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Dow Chemical Co. v. National Labor Relations Board

decided: November 26, 1980; As Amended December 17, 1980, January 8, 1981.



Before Gibbons, Weis and Sloviter, Circuit Judges.

Author: Gibbons


Dow Chemical Company (Dow) petitions under section 10(f) of the National Labor Relations Act, (the Act) 29 U.S.C. § 160(f), to review an order of the National Labor Relations Board issued against it in unfair labor practice proceedings in which the United Steelworkers of America, AFL-CIO-CLC (the Union) was the charging party. The Board has cross-petitioned for enforcement of its September 17, 1979 order, which was issued following a remand from this court.*fn1 That remand resulted from a petition for review filed by the Union seeking review of an earlier Board decision dismissing all its unfair labor practice charges. United Steelworkers of America, AFL-CIO-CLC v. NLRB, 530 F.2d 266 (3d Cir.), cert. denied, 429 U.S. 834, 97 S. Ct. 100, 50 L. Ed. 2d 100 (1976).

In its original decision the Board had found that a strike by the Union membership on June 7, 1971, before completion of the final stage of a five-step grievance procedure, was a breach of a no-strike clause in the Collective Bargaining Agreement with Dow, and was not activity protected by section 7 of the Act, 29 U.S.C. § 157. The Board also originally held that the strike had been precipitated by unilateral action by Dow management, unauthorized by the terms of the Collective Bargaining Agreement and thus in violation of section 8(a)(5) of the Act, 29 U.S.C. § 158(a)(5). Relying on its decision in Arlan's Department Store of Michigan, Inc., 133 N.L.R.B. No. 56 (1961), the Board concluded that the company's unilateral action was not so serious an unfair labor practice as to warrant the Union's abandonment of contract remedies and resort to a strike in breach of its no-strike agreement. Thus, it concluded, none of the subsequent company actions in response to the strike were unfair labor practices.*fn2 The Union, petitioning here, contended in reliance on Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 76 S. Ct. 349, 100 L. Ed. 309 (1956), that once the company committed an unfair labor practice the Union was justified in abandoning contract remedies and resorting to self-help. Thus, it urged, the strike was lawful protected activity, and all the company's subsequent actions in response to it were unfair labor practices in response to that protected activity.

We "decline(d) the invitation to resolve this case by simply pigeon-holing it as within the rule of Mastro Plastics or of Arlan's." 530 F.2d at 272. Instead we remanded to the Board to consider whether, in view of the developments in the law of labor contracts remedies since the 1956 decision in Mastro Plastics, the Board was correct in its conclusion that each action taken by the company in response to a strike in breach of a no-strike agreement was warranted. Dow sought review by the Supreme Court, which the Board, accepting our remand, successfully opposed.*fn3

On remand, the Board apparently reconsidered, holding instead, on the same record, that the company's unfair labor practice of instituting a unilateral change in working conditions was a serious unfair labor practice to which the Mastro Plastics rule of contract interpretation applied, so that the Union members' strike was protected activity. In thus finding that the strike was not a breach of contract, the Board eliminated the premise upon which we had acted. It never reached the question whether any of the company's actions, albeit in response to a strike in breach of the no-strike clause, might have been unfair labor practices. Thus we are now presented with quite a different case than the one which was argued in September 1975. We grant Dow's petition for review and deny the Board's petition for enforcement.


Facts, Charges, and Initial Decision

Dow operates a plant at Allyn's Point, Ledyard, Connecticut, where it manufactures plastics and related products. From 1954 until August 9, 1971 it recognized the Union as the bargaining representative of the production employees at the plant. Prior to May of 1971 the plant's latex department was on a seven day a week production schedule. Sixteen latex department employees worked a schedule of seven days on the job and two days off, with rotating shift assignments, while the remaining three worked a regular five day week. In mid-May Dow decided, for economic reasons related to utility costs, to put all latex department employees on a regular five day schedule, with a two day shut down. Dow believed it had the right to do so under the Management Rights clause of the Collective Bargaining Agreement effective from February 23, 1970 through February 26, 1973. That clause authorized it to determine "schedules of production." When the Union was notified of the proposed change, it took the position that the change was not a matter of management prerogatives under the contract, but a change in working conditions subject to collective bargaining. Dow's personnel manager indicated that while he was willing to discuss implementation of the change he did not consider the change itself to be a matter for negotiation. The Union thereupon filed a grievance.

The contract contains a five-step grievance procedure. It also provides that if the grievance is unresolved after the final step it "may be submitted to any arbitrator or a board of arbitration provided the bargaining committees representing the Union and the Company each furnish written consent to utilize arbitration."*fn4 Grievance procedures are mandatory, while arbitration requires mutual written consent. Grievance settlements may be retroactive.*fn5 The contract also provides:

7.7 Strikes and Lock-Outs.

The Union will not cause or engage in or authorize its members to engage in any strike against the Company, nor will any members of the Union take part in any other strike or stoppage or curtailment of work or restriction of production or interference with production of the Company, unless and until all of the Bargaining and Grievance Procedures outlined in this agreement have been exhausted. The Company will not cause or sanction any lock-outs unless and until all of the Bargaining and Grievance Procedures as outlined in this Agreement have been exhausted.

The Bargaining and Grievance Procedure in this Article has not been exhausted until all items, a, b, and c, have been carried out as set forth below:

(a) The Grievance Procedure has been used and completed as set forth in Section 7.1.

(b) The Grievance Procedure has been processed through the last Step in Section 7.1 and the Union or the Company has requested in writing, within 30 days to proceed to arbitration as per Section 7.2.

(c) The Arbitration Procedure in Section 7.2 has been completed or the Union has been denied the right to the use of arbitration.

The plain meaning of this clause is that the union undertook a no-strike obligation lasting until at least thirty days after the completion of the fifth and final grievance step.

It is undisputed that the parties completed the first four steps of the grievance procedures; the Step 4 meeting took place on June 3, 1971 but failed to resolve the grievance. At that meeting a union representative orally suggested immediate arbitration, and the company responded by urging the Union to pursue the contract grievance machinery. The contract provides that if a satisfactory solution is not arrived at in Step 4 the Company shall, on written request by the Union, arrange for the unresolved case to be reviewed within ten days by the Midland Division Manager in charge of the plant. The change to five day operation was scheduled to go into effect on Monday, June 7, 1971. On Friday, June 4, there was a conversation between a representative of the Union and Dow's industrial relations manager, but no oral or written request for a Step 5 meeting was made. Indeed, no request for a Step 5 grievance ...

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