The opinion of the court was delivered by: GUSTAVE DIAMOND
A group of employees commenced this action against their employer and their union under § 301 of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 185. This lawsuit constitutes what has become known as a "hybrid" action in that plaintiffs allege (1) that their employer (McGraw Edison and Cooper Industries, Inc., "the company" or "the employer") has violated the terms and conditions of their collective bargaining agreement and (2) that defendants United Steelworkers of America A.F.L.-C.I.O., Local #3968 of the United Steelworkers of America A.F.L.-C.I.O. and Local #6449 of the United Steelworkers of America A.F.L.-C.I.O. (collectively "Union") have violated their federal law duty to represent fairly their members. See Seconded Amended Complaint at P 62.
Specifically, plaintiffs allege that defendants, by signing a May 1988 agreement, violated the terms and conditions of a March 5, 1985, memorandum between Cooper and the Union. Pursuant to the 1985 agreement, which expired on April 1, 1988, the Union made certain wage and benefit concessions to Cooper. Under the May 5, 1988, agreement, Cooper was obligated to make a $ 5,000.00 lump sum bonus to "all employees on the active payroll on March 31, 1988, or by the ratification date if within two months thereafter" as a form of compensation to the employees for making the 1985 wage concessions. Plaintiffs maintain that defendant employer is "unjustly enriched" by virtue of its refusal to pay the $ 5,000.00 lump sum award to each plaintiff. Complaint at P 46. Plaintiffs allegedly are ineligible for the payment because they were either retired or on extended injury leave or on workers compensation leave. That is, plaintiffs were not on the "active payroll" as of March 31, 1988. Defendants interpreted the phrase "active payroll" to mean that employees had to be "actively working" in order to receive the $ 5,000 payment.
Thus, the Union allegedly "breached its duty of fair and adequate representation to plaintiffs and acted in bad faith in negotiating the 1988 memorandum by allowing Cooper to discriminate against plaintiffs due to their age, retirement, sickness, injury, physical impairment and/or lay-off status." Complaint at P 62. Moreover, the Union allegedly violated its duty of fair representation by its bad faith refusal to process the plaintiffs' grievances as provided under the Union's by-laws. Complaint at P 60.
Defendants have filed their respective motions for summary judgment, contending that they are entitled to judgment as a matter of law and that there is no genuine dispute of material fact. The court agrees, and for the reasons set forth below, it will grant defendants' motions.
Collective bargaining agreements govern the terms and conditions of employment for the company's production and maintenance employees (Local 3968) and office and technical employees (Local 6449). These agreements were effective August 10, 1983 and they were originally set to expire on July 21, 1986. The 1983 agreements were modified and extended by a memorandum agreement entered into by the International Union and the company on March 5, 1985. By its own terms, this memorandum terminated on April 1, 1988. The 1985 document resulted from
discussions [between the Company and the Union] involving a request by the Company for a reduction in hourly wage and benefit costs because of the losses incurred at the Canonsburg plant in 1983 and 1984 and which are expected to grow in 1985 and beyond; . . . .
1985 Memorandum at P 1. The 1985 memorandum memorialized certain wage concessions on the part of the employees and it contained a "restoration" provision which provided that a share of the company's profits in a given year would be rolled into the hourly wages of employees for the following year. 1985 Memorandum at P 7. All restoration payments were to be made in the form of hourly wage additives. Consequently, an employee who did not work in a particular year and thus did not receive wages, would not receive any benefit from the restoration payments paid out that year. Snyder Affidavit at P 3. The restoration provision states that the wage additives
shall cease at such time as the amount of concessions has been restored to wages (including roll-up impact) and benefits in the bargaining units or until April 1, 1988, whichever occurs sooner.
In view of the April 1, 1988, deadline, in early 1988 the company and the Union entered into negotiations for a new collective bargaining agreement. Among the counter-proposals was the company's offer to pay a $ 3,000.00 lump-sum payment to active employees as of March 31, 1988; this proposal also provided for health care benefit readjustments. Snyder Affidavit at P 4. The Union rejected the company's proposal. Snyder Affidavit at P 4; Crouse Affidavit at P 2.
Even though the 1985 memorandum expired on April 1, 1988, the company and the Union agreed that the terms of that memorandum would govern the employment relationship pending negotiations for a new agreement. These negotiations produced the 1988 memorandum which was ratified by Local 6449 and Local 3968. The Union achieved its objectives with regard to health benefits and the 1988 memorandum called for "a general wage increase to all employees of seventeen cents at ($ 0.17) per hour retroactive to January 1, 1988" and "a general wage increase of four percent (4%) beginning April 3, 1988." 1988 Memorandum at PP 3, 6. Although the company did not give in to the Union's demands that wage restoration be continued in the new agreement, Snyder Affidavit at P 10, the 1988 memorandum did provide for a lump sum $ 5,000.00 payment for employees on the active payroll on March 31, 1988, or on the date the 1988 memorandum was ratified, provided this occurred within two months of March 31, 1988. 1988 Memorandum at P 2.
In contrast to prior proposals, the 1988 memorandum provided that the lump-sum payment was to be paid "to inactive employees who went on layoff, workers compensation, or A&S [accident and sickness] since January 1, 1988, and who returned to work within calendar year 1988." 1988 Memorandum at P 2. The 1988 memorandum stated that the parties "consider the restoration provisions of March 5, 1985 Memoranda of Agreement to have expired according to its terms on April 1, 1988." Id. Thus the record before the court indicates that after rejecting the Union's attempts to provide for a continuation of the restoration wage additives, the company agreed to a one time lump-sum payment. Snyder Affidavit at PP 10, 11. The record also indicates that during negotiations, the Union and the company explicitly discussed and understood that the proposed 1988 memorandum's reference to employees on the "active payroll" referred to working employees. Snyder Affidavit at P 12.
The 1988 memorandum was submitted to the membership of the local unions on May 24, 1988, and was rejected by both Local 6449 and Local 3968. Snyder Affidavit at PP 12, 13; Crouse Affidavit at PP 14, 15. Before submitting the 1988 memorandum to a second vote, the Union extracted from the company an agreement that the $ 5,000.00 payment would be made to employees on the active payroll on March 31, 1988, or as of the date of ratification, even if beyond two months. Snyder Affidavit at P 16. Accordingly, on June 10, 1988, Local 6449 voted to ratify the 1988 memorandum and on June 20, 1988, Local 3968 voted to accept the 1988 memorandum. Crouse Affidavit at P 6; Snyder Affidavit at P 17. The $ 5,000.00 lump-sum payment was paid to eligible employees on or about June 23, 1988.
Local 3968 discussed the 1988 memorandum at its regular monthly meeting on June 14, 1988, and minutes from this meeting indicate that eligibility for the lump-sum payment was discussed. See Minutes from ...