options which the plaintiffs were given on March 5, 1956.

In essence, the plaintiffs contend that they were denied their contractual rights to continued employment from the time that they were actually laid off until the time that they would have been laid off if the contractual provisions covering the "phasing out" of the Wheeling Factory had been followed.

There are two collective bargaining agreements between Wheeling Steel and the Steelworkers which cover the employment status of the plaintiffs. The first of these contracts is the "1954 Agreement" which covered all of the employees of Wheeling Steel. This agreement is of little importance here, except that it outlines the grievance adjustment procedure.²

The Court assumes, and has not been advised to the contrary, that the arbitration provisions of the 1954 Agreement are applicable to the Supplemental Agreement of 1956. However, if the arbitration provisions did not apply there would be no question that the plaintiffs here could maintain their suit. Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246.

The second, and more important, contract which is applicable here is the "Agreement of April 24, 1956," which sets out in detail the procedure to be followed in the "phasing out" of the Wheeling Factory. Here, Wheeling Steel and the Steelworkers spelled out the options, and the ramifications thereof, which were to be afforded the employees of the Wheeling Factory in light of the anticipated closing of that facility. This agreement, in the section dealing with the Inter-Plant Transfer Option, provides that these employees shall continue to retain Wheeling Factory seniority for certain limited purposes. Section I(A) D (c)1 provides in part:

"If such employee should be laid off from the plant to which transferred, he may use his Wheeling Factory Plant seniority or Unit seniority for the purpose of obtaining work at Wheeling Factory by displacing another employee of such Certified Collective Bargaining Unit junior to him in Wheeling Factory seniority."

This provision seems to indicate that transferred employees could have returned to the Wheeling Factory provided that certain special conditions were met, i. e., the retention of plant or unit seniority sufficient to displace an individual who was working at the Wheeling Factory.

The provisions of the 1956 Agreement dealing with those employees who elected the pension or severance pay options do not contain a similar clause.

At this point, the issue before the Court is not the merits of the plaintiffs' claims but, rather, the question of whether their amended complaint states a valid cause of action.

It is, of course, well-settled that where, as here, the contract covering the employment status of the company's employees contains an exclusive arbitration clause, the employees must at least attempt to exhaust the grievance and arbitration procedures established by the collective bargaining agreement. Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580. This is grounded on the idea that since the employee's claim arises from the...