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Brnusak v. Allegheny Ludlum Corp.

July 6, 2006

ANTHONY H. BRNUSAK, PLAINTIFF,
v.
ALLEGHENY LUDLUM CORPORATION, GERALD MOSER, AN INDIVIDUAL, THE UNITED STEELWORKERS OF AMERICA, ALLEGHENY TECHNOLOGIES INC. PENSION PLAN, DEFENDANTS.
THERESA POWELL, PLAINTIFF,
v.
ALLEGHENY LUDLUM CORPORATION, GERALD MOSER, AN INDIVIDUAL, THE UNITED STEELWORKERS OF AMERICA, ALLEGHENY TECHNOLOGIES INC. PENSION PLAN, DEFENDANTS.
JOSEPH DANIELS, PLAINTIFF,
v.
ALLEGHENY LUDLUM CORPORATION, GERALD MOSER, AN INDIVIDUAL, THE UNITED STEELWORKERS OF AMERICA, ALLEGHENY TECHNOLOGIES INC. PENSION PLAN, DEFENDANTS.
ROBERT MIHALOVICH, PLAINTIFF,
v.
ALLEGHENY LUDLUM CORPORATION, GERALD MOSER, AN INDIVIDUAL, THE UNITED STEELWORKERS OF AMERICA, ALLEGHENY TECHNOLOGIES INC. PENSION PLAN, DEFENDANTS.



The opinion of the court was delivered by: David Stewart Cercone United States District Judge

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiffs, Anthony H. Brnusak ("Brnusak"), Theresa Posell ("Powell"), Joseph Daniels ("Daniels"), and Robert Mihalovich ("Mihalovich")(collectively "Plaintiffs") initiated these related actions against Defendants, Allegheny Ludlum Corporation ("Allegheny Ludlum"or "Ludlum"), Gerald Moser ("Moser"), Allegheny Technologies Inc. Pension Plan (the "ATI Plan")(collectively the "Ludlum Defendants"), and the United Steelworkers of America (the "USWA" or the "Union"), alleging several claims which arise out of an agreement entered into between Allegheny Ludlum and the USWA, and are related to the recall of former Bethlehem Steel Corporation ("Bethlehem Steel") workers at the Bethlehem Steel's former Washington Flat Roll facility.

In their Amended Complaint, Plaintiffs allege the following: (1) violation of the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. By the Ludlum Defendants*fn1 ; (2) breach of the collective bargaining agreement by the Ludlum Defendants; (3) claim in quasi contract against the Ludlum Defendants; (4) action in tort against the Ludlum Defendants; and (5) breach of duty of fair representation against the Union*fn2 . Plaintiff Brnusak filed a motion for partial summary judgment against the Ludlum Defendants on Count II, breach of the collective bargaining agreement. Both the Union and Ludlum Defendants have filed motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.

II. STATEMENT OF THE CASE

In late 1999, Allegheny Ludlum began negotiations to purchase certain assets from Bethlehem Steel, including Bethlehem Steel's Flat Roll plant located in Washington, Pennsylvania (the "Flat Roll" or "Washington Flat Roll") . Ludlum Exhibit A, Scarfutti*fn3 Deposition (hereinafter "Scarfutti Dep.") p. 26. As part of those negotiations, Allegheny Ludlum and the USWA worked to establish the terms by which former employees of the Bethlehem Steel Flat Roll plant, and members of the local USWA, could become employees of Allegheny Ludlum. Scarfutti Dep., pp. 26-30. In or around November of 1999, the USWA and Allegheny Ludlum reached a tentative agreement (the "1999 Agreement") which was ratified by vote of Local 7139 of the USWA. Ludlum Exhibit B; Ludlum Exhibit C*fn4 , Brnusak Deposition (hereinafter "Brnusak Dep.") p. 23; Ludlum Exhibit D, Armstrong*fn5 Deposition (hereinafter "Armstrong Dep.") p. 43.

The 1999 Agreement offered former Bethlehem Steel employees preferential hiring rights at two of Allegheny Ludlum's existing facilities, the plant in Houston, Pennsylvania (the "Houston Plant") and the Plate Mill facility in Washington, Pennsylvania (the "Plate Mill" or "Jessop Plate Mill"), as well as at the Washington Flat Roll. Scarfutti Dep., p. 84; Plaintiff's Exhibit A, Affidavit of Paul Allen, Jr.*fn6 (hereinafter "Allen Aff.") ¶ 7; Plaintiff's Exhibit C, Affidavit of J. Roy Murray*fn7 (hereinafter "Murray Aff.") ¶ 7. The Union negotiators viewed the preferential hiring right at all three of Allegheny Ludlum's facilities as especially important to the membership as it would benefit members who did not have either the skills or the seniority to be hired at Flat Roll. Murray Aff. ¶ 7; Allen Aff. ¶ 7. Moreover, the language was so critical to the USWA that the parties agreed that the USWA would draft the "Hiring Procedure" portion of the 1999 Agreement. Affidavit of John F. Scarfutti (hereinafter "Scarfutti Aff.") ¶ 10; See also Exhibit B to Scarfutti Aff. at ATI 00544.

The recall of former Bethlehem Steel employees was governed by the "Hiring Procedure," Attachment 2 to the 1999 Agreement, as set forth below in relevant part:

2) [Allegeny Ludlum] contacts all former [Flat Roll] employees to determine their interest in returning to work under the conditions of this agreement.

* Limited time to decide

* One time only. If they say "NO" to a hiring opportunity at the Washington Facility, they will be removed from all preferential hiring lists. Should a vacancy first occur at either the Houston or Jessop facilities, the employee may refuse either or both and still retain preferential hiring rights to Washington.

* [Allegheny Ludlum] will provide "non-respond" list to USWA after 2 weeks. USWA has 1 week to follow-up. Thereafter, "non-responders" lose all rights.

Ludlum Exhibit B. The Union negotiating team distributed the 1999 Agreement to the Union membership at a ratification meeting and explained the Agreement to them. Allen Aff. ¶ 8. The negotiating team explained to the membership that, pursuant to the 1999 Agreement, if Allegheny Ludlum offered them a job at either the Houston plant or Jessop Plate Mill, the member could refuse the job and maintain preferential hiring rights at Flat Roll, but if the member accepted the position, the member would become a new hire with Allegheny Ludlum and would lose their preferential hiring rights at Flat Roll, as well as any credit for service at Flat Roll and its attendant seniority rights. Allen Aff. ¶¶ 7 and 9; Murray Aff. ¶ 7. The preferential hiring right was a "one time" offer only, and once a former Bethlehem Steel employee accepted any offer of employment from Allegheny Ludlum, he forfeited all preferential hiring rights. See Scarfutti Aff. ¶ 8; Murray Aff. ¶ 7. The Union membership ratified the 1999 Agreement. Allen Aff. ¶ 9.

The 1999 Agreement provided only preferential hiring rights to the former Bethlehem employees. Scarfutti Dep. pp. 81-83; Ludlum Exhibit E, Moser Deposition (hereinafter "Moser Dep.") p. 66-67. Because the former Bethlehem Steel employees were not employees of Allegheny Ludlum until they accepted a job at one of Ludlum's three facilities, they were not covered by any collective bargaining agreement. Scarfutti Dep. p. 88. Any rights beyond the preferential hiring rights, therefore, would be covered by the collective bargaining agreement in force at the facility for which the former Bethlehem Steel employee accepted a position. Scarfutti Dep. p. 91.

If an employee was recalled to the Flat Roll plant, however, even though the employee was a new Allegheny Ludlum employee, such employee's seniority would include the time of service under Bethlehem Steel for purposes of vacation accrual, job bidding etc. Ludlum Exhibit B, Attachment 3; Moser Dep. p. 77. None of the rights referenced in Attachment 3 of the 1999 Agreement, however, accrued until the employee accepted a position and began work at the Flat Roll. Scarfutti Dep. pp. 80-81; Moser Dep. pp. 69-71. Once the employee began work at Flat Roll, such employee became covered by the collective bargaining agreement in place for the Flat Roll facility, the "Orange Book." Scarfutti Dep. pp. 81-83; Moser Dep. pp. 69-79.

Pursuant to the 1999 Agreement, former Bethlehem employees, including Plaintiffs, were contacted and asked if they wanted to be considered for employment by Allegheny Ludlum. Ludlum Exhibit B, Attachment 2; Moser Dep. p. 60. Allegheny Ludlum compiled the responses and, together with the USWA, created a list of former Bethlehem employees (the "Recall List") to be called when new or additional hiring was needed at one of Ludlum's three facilities. Plaintiffs responded affirmatively and were put on the Recall List.

Anthony Brnusak

In January 2000, Gerald Moser, Allegheny Ludlum's labor relations manager, contacted Brnusak and offered him a position at Ludlum's Houston Plant. Brnusak Dep. pp.64-65. Moser testified that he explained to everyone he contacted on the Recall List that if they accepted a job at the Houston Plant they would be removed from the Recall List, and lose all recall rights to Flat Roll. Moser Dep. pp. 51-52. Moreover, when asked, Moser explained that former Bethlehem Steel employees would forfeit all seniority rights, including pension, vacation and SUB pay rights, and would begin as a new hire if the employee accepted a position at either the Houston Plant or Plate Mill. Armstrong Dep. pp. 69-70. Brnusak testified that he refused the position offered at the Houston plant because he was waiting for recall to Flat Roll. Brnusak Dep. pp. 64-65; Ludlum Exhibit I, p. 4. In accordance with the Agreement, Brnusak remained on the Recall List.

In April of 2000, Moser contacted Brnusak and offered him a position at the Plate Mill. Moser Dep. pp. 46-48; Brnusak Dep. pp. 70-71. Moser testified that every one he contacted with regard to positions at the Plate Mill were told that if they accepted the position at the Plate Mill, they would lose all recall rights to Flat Roll. Moser Dep. pp. 26-27, Armstrong Dep. pp. 65-71. Brnusak was given approximately three (3) weeks to consider the offer. Brnusak Dep. pp. 31, 54. During this period, Brnusak had several conversations with Armstrong regarding his employment prospects at Flat Roll. Brnusak Dep. pp. 34-36. After speaking with Armstrong, Brnusak was aware that he would be a new hire with Ludlum if he accepted the position at the Plate Mill. Brnusak Dep. p. 36. In fact, Armstrong was also offered a position at the Plate Mill, and he specifically asked Moser how such a hire would affect his seniority, pension, vacations, etc. Armstrong Dep. pp. 65-72. Moser answered every question and made the offerees aware that they would forfeit all pension and seniority rights if they accepted the position at the Plate Mill. Id.; Moser Dep. pp. 48-49.

After considering all the factors, Brnusak accepted the position at the Plate Mill as a new hire of Allegheny Ludlum. Brnusak Dep. p. 60. In accordance with the 1999 Agreement, he was removed from the Recall List and began training for his new position on May 1, 2000. Brnusak Dep. p. 54. Shortly thereafter, Brnusak contends that Ludlum began recalling former Bethlehem employees to Flat Roll. Brnusak Dep. pp. 87-90. Though Brnusak was unhappy working at the Plate Mill and wanted to return to Flat Roll, he had exercised his preferential hiring rights and was no longer on the Recall List. Ludlum Exhibit I. ...


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