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USW v. COPPERWELD STEEL CO.

May 28, 1964

UNITED STEELWORKERS OF AMERICA, an unincorporated association, and United Steelworkers of America, Local Union No. 171, an unincorporated association, Plaintiffs,
v.
COPPERWELD STEEL COMPANY, a Pennsylvania Corporation, Superior Steel Corporation, a Delaware Corporation, and Fulton Industries, Incorporated, a Georgia Corporation, Defendants



The opinion of the court was delivered by: MILLER

This is an action filed by plaintiffs, United Steelworkers of America and its Local Union No. 171, against Copperweld Steel Company (Copperweld), Superior Steel Company (New Superior) and Fulton Industries (Fulton) under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, whereby plaintiffs seek to enforce the pension, insurance and vacation pay rights of approximately nine hundred production and maintenance workers under various collective bargaining agreements with Copperweld. Plaintiffs are the authorized collective bargaining representatives for those employees at the Superior Steel plant in Scott Township, Allegheny County, Pennsylvania.

The dispute arises from the termination of operations at the New Superior Steel plant on the 30th of March 1962. On November 30, 1957, Superior Steel Corporation (Old Superior), which had owned and operated the plant theretofore, was merged into Copperweld, which thereafter and until December 15, 1961, owned and operated the plant as its Superior Steel Division. Subsequent to the merger, Copperweld assumed the rights, liabilities and obligations of Old Superior under the collective bargaining agreements in effect between plaintiffs and Old Superior.

 On January 4, 1960, Copperweld entered into a new collective bargaining agreement, an insurance agreement and a pension agreement with plaintiff United Steelworkers on behalf of plaintiff Local. Under the terms of the insurance agreement, Copperweld or its successors agreed to provide life insurance and sickness and accident, hospitalization and surgical and diagnostic benefits for bargaining unit employees of Superior Steel Division. Pursuant to the terms of the pension agreement, Copperweld established a pension trust fund to satisfy its pension obligations to the Superior plant employees.

 On November 30, 1961, Copperweld entered into an agreement for the sale of its Superior plant, including all of its right, title and interest in the bargaining unit pension agreement and the assets subject thereto. The buyer agreed to assume the liability and obligation of Copperweld's Superior Steel Division pursuant to that pension agreement, with an exception not applicable here.

 It is alleged in the complaint, but denied by defendant Fulton, that the buyer under that sales agreement was Fulton Industries and that during December 1961, Fulton organized New Superior as its subsidiary and assigned the sales agreement to it. Thereafter New Superior owned and operated the plant and succeeded to the status and position of Copperweld under the basic insurance and pension agreements. On March 29, 1962, New Superior notified all bargaining unit employees that their employment would be permanently terminated effective March 30, 1962.

 On June 5, 1962, Copperweld and New Superior modified the sales agreement of November 30, 1961, thereby releasing New Superior from any liability and obligation under the pension agreement. Copperweld assumed and agreed to pay every liability of New Superior arising under the pension agreement to and including June 30, 1962, the expiration date of the basic agreement with plaintiffs.

 Now before the Court are motions to dismiss filed by each of the defendants. The motion of defendant Copperweld is based on the ground that plaintiffs have failed to join indispensable parties, to wit, the several hundred individuals whose claims plaintiffs seek to enforce. The motion of defendant Fulton is based on the Court's lack of jurisdiction over the person of defendant Fulton, the insufficiency of the service of process and the lack of proper venue. The motion of defendant New Superior is based upon the failure of the complaint to state a cause of action upon which relief can be granted and the lack of jurisdiction over the subject matter.

 COPPERWELD'S MOTION

 Defendant Copperweld contends that the complaint should be dismissed for failure of plaintiffs to join the individual employees because this action seeks to enforce the uniquely personal rights of those employees and the Court lacks jurisdiction of such actions under Section 301. Defendant Copperweld's position presents two questions for our determination: (1) Does this Court have jurisdiction of actions wherein the Union seeks to enforce the uniquely personal rights of its individual members? (2) If we have jurisdiction, are the individual Union members indispensable parties to the action?

 The contention of defendant Copperweld that Section 301 does not give the Court jurisdiction of this type of action was upheld by the Supreme Court in Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 348 U.S. 437, 75 S. Ct. 489, 99 L. Ed. 510 (1955), rehearing denied 349 U.S. 925, 75 S. Ct. 657, 99 L. Ed. 1256 (1955), for various reasons. While no one reason or theory for the decision in that case gained the support of a majority of the Justices, subsequently the Courts agreed that Section 301 did not confer jurisdiction of actions in which the Union sought to enforce the uniquely personal or individual contractual rights of its members. See United Steel workers v. Pullman-Standard Car Manufacturing Co., 241 F.2d 547 (3 Cir. 1957); Garfield Local 13-566, etc. v. Heyden Newport Corp., 172 F.Supp. 230 (N.J.1959); Local Lodge 2040, I.A.M. v. Servel, Inc., 268 F.2d 692 (7 Cir. 1959); United Steelworkers, etc. v. New Park Mining Co., 273 F.2d 352 (10 Cir. 1959). Each of these cases relied upon the authority of the Westinghouse decision.

 Since its decision in Westinghouse, the Supreme Court has applied Section 301 to suits to compel arbitration of individual grievances such as rates of pay, hours of work and wrongful discharge, Textile Workers, etc v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957), and General Electric Co. v. Local 205, 353 U.S. 547, 77 S. Ct. 921, 1 L. Ed. 2d 1028 (1957); to obtain specific enforcement of an arbitrator's award ordering reinstatement and back pay to individual employees, United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960); to recover wage increases, Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S. Ct. 519, 7 L. Ed. 2d 483 (1962); and to suits against individual Union members for violation of a no-strike clause in a collective bargaining agreement, Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S. Ct. 1318, 8 L. Ed. 2d 462 (1962). In Smith v. Evening News Association, 371 U.S. 195, 83 S. Ct. 267, 9 L. Ed. 2d 246 (1962), the Supreme Court stated:

 '* * * in Association of Westinghouse Salaried Employees v. Westinghouse Corp., 348 U.S. 437, (75 S. Ct. 489, 99 L. Ed. 510), a majority of the Court in three separate opinions concluded that § 301 did not give the federal courts jurisdiction over a suit brought by a union to enforce employee rights which were variously characterized as 'peculiar in the individual benefit which is their subject matter', 'uniquely personal' and arising 'from separate hiring contracts between the employer and each employee.'

 'However, subsequent decisions here have removed the underpinnings of Westinghouse and its holding is no longer authoritative as a precedent.

 'The concept that all suits to vindicate individual employee rights arising from a collective bargaining contract should be excluded from the coverage of § 301 has thus not survived. The rights of individual employees concerning rates of pay and conditions of employment are a major focus of the negotiation and administration of collective bargaining contracts. Individual claims lie at the heart of the grievance and arbitration machinery, are to a large degree inevitably intertwined with union interests and many times precipitate grave questions concerning the interpretation and enforceability of the collective bargaining contract on which they are based. To exclude these claims from the ambit of § 301 would stultify ...


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