APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 75-0078)
Before Aldisert, Van Dusen and Garth, Circuit Judges.
This case involves a dispute between plaintiffs, former employees of Martin Trucking, Inc. ("Martin"), and defendant, Mitchell Transport, Inc. ("Mitchell"), a corporation which took over Martin's cement hauling business. Plaintiffs seek to enforce an arbitration award, issued in 1974 while Martin was their employer, against Mitchell. In an unpublished opinion, the district court*fn1 held that the underlying dispute was not arbitrable and that Mitchell, as Martin's successor, was bound by the arbitration award issued against Martin. The district court awarded damages totaling $172,833.12 and costs. Because we conclude the district court was without jurisdiction to adjudicate plaintiffs' claims, we vacate the district court's judgment and remand with instructions to stay further action in the suit until the parties have had an opportunity to submit the dispute to arbitration under the terms of the collective bargaining agreement.
Defendant Mitchell is a corporation registered to do business in Pennsylvania. Since January 2, 1975, Mitchell has hauled all the cement produced by the Bessemer Cement Co. ("Bessemer"). Mitchell uses 70 trucks, all of which it owns, to haul the cement. Prior to January 2, 1975, two trucking companies serviced the Bessemer facility, each of which hauled approximately half of the cement produced. Martin was one of these two companies. Martin used 40 trucks in its cement hauling business, 19 of which it owned, 21 of which it leased from the individual plaintiffs.
Plaintiffs include 17 former employees of Martin and their union. The 17 individual plaintiffs own trucks which they drove to haul cement for Martin. As "owner-drivers," they received rental income for leasing their trucks to Martin and, in addition, received wages for operating those trucks. Teamsters Local 261 ("Union"), also a plaintiff, was the exclusive collective bargaining representative for both the regular drivers, who operated the company-owned trucks, and the owner-drivers.
The Union and Martin entered into a collective bargaining agreement, effective from July 9, 1973, through June 30, 1976. This agreement established, among other terms, the wages for all drivers, rental incomes for the owner-drivers, and a four-step grievance procedure which culminated in binding arbitration. Six pages of the agreement dealt with the owner-drivers.
On January 27, 1974, the Joint Area Committee issued an order ("JAC 1108") under step 4 of the established grievance procedure. JAC 1108 ordered Martin to comply with the Additional Company Equipment ("ACE") agreement, an agreement separate from, but supplemental to, the original collective bargaining contract. The ACE agreement, in part, provides:
"In order to protect the owner-drivers, the Employer shall be restricted to the following limitations on increasing the number of pieces of company equipment (trucks): (1) up to 5 pieces on or after June 1, 1974; (2) up to 5 additional pieces on or after June 1, 1975."
Martin thereby was limited to the use of 24 company-owned trucks from June 1, 1974, to June 1, 1975, and 29 such trucks from June 1, 1975, until the expiration of the collective bargaining contract on June 30, 1976. Martin had to lease all other trucks it needed to haul cement from the owner-drivers. This arrangement gave the owner-drivers some assurance that their trucks would be leased and they would receive rental income. JAC 1108 also provided that it "shall be binding with no appeal" and that failure to abide by the order "shall give the other party the immediate right to all legal and economic recourse."
Before taking over the hauling operations, Mitchell entered into a lengthy agreement of sale with Martin. Mitchell agreed, inter alia, to buy Martin's authorities to haul cement, and "to assume the terms and obligations of (Martin) under the Collective Bargaining Agreements...."
Mitchell met with the Union on December 30, 1974, the last working day before Mitchell began hauling the Bessemer cement. At the meeting, Mitchell's representative, both orally and in writing, gave notice to the Union that Mitchell would not lease any trucks from the owner-drivers and that all of the cement hauling would be done in 70 new trucks recently purchased by Mitchell. He offered to hire all drivers, including the plaintiff owner-drivers, and then signed the Martin-Union collective bargaining agreement.
From January 2, 1975, when Mitchell took over, until the expiration of the collective bargaining contract on June 30, 1976, Mitchell consistently refused to lease any of the owner-drivers' trucks. Despite this, some of the plaintiff owner-drivers accepted the offer of employment as drivers, thereby leaving their trucks ...