This case involves a labor dispute between defendant Sun Ship, Inc. and two unions representing workers in Sun's shipyard, over Sun's attempt to subcontract work allegedly subject to the collective bargaining agreements between the parties at the same time that it is laying off a substantial number of employees. Plaintiff, Lodge 802 of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, moved for a preliminary injunction ordering Sun to arbitrate the issue, and enjoining Sun from discontinuing operations or further subcontracting while the arbitration is pending. Lodge 804 of the same international moved to intervene, seeking similar relief for its members.
On February 17, 1981, I held a hearing on the motions at which representatives of the unions and the company testified. Thereafter the parties submitted requests for findings of fact and conclusions of law, and memoranda addressed to the legal issues. On the basis of the record developed, I make the following
I. FINDINGS OF FACT
1. Plaintiff, Lodge 802, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers is an unincorporated association and a labor organization representing production and maintenance employees.
2. Intervenor, Lodge 804, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers is an unincorporated association and a labor organization representing coordinators, draftsmen, hourly designers and blueprint room employees.
3. Defendant, Sun Ship, Inc., is a Pennsylvania corporation engaged in the business of shipbuilding and repair and manufacturing of industrial products with its principal place of business at the Foot of Morton Avenue, Chester, Pennsylvania 19013.
4. Local 802 and Sun are parties to a collective bargaining agreement effective for the period beginning February 2, 1979 through January 8, 1982.
5. Local 804 and Sun are parties to a collective bargaining agreement effective for the period beginning February 9, 1979 through January 8, 1982.
6. On January 9, 1981, Sun announced its decision to terminate all new ship construction currently performed at its Chester, Pennsylvania, shipyard.
7. Pursuant to its decision, Sun has devised a plan to lay off within a year approximately 2400 of the 3200 employees currently represented by Local 802. It has likewise devised a plan to lay off within a year virtually all of the 160 employees represented by Local 804.
8. Since January 9, 1981, Sun has laid off indefinitely 386 employees represented by Local 802, and 9 employees represented by Local 804.
9. Sometime after January 9, 1981, Sun subcontracted with Bath Iron Works, Bath, Maine, for the construction of a sugar barge for California and Hawaii Sugar Company. Before subcontracting, the barge was to have been constructed in Sun's Chester shipyard, where work on the sugar barge would have been performed by members of Local 802.
10. Article IX, Paragraph 7 of the collective bargaining agreement between Local 802 and Sun provides that indefinite lay-offs must be predicated upon "reduction in the amount of available work."
11. Article XXVIII of the collective bargaining agreement between Local 802 and Sun provides that all disputes over the meaning, application, or interpretation of the agreement shall be submitted to arbitration.
12. Sometime shortly before announcing its decision to phase out its new ship construction business, Sun subcontracted with Dredge Technology, Inc., in Virginia, and F. K. & B. Co., in Sweden, for engineering services on a hull for the Waterman Steamship Company. Without subcontracting, this engineering work on the hull would ordinarily have been performed at Sun's Chester shipyard by members of Local 804.
13. Article I, section 1 of the collective bargaining agreement between Local 804 and Sun provides that:
Work normally and regularly performed by bargaining unit employees shall not be performed by non-bargaining unit personnel.
14. Article XVI of the collective bargaining agreement between Local 804 and Sun provides that any dispute over the meaning, application, or interpretation of the agreement shall be submitted to arbitration.
15. Both Local 802 and Local 804 filed grievances contending that by subcontracting work Sun has violated their respective collective bargaining agreements.
16. Sun agrees that the grievances are subject to arbitration as provided in the respective agreements, and further agrees to take steps necessary to expedite the arbitrations.
Local 802 originally brought this action seeking an injunction ordering Sun to proceed to arbitration in accordance with the collective bargaining agreement, Boys Markets v. Retail Clerks Local 770, 398 U.S. 235, 90 S. Ct. 1583, 26 L. Ed. 2d 199 (1970), and ordering Sun to maintain the status quo at the shipyard pending the issuance of a decision by the arbitrator. Transit Union Division 1384 v. Greyhound Lines, Inc., 550 F.2d 1237 (9th Cir. 1977); Lever Brothers v. Chemical Workers Union, Local 217, 554 F.2d 115 (4th Cir. 1976). Sun has now agreed that it must arbitrate these issues, and therefore the only remaining issue is whether it should be enjoined from further subcontracting or lay-offs until after the arbitrator has ruled.
The parties disagree over the standard to be applied in determining whether an injunction preserving the status quo should issue. Sun contends that I must determine that there is a probability that the unions will prevail at arbitration. Local 804 argues that I need only find that the issues are arbitrable, and contends that any further consideration of the probability of success on the merits invades the province of the arbitrator. If the request before me were limited to an order directing Sun to proceed to arbitration, I agree that the unions would need only to show that the issues are arbitrable. Here, however, the request before me is for a much broader injunction, the issuance of which may in effect give the unions almost the same relief to which they would be entitled if they prevailed at arbitration, namely the temporary preservation of work at the shipyard. Under these circumstances, it is appropriate to give consideration to probability of success on the merits.
Accordingly, the traditional equitable test governing issuance of an injunction is applicable here:
(1) the moving party must demonstrate the probability of ultimate success on the merits of its claim;