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INTERNATIONAL UNION

May 31, 1988

International Union, United Automobile, Aerospace And Agricultural Implement Workers Of America, UAW
v.
Exide Corporation



The opinion of the court was delivered by: HUYETT, III

 DANIEL H. HUYETT, III, UNITED STATES DISTRICT JUDGE

 On April 19, 1988, plaintiff, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW or the union), filed a complaint and motion seeking to enjoin defendant Exide Corporation (Exide or the company) from unilaterally changing health insurance carriers and from reducing the health insurance benefits and wages of its hourly employees represented by the union pending the completion of grievance and arbitration proceedings. Plaintiff union also seeks an order compelling the company to arbitrate a grievance brought by the union pursuant to the parties' collective bargaining agreement. Specifically, the union seeks an arbitrator's decision on the issue of whether the company unilaterally may change health insurance carriers and reduce wages and health insurance benefits, absent agreement of the union, pursuant to an economic reopener provided for in the collective bargaining agreement. This action was brought pursuant to Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a). *fn1"

 Following a hearing held May 17, 1988, I issued an order granting the union's motion for a preliminary injunction. Defendant appealed this injunction and moved for a stay pending appeal. Defendant's motion for a stay was argued at a hearing held Monday, May 23, 1988. At the hearing, defense counsel stated that defendant only sought a stay or modification of that part of the May 17, 1988 injunction applying to wages. Defendant agreed to continue medical insurance coverage of its employees by its former insurance carrier pending appeal. On May 23, 1988, I issued an order nunc pro tunc modifying the May 17, 1988 injunction to compel arbitration and to restrain the defendant only from changing health insurance carriers and benefits.

 The following findings of fact and conclusions of law are made in support of the May 17, 1988 injunction as modified by my order dated May 23, 1988.

 FINDINGS OF FACT

 1. Plaintiff, UAW, is an unincorporated association and a labor organization representing employees in an industry affecting commerce within the meaning of Section 2(5) of the National Labor Relations Act, as amended, 29 U.S.C. § 152(5), with offices located at 8000 East Jefferson Avenue, Detroit, Michigan 48214. (Stipulation of Uncontested Facts, § 1) *fn2"

 2. Defendant, Exide is a Delaware corporation with its corporate headquarters located at 645 Penn Street, Reading, PA 19612. Defendant Exide is an employer engaged in an industry affecting commerce within the meaning of Section 2(2) of the National Labor Relations Act, as amended, 29 U.S.C. § 152(2). (SF, para. 2)

 3. Exide and the UAW are parties to a national collective bargaining agreement covering the terms and conditions of employment of UAW represented employees who work at Exide's facilities in Allentown, Pennsylvania; Burlington, Iowa; Denver, Colorado and Logansport, Indiana. This agreement is effective from April 1, 1987 to April 1, 1990 (SF, para. 3; Joint Exhibit 1) *fn3"

 4. Exide is also a party to a series of local collective bargaining agreements with UAW Locals 1206, 1829, 186 and 84 covering UAW represented employees at the above listed Exide facilities. Each of these local agreements is effective from April 1, 1987 until April 1, 1990. (JE 2)

 5. Each of the local collective bargaining agreements sets forth wage rates for employees in each job classification represented by the UAW and its local union. (See, e.g., JF 2, App. C-1 and C-2)

 6. Exide and UAW are also parties to a group insurance agreement effective from April 1, 1987 until April 1, 1990 covering Exide employees represented by the UAW. (SF, para. 5).

 7. The UAW represents approximately 90 Exide employees in Allentown, Pennsylvania; 140 Exide employees in Logansport, Indiana; 260 Exide employees in Burlington, Iowa; and 15 Exide employees in Denver, Colorado.

 8. During the 1987 national negotiations, the parties orally agreed to an economic reopener in 1988 covering all economic items including wages and insurance coverage. This economic reopener is provided for in the national agreement in Article XIV concerning holidays and Article XXVII concerning the cost of living adjustment. Article XIV states, in pertinent part:

 Article XXVII states, in relevant part:

 
COLA remains suspended at least until the 1988 economic reopener.

 (JE-1)

 9. Article VII of the national collective bargaining agreement contains a no strike clause which provides in pertinent part:

 
Except as otherwise provided in Article VI of this Agreement, neither the Union nor any of the employees will cause or participate in any strikes, slowdowns, or work stoppages; and the Company agrees that it will not cause any lockouts.

 (J-1)

 10. Mr. Jack Sosiak testified at the May 17, 1988 hearing. I found him to be a candid witness and his testimony to be frank and honest.

 11. Mr. Sosiak is Vice-President of Human Resources at Exide and was the company's chief spokesman during negotiations of the 1987 UAW-Exide national collective bargaining agreement.

 12. Mr. Sosiak testified that in 1987 when the company agreed to the economic reopener it intended that the union would have the right to strike and the company the right to implement its last proposal after impasse pursuant to the economic reopener.

 13. Mr. Sosiak also testified that the company never conveyed this intention to the union. In other words, the parties did not discuss the possible consequences of their failure to reach agreement pursuant to the economic reopener.

 14. The parties did not change the no strike clause found in Article VII of the national collective bargaining agreement.

 15. Mr. Sosiak testified further that the Allentown wages were cut because the Allentown plant was losing money, although Exide, as a whole, was profitable in the last fiscal year. According to Mr. Sosiak, Exide changed insurance carriers because Blue Cross/Blue Shield increased its premiums by 52%.

 16. In January, 1988, the UAW and Exide began negotiations pursuant to the economic reopener. Had the parties reached agreement on any economic term pursuant to the reopener negotiations, those terms would have become effective April 1, 1988, unless otherwise agreed. (SF, para. 7)

 17. On January 21, 1988, the parties held their first meeting concerning the economic reopener, at which the UAW presented a written proposal to Exide. (SF, para. 7; see JE-4)

 18. On February 23, 1988, Exide presented its counter-proposal to the union at the parties' second reopener meeting. (SF, para. 8; see JE 5) Both proposals included changes with respect to wages and insurance.

 19. By letter dated March 1, 1988, Exide advised the UAW that if no agreement could be reached, Exide would implement on April 1, 1988 its proposal offered on February 23, 1988, as modified. (JE 6; SF para. 9)

 20. By letter dated March 21, 1988, UAW advised Exide that if no agreement could be reached in the economic reopener negotiations, the UAW would insist that Exide adhere to the provisions of the existing national agreement. (JE 7; SF, para. 10)

 21. The parties again met to discuss the economic reopener on March 28, 1988. As of the conclusion of that meeting, the parties had not reached any agreement on wages, hours or other terms and conditions of employment. Exide advised the union that it considered the negotiations to be at an impasse and it would implement its last proposal on April 1, 1988. (SF, para. 11)

 22. Despite the lack of agreement, Exide implemented certain changes in terms and conditions of employment effective April 1, 1988 including:

 
a. Pensions frozen through March, 1990;
 
b. Welfare benefits frozen through March, 1990;
 
d. Elimination of SUB plan;
 
e. Elimination of payback and security agreement and all money owed under existing payback arrangements;
 
f. Elimination of one day waiting period for sickness and accident benefits granted for out-patient service exceeding $ 25.00;
 
g. Reduction of wage rates of $ 4.35 per hour in Allentown, $ 1.00 per hour in Burlington, $ 2.00 per hour in Denver and $ ...

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