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International Union, United Auto., Aerospace and Agr. Implement Workers of America, UAW v. Mack Trucks

filed: October 18, 1990.

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW
v.
MACK TRUCKS, INC. INTERNATIONAL UNION, UAW, APPELLANT



On appeal from the United States District Court for the Eastern District of Pennsylvania; D.C. Civil Action No. 85-07417.

Hutchinson and Nygaard, Circuit Judges and Re, Judge.*fn*

Author: Nygaard

Opinion OF THE COURT

NYGAARD, Circuit Judge

In its second appearance before this Court as an appellant in this case, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (UAW) appeals the district court's order concluding that Mack did not breach the parties' 1984 Collective Bargaining Agreement and denying the UAW's request for injunctive relief. The UAW challenges this order on three grounds: (1) that the district court was bound by the prior opinion in this case, International Union, UAW v. Mack Trucks, Inc., 820 F.2d 91 (3d Cir. 1987), which the UAW asserts held that the contract was breached; (2) that the contract language is unambiguous and required Mack to seek the UAW's approval of the terms and conditions of health insurance coverage before changing health insurance carriers; and (3) even if the contract language is ambiguous, the court's finding is clearly erroneous.*fn1

We have jurisdiction over the district court's final judgment pursuant to 28 U.S.C.A. § 1291 (West Supp. 1990). The district court had subject matter jurisdiction over this suit pursuant to 28 U.S.C.A. § 1331 (West Supp. 1990) since this case arose under § 301 of the Labor-Management Relations Act of 1947, as amended, 29 U.S.C.A. § 185 (West 1978). We will affirm.

I.

This case involves a dispute over whether Mack could unilaterally change its health insurance carrier from Blue Cross/Blue Shield to Equitable without UAW approval, when the terms and conditions of the substituted coverage remained the same. Before 1984, the Collective Bargaining Agreement between Mack and UAW required that Mack use Blue Cross as its employees' health insurance carrier. By 1984, however, the Blue Cross plan costs had increased significantly, so during the 1984 negotiations, Mack proposed that it be able to unilaterally change carriers. The UAW countered that it would agree only after both parties accepted the terms and conditions of the proposed health insurance coverage.

The UAW's main concern was what the coverage would be, not who provided it. The parties, however, could not agree on the terms and conditions of coverage before the contract expired so they decided on a temporary solution. The UAW made the following proposal:

The terms and conditions of coverage, including those amendments made in these negotiations, are continued on the assumption that the current provider arrangement with Blue Cross/Blue Shield will continue for the term of the labor agreement. The company shall not exercise its option to select an alternate provider until the parties have reached a mutual agreement on the terms and conditions including restrictions, limitations and definitions that would be applicable to any provider other than Blue Cross/Blue Shield.

Mack in turn suggested the following changes: strike "provider" from the first sentence; and change "alternate provider" or "alternate carrier" to "alternate delivery system." The UAW agreed and the provision was changed to read:

The terms and conditions of coverage, including those amendments made in these negotiations, are continued on the assumption that the current arrangement with Blue Cross/Blue Shield will continue for the term of the labor agreement. The company shall not exercise its option to select an alternate delivery system until the parties have reached mutual agreement on the terms and conditions including restrictions, limitations and definitions that would be applicable to any delivery system other than Blue Cross/Blue Shield.

Later, Mack informed the UAW that it was changing health insurance carriers from Blue Cross to Equitable. Equitable would provide the same benefits in the same manner and under the same terms and conditions as Blue Cross. In January 1986, Mack unilaterally switched carriers.

Meanwhile, the UAW filed this action seeking to preliminarily and permanently enjoin Mack from changing carriers. The UAW later withdrew its motion for preliminary injunction and proceeded to a non-jury trial for a permanent injunction. After the UAW presented its evidence, Mack moved for a directed verdict under Fed. R. Civ. P. 50, asserting that the UAW failed to prove both a breach of contract and irreparable harm.*fn2 The district court granted the directed verdict, finding that although the UAW ...


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