to Bell of Pennsylvania, is totally unacceptable.
The label to be attached to the legal/equitable principles involved is, I believe, unimportant. It is, no doubt, a form of corporate veil-piercing: a parent corporation cannot be permitted to juggle its subsidiaries or take advantage of the corporate formalities in order to perpetrate a legal wrong on third parties. Or, it can perhaps be viewed as a matter of agency: In its total control over all aspects of the conglomerate-restructuring, AT&T acted as the agent for each of its wholly owned subsidiaries, including those yet-to-be-born.
Finally, it should be noted that, unless plaintiff is bound by the collective bargaining agreement, Bell of Pennsylvania would plainly be in breach of para. 12 of the memorandum of understanding. It is indeed doubtful that the policies underlying both the FCC proceeding and the government antitrust action would be served by a ruling which would enable AT&T thus to shift the burdens associated with compliance with a collective bargaining agreement pertaining to business being conducted by plaintiff, which continues to be a wholly owned subsidiary of AT&T, to Bell of Pennsylvania, which was divested in 1984.
For all of these reasons, I persist in the view that the plaintiff is bound by the terms of the collective bargaining agreement, with respect to its operations between January 1, 1983, when the telephone stores and related assets were conveyed to plaintiff, and the date in 1984 when employees represented by the defendant union were transferred from the employ of Bell of Pennsylvania to plaintiff's employ.
This does not, of course, necessarily mean that the FCC order, the Consent Decree, and the resulting reorganizations are irrelevant to the interpretation and enforcement of the provisions of the collective bargaining agreement. Those impacts will be discussed below. But it does mean, in my view, that all of the three grievances involved in this case were and are arbitrable.
III. THE GRIEVANCES AND THE ARBITRATION AWARDS
The first two grievances, referred to as "the Inquirer " case and the " Sunguard case" were decided in favor of the union by a board of which Mr. Moskowitz was the neutral chairman. In the third matter, which may be referred to as the "delivery and inventory dispute", a board of arbitrators headed by neutral Chairman Christensen found that the company was in violation of the collective bargaining agreement, but deferred decision as to the appropriate remedy. Plaintiff challenges all three awards on the ground of the arbitrators' lack of jurisdiction, but that issue has been resolved, adversely to plaintiff, in the preceding portion of this Opinion. As I understand it, apart from the jurisdictional argument, plaintiff does not question the correctness of the arbitrators' decision in the " Sunguard case" or in the "delivery and inventory dispute" matter. At any rate, given the very limited scope of judicial review in these matters, I see no reason to disturb those two awards.
Plaintiff is on firmer ground, however, with respect to the award in the " Inquirer case". As a preliminary matter, I reject the defendant union's argument that plaintiff's challenge to the Inquirer arbitration award is time-barred. Plaintiff sought to enjoin the scheduled arbitration in that matter before it occurred, and the Amended Complaint specifically seeking to set aside the award in that case was filed less than four months after the award was rendered. Under DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 76 L. Ed. 2d 476, 103 S. Ct. 2281 (1983), and Local Union 1397 v. United Steelworkers of America, 748 F.2d 180 (3d Cir. 1984), plaintiff's claims are not time-barred.
In October 1982, Bell of Pennsylvania entered into a "transition agreement" for the sale of a telephone system to the Philadelphia Inquirer. The system included a Dimension 2000 PBX, a Pro 500, 350 telephone sets, riser cable, and floor or flat wire. The Bell representative in these negotiations was a Mr. Whitecotton.
Under the terms of the "transition agreement", the Inquirer was given the right to cancel the agreement of sale at any time after January 1, 1983 if, after negotiating with plaintiff, it chose to enter into a new agreement with the plaintiff.
The Inquirer exercised its option to cancel the contract with Bell of Pennsylvania, and renegotiated its order for the system with plaintiff. These negotiations were conducted for plaintiff by the same Mr. Whitecotton who had formerly worked for Bell of Pennsylvania. Under the new arrangement, the Inquirer chose to purchase only certain component parts of the system from plaintiff. Specifically, the Inquirer purchased its own flat wire and arranged with its own electrical contractor to install the flat wire (running under the carpet from the junction box to the telephone). The union contended, and a majority of the arbitrators agreed, that plaintiff breached the collective bargaining agreement by permitting this "piecemeal" arrangement to be carried out in a way which deprived covered employees represented by the defendant union of the flat-wire installation work.
As I understand it, the union argument, accepted by the arbitrators, is that the net effect of the final arrangement with the Philadelphia Inquirer was that, contrary to established practice, the plaintiff was permitting flat-wire installation work to be performed by "outside contractors", whereas that work should have been preserved for the workers represented by the defendant. I have great difficulty reconciling that result with the language of Article 17.01 of the collective bargaining agreement, which, as noted above, requires the company to "maintain its established policies as to the assignment of work in connection with the installation and maintenance of communications facilities owned, maintained and operated by the Company." The flat-wire portion of the installation was owned by the Philadelphia Inquirer, purchased from an outside source.
It is doubtful, in my view, that the collective bargaining agreement could properly have been interpreted, at any time, as enabling the union to dictate to the company the terms and conditions of the company's transactions with its customers. But whatever may have been the situation in the era preceding the FCC order and the Consent Decree in the antitrust case, there can be no doubt that, in October 1982 and January 1983, it was encumbent upon the plaintiff to grant its customers the kind of flexibility represented by the sale to the Philadelphia Inquirer.
I conclude, therefore, that the arbitrators' award in the Philadelphia Inquirer case must be vacated and set aside, both because the award does not draw its essence from the terms of the collective bargaining agreement, and because, in any event, its enforcement would be contrary to public policy.
AND NOW, this 14th day of May, 1985, it is ORDERED:
1. Upon consideration of plaintiff's application for declaratory judgment, it is ADJUDGED, DECLARED AND DECREED that the plaintiff is bound by the terms of the collective bargaining agreement between Bell of Pennsylvania, Inc. and the defendant union, dated August 1980, which was in effect during 1983.
2. Plaintiff's application for an injunction against further arbitration proceedings is DENIED.
3. Plaintiff's application to vacate and set aside the respective awards of arbitrators is, with respect to the awards in the " Sunguard " case and the "delivery and inventory dispute" case, DENIED.
4. Plaintiff's application to vacate and set aside the award of arbitrators is, in the Philadelphia Inquirer case, GRANTED, and said award is VACATED AND SET ASIDE.
5. Each party to bear its own costs.