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Mack Trucks Inc. v. International Union

argued: April 12, 1988.


On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Action No. 87-4379.

Hutchinson, Scirica and Garth, Circuit Judges.

Author: Scirica


SCIRICA, Circuit Judge.

This appeal requires us to consider the jurisdiction of a federal district court to determine the existence of a collective bargaining agreement. In so doing, we must also examine the relationship between the subject matter jurisdiction of the National Labor Relations Board ("the NLRB") and a district court.

Defendant International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW ("UAW") appeals from a district court judgment declaring valid and enforceable a collective bargaining agreement between plaintiff Mack Trucks, Inc., ("Mack") and the UAW. We must address three issues: (1) whether the district court had subject matter jurisdiction under Section 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a) (1982); (2) whether a contractual grievance and arbitration procedure under a previous agreement barred judicial relief; and (3) whether the district court correctly found a meeting of the minds over the terms of the new agreement. For reasons that follow, we hold that the district court had jurisdiction to consider this action, together with the underlying issue of the existence of a collective bargaining agreement. We also hold that the grievance and arbitration procedure did not bar this suit. Finally, we will affirm the court's finding that the parties created a new collective bargaining agreement.


Mack and the UAW were parties to a master collective bargaining agreement, effective from October 30, 1984, to October 20, 1987. This agreement ("the 1984 agreement") governed Mack employees in bargaining units represented by four local unions: Local 677 in Allentown and Macungie, Pennsylvania; Locals 171 and 1247 in Hagerstown, Maryland; and Local 229 in Somerset, New Jersey.

In late 1986, Mack and the local unions covered by the 1984 contract commenced preliminary negotiations on a new agreement. Mack desired wage reductions and guaranteed productivity increases. For its part, the UAW sought greater job security. Based on these general proposals, the parties began bargaining in early 1987 on a new collective bargaining agreement.

One of the most significant issues in the negotiations concerned the proposed closing of Mack's assembly plant 5-C in Allentown. In October, 1985, Mack had informed the UAW of its intention to construct a new assembly facility, the location then undetermined. The company assured the UAW that no existing plant covered by the 1984 agreement would be closed during the life of that contract. In January, 1986, Mack announced that the new facility, which was to replace the Allentown assembly plant, would be built in Winnsboro, South Carolina. The Allentown facility was scheduled to close at the end of October, 1987, after the expiration of the 1984 agreement.

On February 25, 1986, the UAW filed a grievance at Allentown Plant 5-C, contending that the plant closing violated the 1984 agreement. On October 1, 1986, the UAW submitted a second grievance at Plant 5-C, claiming that the UAW had a right to automatic recognition at the Winnsboro plant, that Mack was required to apply the 1984 agreement to Winnsboro, and that the agreement controlled the transfer rights of union employees to the new facility. After both grievances were denied at all steps, the UAW sought arbitration. At the time of the negotiations for a new labor agreement, arbitration of the Allentown/Winnsboro grievances had not yet been scheduled.

In early April, 1987, the parties agreed to hire former United States Secretary of Labor William Usery to mediate their dispute. At Usery's request, representatives of Mack and the UAW met in Crystal City, Virginia, on April 18, 1987. On the night of April 22, after reaching an impasse on the Allentown/Winnsboro disputes, the parties agreed to "carve out" those issues from the new agreement, to proceed to expedited arbitration of the Allentown/Winnsboro grievances on May 5 and 6, 1987, and to accept the arbitration decision as final and binding. Thereafter, Mack and the UAW continued negotiations on the remaining issues. At approximately 7:00 a.m. on April 23, representatives of both parties concluded the negotiations with what they termed a "handshake" session; that is, they shook hands with each other, with Usery, and his assistant, William Hobgood, and congratulated one another on reaching a new agreement. They also discussed the need to hold a ratification vote of UAW members before May 5, so that the agreement would be in effect by the date of the Allentown/Winnsboro arbitration. That morning, Usery announced to the press that Mack and the UAW had reached a "tentative agreement." Transcript of Hearing at 54-55. Usery included the word "tentative" at the request of William Casstevens, vice-president of the UAW International, because the agreement still required approval by the UAW's Mack Truck Council, which represented local union members governed by the agreement,*fn1 and ratification by union members.

In order to inform the membership of the new agreement, local union officials prepared and distributed summaries of its relevant terms. On May 3, a majority of the UAW members covered by the 1984 agreement ratified the new agreement. In Allentown, it was ratified by a vote of 1362-303; in Hagerstown, 736-81; and in Somerset, 29-12. Although the employees at the Macungie facility did not vote on ratification of the new agreement, fewer than 100 union members were employed at that plant; therefore, a majority of Mack union employees voted in favor of ratification.

The following day, Pennsylvania Governor Robert P. Casey convened a press conference at Mack's headquarters in Allentown to announce the new agreement. At the press conference, Usery and Kim Blake, president of UAW Local 677, confirmed that the parties had reached a new agreement. On May 5 and 6, Mack and the UAW submitted the Allentown/Winnsboro grievances to arbitration before Arthur Stark, of the American Arbitration Association.

In the weeks following the ratification vote, the parties exchanged proposed contract language intended to reflect the terms of the agreement reached at Crystal City. They also met several times in order to prepare the agreement's specific language. During this period, Mack began to implement certain provisions of the new agreement, including wage reductions and the special early retirement benefits program. From their meetings with Mack in mid-June, the UAW officials learned of this implementation.

On June 19, Stark issued his award on the Allentown/Winnsboro grievances. He determined that the proposed closing of the Allentown facility did not violate the 1984 agreement and that the UAW was not entitled to automatic recognition at the new plant in Winnsboro. He also decided that under the 1984 agreement, certain employees affected by the closing of the Allentown facility had transfer rights to Winnsboro that superseded the rights of prospective employees hired to work at the new plant. At this point the parties had not completed memorializing the new agreement in a written document.

On July 2, the UAW filed a grievance alleging that Mack had unilaterally implemented modifications to the new agreement.*fn2 Four days later, the UAW wrote to Mack warning that, barring resolution of outstanding disputes and the execution of a document by July 15, the UAW would declare that there was no new agreement between the parties. At the same time, the UAW refused to complete the process of memorializing the agreement in writing. On July 10, the UAW stated in a letter to the company:

There is not now, nor has there ever been, any agreement with the UAW-Mack Trucks Department to allow you to deviate from the terms and conditions of the October 1984 to October 20, 1987 [Agreements].

App. at 753.

On July 14, 1987, Mack filed suit in district court for a declaratory judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201 (1982), and § 301(a) of the LMRA. The company asked the court to declare valid and enforceable a new collective bargaining agreement between the parties.*fn3 At the bench trial, Mack introduced into evidence its exhibit 80, prepared at the request of the district judge, as a summary of the parties' agreement reached on April 23 and of the unresolved disputes over contract language. In open court, the district judge questioned counsel for the parties in order to determine what disagreements remained and to resolve disputes over language. At the trial's conclusion on October 9, 1987, the judge issued an order declaring that a new collective bargaining agreement existed and that Mack's Exhibit 80, as modified during the courtroom discussion, represented the new agreement. On October 26, 1987, the court issued an opinion containing findings of fact and conclusions of law. See 671 F. Supp. 1027. This appeal by the UAW followed.


As a threshold matter, we must determine whether the district court had subject matter jurisdiction to consider the issues raised in this case. In its opinion, the court concluded that it had jurisdiction pursuant to the Declaratory Judgment Act*fn4 and § 301(a) of the LMRA. Section 301 provides, in relevant part:

Suits for Violations of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

29 U.S.C. § 185(a).

The UAW raises two closely related arguments contesting the district court's judgment. First, the UAW contends that Mack's claim involves issues uniquely within the expertise of the NLRB, rather than a contract action within the district court's jurisdiction. Therefore, it maintains, the NLRB's exclusive authority over bargaining conduct preempts the district court from acting. See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244, 245, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959). Second, it argues § 301(a) cannot confer jurisdiction on the district court because it authorizes courts to adjudicate only disputes over alleged violations of a collective bargaining agreement, not controversies over the actual existence of a contract.

In response, Mack contends that its claim is a straightforward contract action, which is broader than the type of matter generally preempted in favor of the NLRB. Alternatively, it maintains that because the UAW violated the new agreement by repudiation,*fn5 the district court properly held that it had jurisdiction over the claim. Alleging a contractual breach, Mack argues, is not a condition precedent to the court's jurisdiction under § 301(a) to decide whether a contract existed. Finally, Mack contends that even if its contract violation claim might also constitute an unfair labor practice within the NLRB's domain, the ...

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