Woody v. Sterling Aluminum Products, Incorporated

• Decision Date: 11 October 1966
• Docket Number: No. 18083.,18083.
• Parties: John WOODY et al., Appellants, v. STERLING ALUMINUM PRODUCTS, INCORPORATED, a Missouri Corporation, International Association of Machinists, District No. 9, International Association of Machinists, Local Lodge 41 of the International Association of Machinists, Larry Connors, Directing Business Representative, District No. 9, I. A. of M., Russell Davis, Business Representative, District No. 9, I. A. of M., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

365 F.2d 448 (1966)

John WOODY et al., Appellants, v. STERLING ALUMINUM PRODUCTS, INCORPORATED, a Missouri Corporation, International Association of Machinists, District No. 9, International Association of Machinists, Local Lodge 41 of the International Association of Machinists, Larry Connors, Directing Business Representative, District No. 9, I. A. of M., Russell Davis, Business Representative, District No. 9, I. A. of M., Appellees.

No. 18083.

United States Court of Appeals Eighth Circuit.

September 2, 1966.

Rehearing Denied October 11, 1966.

COPYRIGHT MATERIAL OMITTED

Jerome J. Duff, St. Louis, Mo., for appellants.

Daniel Bartlett, Sr., of Bartlett, Stix & Bartlett, St. Louis, Mo., for appellee Sterling Aluminum Products Inc.; William Stix and Daniel Bartlett, Jr., of Bartlett, Stix & Bartlett, St. Louis, Mo., on the brief.

Donald S. Siegel, of Bartley, Siegel & Bartley, Clayton, Mo., for appellee Unions & Union Representatives; Malcolm L. Bartley and William H. Bartley, of Bartley, Siegel & Bartley, Clayton, Mo., on the brief.

Before VAN OOSTERHOUT and MEHAFFY, Circuit Judges, and VAN PELT, District Judge.

MEHAFFY, Circuit Judge.

Plaintiffs, one hundred ninety-three former machinist employees of Sterling Aluminum Products, Incorporated (Sterling), at Sterling's St. Charles, Missouri plant, have appealed from a judgment of the United States District Court for the Eastern District of Missouri dismissing their complaint against Sterling, plaintiffs' local bargaining unit (Union), the international and individual union representatives.¹ Plaintiffs sought millions of dollars in damages for breaches by Sterling of a collective bargaining agreement, alleged to have been collusively negotiated by Sterling and plaintiffs' exclusive bargaining agent, District No. 9. Some two years after the St. Charles plant was closed, plaintiffs by amendment sought enforcement of the grievance procedure contained in the collective bargaining agreement.

There are two published opinions of the District Court. In the first opinion, dealing with the original and first amended complaint, the District Court entered summary judgment for Sterling on Count III and dismissed the other three counts upon motion.² 244 F.Supp. 84 (E.D.Mo.1965). Thereafter, however, by nunc pro tunc order entered January 26, 1965 plaintiffs were granted the right to file what is hereafter referred to as the second amended complaint.

This second amended complaint contained six counts and resulted in a decision adverse to plaintiffs on all counts. 243 F.Supp. 755 (E.D.Mo.1965). Both opinions deal exhaustively with the facts and legal issues, so we summarize as briefly as possible in a case made complex and annoyingly difficult because of the garbled overlapping and contradictory allegations of the pleadings.

In 1961, in settlement of a five-month strike at Sterling's St. Charles plant, the Union and Sterling negotiated a two-year contract to terminate February 28, 1963. A major issue involved severance pay and a chief topic of discussion was the possibility that Sterling might move its production from St. Charles, Missouri. Initially, Sterling adamantly refused to consider any such provision because it had been concluded due to many factors that the St. Charles operation could no longer be profitably maintained. However, the negotiated contract contained an express provision recognizing Sterling's right to permanently close the St. Charles plant at any time during the contract term or to permanently discontinue all or part of any department and terminate the involved employees.³

The contract called for termination allowances for the employees scaled to their length of service but to be effective only if the St. Charles operations were relocated during the life of the contract. Sterling was relieved of its obligation to pay the seniority termination allowance if the plant closure or department phase-out occurred after the expiration of the two-year contract.⁴

On December 26, 1962, Sterling, by mail, notified the Union that the St. Charles plant would be permanently closed on the expiration date of the contract, February 28, 1963. The Union agreed to terminate the agreement and offered proposed amendments to which Sterling reiterated the permanent closing of the plant but expressed a willingness to discuss current contract matters before termination on February 28. The Union was also advised that since it did not represent Sterling employees at other plants and since no workers would be employed at St. Charles, the negotiation of a new contract would be unnecessary.

On February 27, 1963, employees were officially notified that the plant would be permanently closed at the end of the day, February 28, and that all employees would be terminated at that time. Employees were not to report to work February 28 but would be compensated for that day.

For several months prior to closure of the St. Charles plant, it was common knowledge that operations would be moved to Malden, Missouri and that Sterling had leased production facilities in Malden on November 23, 1962.

During this period, Sterling had indications that illegal efforts would be made to damage the St. Charles property. Defective pistons sent to customers required reimbursement of $20,000 for damages to assembled engines in which the pistons had been installed. An experienced production worker produced 2,000 truck pistons with tapered instead of square cut grooves, an obvious malfabrication readily admitted by a Union official. Plaintiff John Woody reported an unusual amount of scrap accumulating which could be corrected if he were elevated to foreman. More important were the threatening telephone calls to Sterling's president creating apprehension of serious damages to the company property which included expensive and sensitive machinery. Thus, the decision to deny plaintiffs access to the plant on the last working day although they would be compensated.

Plaintiffs' original complaint was filed September 13, 1963, some six months after closing of the plant. We are first concerned with the disposition of Count III in the first amended complaint as this was resolved with finality by the District Court's granting Sterling's motion for summary judgment.

Count III of First Amended Complaint.

In Count III, plaintiffs sought damages against Sterling for loss of seniority termination benefits alleged to be due under the provisions of the bargaining agreement. Plaintiffs alleged that termination was effectuated on February 27, 1963, whereas the contract expired on February 28, 1963.

Sterling moved to dismiss for (1) lack of jurisdiction; (2) lack of individual capacity to sue on the matter involved; and (3) failure to state a claim upon which relief could be granted.

Plaintiffs and Sterling filed motions for summary judgment, both being accompanied by affidavits.

Assuming jurisdiction, a simple construction of the contract is involved and we agree with the District Court's interpretation and also its conclusion that undisputed evidence, supporting the summary motions, reflects that plaintiffs were not terminated until the contract had expired, and hence not entitled to judgment for termination allowances.

A serious question exists, however, as to plaintiffs' right to bring this action because of failure to exhaust their contract grievance procedure remedies. The District Court seriously questioned its jurisdiction but because of the parties' apparent waiver of those remedies proceeded to determine the issue on evidence before it.

The issue before us then is whether plaintiffs may seek federal court aid by an action on a collective bargaining agreement under § 301 (29 U.S.C.A. § 185(a)) without first exhausting the internal contract remedies.

Our duty to formulate a uniform body of substantive federal labor law for the enforcement of collective bargaining agreements has been recognized. Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). But the actual content of § 301 jurisdiction has not been defined and has rather been developed on a case-by-case piece-meal basis. The pre-emption of San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), depriving both state and federal courts of § 301 jurisdiction to hear individual complaints on contract breaches if the questioned activity is arguably subject to § 7 or § 8 of the National Labor Relations Act has now been explained so that "the authority of the Board to deal with an unfair labor practice which also violates a collective bargaining contract is not displaced by § 301, but it is not exclusive and does not destroy the jurisdiction of the courts in suits under § 301." Smith v. Evening News Ass'n., 371 U.S. 195, 197, 83 S.Ct. 267, 269, 9 L.Ed.2d 246 (1962); Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed. 2d 462 (1962).

And though § 301 jurisdiction has been extended to "suits to vindicate individual employee rights arising from a collective bargaining contract," Smith v. Evening News Ass'n, supra at 200, 83 S.Ct. at 270, there remains the condition precedent "that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress." Republic Steel Corp. v. Maddox, 379 U.S. 650, 652, 85 S.Ct. 614, 616, 13 L.Ed.2d 580 (1965); Smith v. Evening News Ass'n., supra n. 1 (by implication); Belk v. Allied Aviation Service Co., 315 F.2d 513 (2 Cir., 1963), cert. denied, 375 U.S. 847, 84 S. St. 102, 11 L.Ed.2d 74 (1963).

In the case at bar, the bargaining agreement contains four steps detailing the internal grievance procedure for exclusive settlement of all differences between the employees individually and collectively and Sterling.⁵ But there is no allegation in the...