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United Steelworkers of America v. Fort Pitt Steel Casting

decided: April 30, 1979.

UNITED STEELWORKERS OF AMERICA, AFL-CIO; AND JAMES GARRY, QUINTO DELISSIO, PATRICK MCGHEN AND ERNEST A. OBLACK, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, APPELLEES,
v.
FORT PITT STEEL CASTING, DIVISION OF CONVAL-PENN, INC., DIVISION OF CONVAL CORPORATION, APPELLANT



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA D.C. Civil No. 78-0601

Before Hunter and Weis, Circuit Judges, and Stapleton,*fn* District Judge.

Author: Hunter

Opinion OF THE COURT

These three consolidated appeals result from a longstanding labor dispute between Fort Pitt Steel Casting (Fort Pitt, or the Company) and the United Steelworkers of America (Steelworkers, or the Union). The Steelworkers are the exclusive bargaining agent for over 300 Fort Pitt employees at the Company's plant in McKeesport, Pennsylvania. On June 23, 1978, the district court enjoined Fort Pitt from terminating premium payments necessary to keep its employees' hospital and insurance benefits in effect during a labor dispute*fn1 (No. 78-2035). Subsequently, on November 9, 1978, the district court held Fort Pitt in civil contempt for stopping the premium payments in violation of the injunction (No. 78-2654). Finally, on December 18, 1978, the court denied Fort Pitt's motion to vacate the injunction*fn2 (No. 79-1019). We affirm the district court's orders in Nos. 78-2035 and 78-2654. However, in No. 79-1019, although we reject Fort Pitt's claim that the injunction be vacated immediately, we remand to the district court to determine whether the Company has permanently terminated all operations at the plant. If the court finds it has done so, then the injunction must be dissolved.

I

FACTS

Fort Pitt and the Steelworkers executed a three year collective bargaining Agreement (Agreement) on March 3, 1975. Section 9 of the Agreement is entitled "Adjustment of Grievances." That section provides that the grievance procedures agreed upon by the parties culminate, if necessary, in binding arbitration,*fn3 that they apply to "any (employee) request or complaint,"*fn4 and that "(t)he grievance procedure may be utilized by the Company in processing Company grievances."*fn5 Section 19 is entitled "Prior Agreements." Paragraph 140 of that section provides:

The parties agree that in the event of a labor dispute at the end of termination of this Agreement, The Company will continue hospitalization and insurance benefits. At the end of said dispute, The Company will be reimbursed for payments made on behalf of the employees in payment methods mutually agreed on by the parties.

On March 3, 1978, the Agreement having expired and the parties having failed to reach a new contract, the Steelworkers began a lawful work stoppage. Pursuant to paragraph 140 of the 1975 agreement, Fort Pitt continued hospitalization and insurance coverage for its striking employees. As the strike continued, the parties engaged in negotiations for a new contract. In the course of those negotiations, the union denied that it was obligated by paragraph 140 to reimburse Fort Pitt for the benefit payments advanced by the Company during the work stoppage.*fn6

The Company considered the Union's refusal to commit itself to reimbursement to be in breach of paragraph 140. As a result, in a letter to the Union dated May 16, 1978, Fort Pitt threatened to discontinue making premium payments unless by June 1, 1978, the Union guaranteed in writing to provide repayment.

The Steelworkers declined to furnish the assurances sought by Fort Pitt and, in order to prevent the Company from carrying out its threat, sought injunctive relief in the Court of Common Pleas of Allegheny County.*fn7 The case was removed to the United States District Court for the Western District of Pennsylvania and, on June 7, 1978, the court entered a preliminary injunction barring Fort Pitt from:

Failing to advance and to pay, in a timely manner, the premiums necessary to keep (Fort Pitt employees') hospitalization and insurance policies in effect.

On June 23, 1978, the district court issued an opinion and amended order maintaining the preliminary injunction.*fn8 452 F. Supp. 886. The court held that whether the Steelworkers were required by paragraph 140 to guarantee reimbursement was an arbitrable issue and that by threatening to cut off premium payments, instead of seeking arbitration, the Company was engaging in "self-help." Because the court found that the Company's self-help remedy tended to undermine the integrity of the arbitral process, and because it concluded that the union members were in danger of immediate and irreparable injury, the court held that a preliminary injunction prohibiting the Company from terminating payments was both lawful and appropriate under the doctrine of Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 90 S. Ct. 1583, 26 L. Ed. 2d 199 (1970).*fn9

Fort Pitt initially complied with the preliminary injunction and negotiations for a new contract proceeded. Fort Pitt did not, however, seek to grieve the Union's alleged breach of the Agreement. On June 30, the Company proposed that paragraph 140 be changed so that the Company would make premium payments only during the first 30 days of a work stoppage.*fn10 The Union rejected this proposal. On September 13, the Company submitted a modified proposal which gave the Company the sole right to terminate contributions after the 30 day period had expired.*fn11 This proposal, too, was promptly rebuffed.

Concluding that the parties had bargained to an impasse regarding paragraph 140, the Company unilaterally implemented its September 13 proposal. On October 16, it notified its employees by letter that because more than 30 days had elapsed since the new paragraph 140 had been implemented, it was exercising its right under the new provision to terminate the payments. The Steelworkers subsequently filed a "Motion for Adjudication of Civil Contempt" in the district court. In granting the motion, the court recognized that management is ordinarily entitled to implement its own proposals once an impasse is reached, but concluded that because of the "unique" nature of the old paragraph 140, "the Company ha(d) in effect bargained away its right to institute a unilateral change in this clause following an impasse."

On November 10, with the work stoppage continuing, the Company made a "last and final offer" for a new Agreement. This offer was rejected and on November 29, the Company announced that it was totally and permanently closing the plant effective November 30, 1978. Fort Pitt subsequently moved to vacate the June 7 and June 23 orders, contending that its obligation under paragraph 140 ended with the shut-down of the plant. At a hearing before the district court, the Company claimed that no future production of any kind was planned, that ...


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