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Communication Workers of America v. American Telephone and Telegraph Co.

argued: February 19, 1991.


On Appeal from and on Petition for Writ of Mandamus to the United States District Court for the Eastern District of Pennsylvania; D.C. Civil No. 90-0674

Greenberg and Cowen, Circuit Judges, and Clarkson S. Fisher, District Judge.*fn* Cowen, J., Circuit Judge, concurring in part and dissenting in part.

Author: Greenberg


GREENBERG, Circuit Judge

American Telephone and Telegraph Company appeals, invoking jurisdiction under the collateral order doctrine, from orders of the United States District Court for the Eastern District of Pennsylvania of July 27, 1990, and November 7, 1990, in this action involving claims brought against it by the Communication Workers of America (CWA) involving two of the Union's units. The complaint alleged that AT&T had contracted work out to nonbargaining unit employees in violation of its agreement not to do so. AT&T moved for a summary judgment, claiming that the contracting out grievances were not justiciable under the collective bargaining agreement and that determinations in grievance processes concerning the disputes were final.*fn1

The district court denied summary judgment by order of July 27, 1990, as to claims arising from the Business Units division, as it found that they were justiciable. It nevertheless dismissed the complaint insofar as it advanced those claims as they had not been properly pleaded. The dismissal, however, was with leave to amend so that they could be correctly asserted. The district court did not rule on the substantive issue raised by AT&T's motion, i.e. that the grievance determinations were final, as to the other unit involved, the Material Management Service unit (MMS), since it found that the MMS claims were subject to an arbitration exhaustion requirement. It thus dismissed the complaint in its entirety. AT&T then moved for reconsideration but the district court denied this motion by order of November 7, 1990.

In addition to appealing, AT&T has filed a petition for a writ of mandamus under 28 U.S.C. § 1651 asking us to direct the district court to enter judgment in its favor with respect to the Business Units claims. Furthermore, it asks us to direct the district court to vacate its order of arbitrability regarding the MMS claims and to rule on its motion for summary judgment as to those claims. We will dismiss the appeal and deny the petition for mandamus.


The Agreements Between AT&T and the Union

AT&T and the CWA are parties to a National Operations Memorandum of Understanding effective May 28, 1989, through May 30, 1992, applicable to distinct CWA bargaining units by means of separate collective bargaining agreements. The bargaining units involved here, the Business Units and the MMS units, are parties to collective bargaining agreements implementing the Memorandum of Understanding.

The Memorandum of Understanding contains a letter, the Bahr-Williams letter, from Raymond E. Williams, AT&T's Corporate Vice-President of Labor Relations, to Morton Bahr, General President of the International Union, addressing contracting out providing:

Dear Mr. Bahr:

I am writing to respond to the expressions of concern raised at the Operations bargaining table regarding the Company's contracting out of work, which have focused on situations in which a layoff is pending or has occurred (and ex-bargaining unit members retain recall rights) within the same geographical commuting area where the work is to be contracted, and in job titles whose occupants would traditionally have performed such work.

I do not believe that CWA and AT&T have diverse views on this subject.

As to other work normally performed by our employees, we have always preferred not to contract such work out if it would otherwise be performed by bargaining unit employees in job titles in a geographical commuting area (1) where layoffs of such employees are pending; or (2) where a layoff has already occurred and such laid off bargaining unit members retain recall rights and are available to perform such work.

In the future, the Company will not contract out such work, under the conditions outlined above, except when it has no other reasonable alternative. Under such circumstances, the Company will discuss the decision with the Union.

Very truly yours,


The Bahr-Williams letter also appears in the agreement booklets containing the individual collective bargaining agreements. However, the Memorandum of Understanding provided that the Bahr-Williams letter was not part of the agreements:

The following matters [including the Bahr-Williams letter], which have been the subject of negotiations between the parties, are settled and disposed of, and are set forth in this Part II in as much as they are not included in the 1989 Agreement, and although one or more provisions, attachments, or letters may be reprinted in the 1989 Agreement, these matters are not to be considered a part of the 1989 Agreement.

In addition to reprinting the Bahr-Williams letter, the individual agreements addressed other matters relevant to our determination of this case. Article 9 of the Business Units agreement provided:

The Company and the Union recognize and confirm that the grievance procedures set forth in Article 9, and, where applicable, Article 10 (Arbitration) and Article 11 (Mediation), provide the mutually agreed upon and exclusive forums for the resolution and settlement of employee disputes during the term of this Agreement. . . . Neither the Company, nor the Union . . . will attempt by means other than the grievance, arbitration, and/or mediation procedures to bring about the resolution of any issue which is properly subject for disposition through such procedures.

[Emphasis added].

Article 30 of the Business Units agreement, which placed some limitation on AT&T's right to contract out work, explicitly excluded contracting out grievances from arbitration as it provided that "the provisions of this article will be subject to the grievance procedure contained in Article 9, but shall not be subject to the arbitration provisions contained in Article 10." [Emphasis added].

Unlike the Business Units agreement, the MMS agreement did not explicitly address contracting out but Article 18 of the MMS agreement addressed "Movement of Personnel" and provided, in relevant part:

3.1 When lack of work necessitates decreasing the work force, the employees shall be selected as surplus in the inverse order of TERM OF EMPLOYMENT from the classification or occupation affected . . .

Article 18 also set forth the order in which job vacancies were to be filled, calling for them to be filled by "new hires" only if an employee could not be found for the vacancy. Article 10 of the MMS agreement provided, without exclusion of disputes under Article 18, for arbitration of disputes over interpretation of provisions included in the agreement or performance of obligations under the agreement if such disputes could not be solved through the grievance procedure.

Procedural History

On January 29, 1990, CWA and two of its districts brought this action against AT&T under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a),*fn2 for injunctive and other relief with respect to subcontracting practices by AT&T. CWA alleged that AT&T breached the agreement contained in the Bahr-Williams letter in which it agreed not to contract out work normally done by bargaining unit employees in areas where layoffs were pending or had taken place. CWA alleged that it had filed grievances regarding these violations which AT&T denied.*fn3 The complaint stated that the grievance procedure was the" exclusive forum for the resolution of the disputes between the parties," and that "the parties agree that a violation of the Bahr-Williams letter agreement [was] not subject to arbitration under any of the parties' collective bargaining agreements." In its answer AT&T admitted the existence of the Bahr-Williams letter and the collective bargaining agreements and agreed that allegations of violations of the letter were not subject to arbitration but otherwise denied the allegations of the complaint.

AT&T then filed its motion for summary judgment, asserting that the contracting out disputes were not subject to arbitration, and the grievance procedure was the exclusive forum for resolution of the disputes. AT&T therefore urged that CWA could not obtain an adjudication on the merits of its grievances in the district court. In short, AT&T contended that the grievance procedure was the final and exclusive method for resolving disputes over contracting out and that the Union had no recourse beyond the grievance procedure.

By opinion and order of July 27, 1990, the district court denied the motion with respect to the Business Units grievances, holding that it had jurisdiction to hear and decide them on the merits. The court found, however, that CWA should have asserted the Business Units grievances under the collective bargaining agreement, rather than the Bahr-Williams letter. The court then determined that the Business Units agreement expressly excluded contracting out disputes from arbitration, but it concluded that since the Business Units agreement did not explicitly deny the Union the right to a judicial determination regarding its grievances, it had such a right. Thus, the court dismissed the complaint with respect to the Business Units grievances with leave to amend so that the CWA could assert a claim based upon the collective bargaining agreement.*fn4

The district court determined that CWA's claim regarding the MMS grievances implicated the entire collective bargaining agreement, not just the Bahr-Williams letter, and in particular noted that Article 18 of the agreement could be read to limit AT&T's right to contract work out. The court explained that the restriction in the article of "AT&T's right to lay off employees to situations where 'lack of work necessitates decreasing the work force,'" could be read to mean that "AT&T's continuance of the layoff may be unjustified in the event that the laid off workers are qualified to perform the subcontracted work." Further, the court noted that "it may be that AT&T, by [contracting out] the work at issue, has filled a 'job vacancy' with 'new hires' in violation of the hierarchy established by Paragraph 2 [of Article 18 for filling job vacancies]." The court found that the MMS grievances were arbitrable since disputes under Article 18 were subject to arbitration. The court concluded that CWA could not bring suit on its contracting out claims under the MMS agreement until it had exhausted the arbitration procedures. Accordingly, it dismissed the Union's complaint on the MMS grievances, subject to this exhaustion requirement and, therefore, never ruled on AT&T's summary judgment motion regarding the MMS grievances.*fn5

AT&T filed a timely motion for reconsideration of the district court's July 27, 1990, order, urging that judgment should be entered in its favor. In the alternative, it sought entry of final judgment under Fed. R. Civ. P. 54(b) with respect to the MMS grievances and certification for interlocutory appeal under 28 U.S.C. § 1291(b) with respect to the Business Units grievances. The district court denied this motion in a memorandum opinion and order of November 7, 1990.

AT&T filed its notice of appeal on December 7, 1990, and on December 12, 1990, it filed the petition for mandamus seeking an order from this court directing the district court to enter judgment in its favor on the allegations concerning the Business Units agreements. AT&T further asked us to order the district court to vacate its order of arbitrability and decide its summary judgment motion concerning the MMS agreements. CWA then filed a motion to dismiss AT&T's appeal for want of jurisdiction. On December 18, 1990, we ordered the appeal (No. 90-1950) and the petition for mandamus (No. 90-1936) consolidated and we now address both the appealability of the district court's order and AT&T's petition for mandamus.


This court exercises appellate jurisdiction under 28 U.S.C. § 1291 only over final orders of the district court. Usually a decision is final within section 1291 when it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Van Cauwenberghe v. Biard, 486 U.S. 517, 521, 108 S. Ct. 1945, 1949, 100 L. Ed. 2d 517 (1988) (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S. Ct. 631, 633, 89 L. Ed. 911 (1945)). Here, the district court's order would ordinarily not be regarded as "final" under 28 U.S.C. § 1291 for the court dismissed CWA's complaint as to the Business Units grievances with leave to amend. See Newark Branch, N.A.A.C.P. v. Harrison, N.J., 907 F.2d 1408, 1416-17 (3d Cir. 1990). Thus, the order rather than ...

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