# Petition — General Warehousemen & Helpers Local 767 v. Standard Brands, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_2517%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 441 U.S. 957 ## Text | FILED ;4 If Supreme Coust, U. a | FEB 21 1979S! : 5 a) he Sd IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1978 GENERAL WAREHOUSEMEN AND HELPERS LOCAL 767, Affiliated With the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Petitioner, VS. STANDARD BRANDS, INC., Respondent. PETITION FOR WRIT OF CERTIORARI To the United States Court of Appeals for the Fifth Circuit DAVID PREVIANT 6th Floor, Midland Bank Building 211 West Wisconsin Avenue Milwaukee, Wisconsin 53203 L.N.D. WELLS, JR. G. WILLIAM BAAB 8204 Elmbrook Drive, Suite 200 Dallas, Texas 75247 214/620-3672 Attorneys for Petitioner MULLINAX, WELLS, BAAB, CLOUTMAN & CHAPMAN, P.C. Of Counsel January, 1979 St. Louis Law Printing Co., Inc., 812 Olive Street 63101 314-231-4477 a INDEX Page eee aaa e sk osha en es ek ec recosee 1 Sec hea Aide ab be Ges 564 ces vecdceses 2 EE Ee 2 oo” Eee ae 3 Cc Gb becerscccccccccsseccss 4 Reasons for Granting the Writ ................22005. 12 eae ab ae ken 06> o's 2 id 19 CCE SCs ace e Nh 6 pebachcesesuecce A-1 to A-109 INDEX TO APPENDIX Arbitrator’s Opinion and Award, (9/20/75) .......... A-1 District Court’s Findings of Fact (10/16/75) .......... A-46 SN UE ROP TED occ cesses sccesens A-50 we TS le ae A-51 CER C ewe b oes 6.06664 vb es coeses A-54 Opinion of Court of Appeals—Reversing District Court (10/11/77); 560 F.2d 700 Dissent 560 F.2d at — ... .A-55 En Banc Opinion of Court of Appeals (9/15/78), — F.2d EE a De cdc ccc ces secccessceees A-75 Order denying Rehearing (12/28/78) ............... A-104 ee tad beh bee's ess ov ssecseces’s A-105 NLRB General Counsel’s Memorandum re IAM With- drawal of Charge, 1976-77 CCH NLRB 420,020 at p. RES Se ae A-105 Cases Cited Carey v. Westinghouse, 375 U.S. 261 (1964), 11 L.Ed. EN is bk 46 5 WRN EV eV on AMEE TAR IANS CRETE WOES 16 Statutes Cited BE Ss Eh REED NSS weed udeeeeureeescedeose's 2 Oe a ek re ere rire 10, 19 SE EE Deas ov Ga deecidseveangeuiexsats 3 fa | eee eee EERE ORT eee 3 Be Reece S BOD OP GIG bv cecv tease reccewveess 4,10 Other Authorities “Business Loves the Sunbelt (and Vice Versa)” Fortune, SUD IF Fs OR. TIRES oc eve vcicevccseccesecs 13 Committee on Education and Labor, House of Represent- atives, on H.R. 76, the National Employment Priorities Ast, Aipeh, Gile, BEte D, WGTS. i vk ccccsccenctees 14 Dallas Times Herald, January 21, 1979 .............. 14 “Employees' on Manufacturing Payrolls, by Region and State, 1967-75,” Handbook of Labor Statistics ........ 14 Hearing before the Subcommittee on Labor Standards on the National Employment Priorities Act at p. 73 ..... 12 Maurice Fulton, New Factors in Plant Location, 49 Harv. Bus.Rev. 4, 5-6 (May-June 1971) ............005. 14, 15 “Plant Relocation: Catching Up With the Runaway Shop,” XIV Boston College Law Rev. 1135-1169 (1973) ....12, 18 Rifkin & Barber, The North Will Rise Again, Beacon me ET rer ers Te eee eee 12 Scheinkman, “Plant Removal Under the National Labor Relations Act,” 16 NYU Conf.Lab. 81 (1962) ...... The Law of Contracts, Baker Voorhis & Co., New York, ee we eehae “The Second War Between The States, Bitter Struggle for Jobs, Capital, and People,” Business Week, May 17, a PRE SA Piet a oe a TO oe ae 18 17 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1978 rere GENERAL WAREHOUSEMEN AND HELPERS LOCAL 767, Affiliated With the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Petitioner, VS. STANDARD BRANDS, INC., Respondent. PETITION FOR WRIT OF CERTIORARI To the United States Court of Appeals for the Fifth Circuit Petitioner, General Warehousemen and Helpers Local 767, affiliated with International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America (“Teamsters”), respectfully prays that a writ of certiorari issue to review the judgment and opinion of the United States Court of Appeals for the Fifth Circuit entered in this proceeding on September 15, 1978. OPINIONS BELOW The findings, opinion and award of the arbitrator, Professor Charles J. Morris, are unreported. They are reproduced in the Appendix at p. A-1 through p. A-45. ws aoe. enn The unreported findings, conclusions, and order of the United States District Court for the Northern District of Texas, denying enforcement of the arbitral award are reproduced in the Appendix at p. A-46 through p. A-53. The original opinion of the Court of Appeals for the Fifth Circuit, rendered October 11, 1977, enforcing the arbitral award is reported at 560 F.2d 700. It is reproduced in the Appendix at p. A-55 through p. A-70. The dissent appears at p. A-70 through p. A-73. The en banc opinion of the Court of Appeals for the Fifth Circuit, rendered September 15, 1978, affirming the District Court’s denial of enforcement of the arbitral award, and re- manding to the District Court, is as yet unreported. It is re- produced in the Appendix, Majority Opinion p. A-75 to p. A-99; Dissent p. A-99 to p. A-103. JURISDICTION The order of the Court of Appeals for the Fifth Circuit refusing Petitioner's Motion for Rehearing was entered Decem- ber 28, 1978, and this petition for certiorari is being filed within ninety (90) days of that date. This Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). QUESTIONS PRESENTED This case presents questions as to the availability of specific performance to enforce an arbitral award requiring an employer to permit employees to transfer to a new plant at established wages without loss of seniority. The specific questions are: 1. May an employer who violates a collective bargaining agreement (which provides that covered employees may follow ey es their work to a new plant) avoid specific performance of the collective bargaining agreement by contracting with another union at substandard wages and conditions to cover the work at the new plant? 2. Does the arbitral award unlawfully infringe upon the self-organization rights of the employees at the new plant to the extent that the award must be denied specific enforcement, either: (a) as in conflict with the agreement between the em- ployer and another union, executed during the pendency of the arbitration, and providing lesser wages and conditions at the new plant? or, (b) as in conflict with NLRB certification of the other union, based upon an election at which only the new employees were allowed to vote? 3. Did the Court of Appeals err in limiting damages to those incurred during the contract term; and in refusing specific per- formance when the IAM contract and certification terminated? STATUTORY PROVISIONS INVOLVED Pertinent provisions of the Labor Management Relations Act of 1947, as amended, are: 29 U.S.C. § 173(d) which declares a national policy that: “(d) Final adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective bargaining agreement.” 29 U.S.C. § 174 “. . . employers and employees and their representatives in any industry affecting commerce shall—(1) exert every reasonable effort to make and maintain agreements concerning rates of pay, hours and working conditions . . .” or ce 29 U.S.C. § 185 (a) and (c), set out in the Appendix, (p. A-105) provides federal jurisdiction of suits for violation of contracts between an employer and a labor organization. STATEMENT OF THE CASE This action was brought under §301(a) of the Labor Man- agement Relations Act (29 U.S.C. §185(a)), by Petitioner (herein “Teamsters”) to enforce a labor arbitration award against Standard Brands, an employer, party to a Dallas, Texas, collective bargaining agreement. The arbitration process was, as the courts below found, “regular and has been pursued in accordance with the provisions of a collective bargaining agree- ment.”! The arbitration findings and award (App. pp. A-1-A-45) con- cern the opening of a new Standard Brands margarine plant in Denison, Texas, and the closing of an existing margarine plant in Dallas, Texas. The Dallas plant had long been represented by Teamsters, and the collective bargaining contract there, as the Court of Appeals found, contained provisions protecting the rights of the employees if the Dallas operations should be “transferred permanently to a new plant. . .”. Standard determined, prior to 1974, to build a new plant in Denison, some 75 miles from Dallas. When Dallas employees, uneasy that their jobs were in jeopardy, sought assurance that Standard would not eliminate Dallas jobs or transfer Dallas operations to Denison, they were repeatedly assured that the Dallas operations would not be affected. Actually, Standard then intended to—and later did—close the Dailas plant. With- out detailing all that is found in the arbitrator’s lengthy deci- 1 The pertinent provisions of the Dallas collective bargaining agreement are set out in the arbitrator’s decision at pp. 3 to 8 of the Appendix to this Petition. See footnote 1 to the majority decision, en banc, below, App pp. 77 to 78, infra. inh ais sion (App. p. A-1 to p. A-45) it is clear (as the arbitrator found and as the courts below accept?) that Standard “intended to operate Denison non-union, and it especially tried to operate it without the Teamsters Union and its contract.”* The Denison plant opened in the fall of 1974. Teainsters’ written request for transfer rights as provided in the Dallas contract was ignored; Teamsters filed a grievance which as- serted that the operation of the new plant would result in the closing of the old one—and requested, in that event, the protection of the Dallas employees as provided in their con- tract.* The Dallas plant actually closed October 1, 1975. Mean- while, the Teamsters’ grievance, denied by Standard Brands, was submitted to the arbitrator, who after two hearings and a plant inspection, issued the opinion and award which is the subject of this litigation (App. 1-54). The arbitrator found that Standard had engaged in a series of specified violations of the Dallas collective bargaining agree- ment, that Standard’s actions had been designed to assure op- eration of the Denison plant “non-union” and had resulted in “discrimination against the Dallas employees because of their Teamsters Union membership.” The arbitrator further specifically found Standard to have violated that section of the collective bargaining agreement which had assured the Dallas employees the right to fill jobs at the Denison plant.® 2 App. p. 41, infra; 560 F.2d 701 (Sth Cir. 1977). * Arbitrator’s Opinion, App. p. 42, infra. * See contract provisions displayed in the arbitrator’s Opinion, App. pp. 3-8, infra. ® See Arbitrator’s Opinion, App. pp. 41 to 42, infra. parte yee While the Teamsters’ claim was pending in arbitration Stand- ard agreed with another union (IAM), over Teamsters’ objec- tion, for NLRB to conduct an election at Denison. The elec- tion agreement permitted only the newly hired Denison employees to vote. IAM won the election,® was certified by NLRB, and in less than a month fror: the certification Standard had signed a contract with IAM covering the Denison plant providing wage rates “significantly lower than comparable rates in the Dallas Teamsters agreement.”* Having found gross violation of the Teamsters collective bar- gaining agreement, the arbitrator sought to remedy the viola- tions, and at the same time not to intrude upon the rights of the newly hired Denison employees. The arbitrator accordingly wrote; App. p. 42, infra: What is an appropriate remedy? I have tried to balance the contract rights of the Dallas employees with the in- terest of the present Denison employees who are wholly innocent in this proceeding. Had the Company not vio- lated the agreement initially, the Teamster’s Union, prob- ably under the same contract, would most likely be the bargaining representative of the Denison employees, who would. have been mostly former Dallas employees—the record indicates that most of them would have accepted transfer. I will not so order, however. Nor will I order the Company to displace any present employee. As well as violating other provisions, the Company did violate the contractual counterpart of Section 8(a)(3) of the National Labor Relations Act, for which affected employees would 6 Standard advised NLRB in late 1974 that “the Denison plant is fully staffed,” although it only had 26 employees there, and several major manufacturing lines were yet to be started up. Arbitrator’s Opinion, App. p. 36, infra. * Arbitrator’s Opinion, App. p. 37, infra. a. oa be entitled to be made whole as to their losses. So far, however, there have been no losses; what we are con- cerned with are future rights and the avoiding of losses. Accordingly, subject to the limitations noted below, I hold that all Dallas employees who desire to transfer may do so and that they will acquire new seniority based upon the first working day at the Denison plant (a day in late October, 1974, as described hereinabove), and their rela- tive same seniority date) will be based upon length of service with the Company. The Company will be required to provide suitable employment at the Denison plant, be- ginning the first regular work day following the termina- tion of their employment at the Dallas plant, to as many of those Dallas transferees as are required for the opera- tion of stick or bulk margarine operations,[*) provided, however, that such operation shall include at least two lines using Benhil equipment or the equivalent. If ad- ditional operations are added, such as Morpak lines, with or without whipped or bulk margarine production, any Dallas employees not otherwise assigned will be assigned to these jobs before employment is offered to anyone else. And if vacancies o.cur in other production or maintenance jobs at the Denison plants, such jobs are to be filled by Dallas transferees, so long as they are available and quali- fied to do the work. If there are any persons from the Dallas plant desiring to transfer in excess of those required for the aforesaid jobs, such persons shall be placed on a preferential hiring list and shall have the rights of em- ployees on permanent layoff under the contract herein. It is recognized that the addition of these several manu- facturing lines and newly transferred employees will ma- terially alter the bargaining unit at Denison and that % As made clear earlier in the arbitral decision, Dallas employees had been manufacturing stick and bulk margarine. (Arbitrator’s Opinion, App. p. 11, infra). eventually the NLRB will have to determine the resulting questions concerning representation. Until that time, how- ever, the provisions of the present Teamsters contract will govern the compensation and other benefits of the em- ployees performing work of the same nature as the Dallas operations. Such contract, however, will not govern any other job in the plant even though such job may be filled by a Dallas transferree, for such job would legically be covered by the IAM contract. The parties are further required to appoint their represent- atives under Part I, Section (j) as promptly as possible for the purpose of implementing transfer and related rights provided by Section 13, as interpreted by this Award. I shall retain jurisdiction over the parties and subject matter of this grievance pending compliance with this award. IAM challenged the transfer and seniority provisions of the award by charges before NLRB. Prior to trial of the charges IAM withdrew them. The withdrawal was with the consent of the General Counsel of NLRB, recorded in an opinion pub- lished at 1966-67 CCH NLRB 4 20,020 at p. 32,030 App. pp. 105-109, infra. Teamsters filed this action to enforce the award, the Dis- trict Court denied enforcement on the ground “that the arbi- trator exceeded the scope of his authority since his award is in conflict with the NLRB’s certification of the LAM in Denison.”® The majority of the Fifth Circuit panel which first heard the appeal (Judges Tuttle and Wisdom) noted that the “arbitration decision has passed one test before the NLRB,” in that [AM’s challenge by unfair labor practice charge of the propriety of “bumping” Denison empioyees by transfer from Dallas was % App. p. 47, infra. =— withdrawn—with formal opinion from the NLRB General Counsel (560 F.2d 704, App. p. 62, infra) which the Court noted, viz: “The NLRB Division of Advice concluded that the Ma- chinists should be permitted to withdraw the charge. One basis for the Division of Advice’s reaction was the Ma- chinists’ desire to drop the matter. But the Division also commented that “the Employer’s actions in transferring a Dallas employee to Dennison [sic] and applying Dallas seniority to him were considered to have been in compli- ance with, and therefore privileged by the arbitration award .. .”1° Judge Coleman, in dissent, 560 F.2d 709, App. p. 70, infra, said that the “true issue is whether the District Court abused its discretion when it denied enforcement”; he viewed the Union's 10 The majority opinion of the Circuit Court panel goes on to ob- serve at 560 F.2d 704, App. p. 62, infra: “The same NLRB memorandum, however, appears to question the propriety of the award’s extension of Dallas contract terms to Denison. The memorandum only approved of the award ‘as modified’—an apparent reference to the decision by the district court not to enforce the application of the Teamster contract at Denison. Moreover, the Division comment that ‘If the Circuit Court is being asked by the Teamsters to apply other provisions of the Teamster contract to the Denison em- ployees so that the Machinists’ certification rights would be undermined, the Machinists may wish to seek Board interven- tion. Such a request would be forwarded to the Division of Litigation.’ Id., at n.8. Had the Board appeared in our case, its views would have re- ceived careful consideration . . . It is one thing for a court to refuse to enforce an arbitration award when the NLRB protests that enforcement would impair Board processes. It is another to ‘protect’ the Board’s processes when no unfair labor practice charge is presently pending and no request for a stay of enforce- ment has been heard from the Board. == 10 — actions as “merely attempts to subvert the NLRB order” (sic)"? regarding “the proper bargaining unit”'*; and he urged that effectuation of the award “would result in an unfair labor prac- tice in violation of §158(a)(1,3) of the National Labor Manage- ment Rel<*‘ons Act.” (App. p. 72). Standard’s Motion for Rehearing en banc was granted, and on rehearing the majority, now speaking through Judge Cole- man, the original dissenter, held: “|. that the remedy prescribed by the arbitrator re- quired the employer to violate the terms of another of its collective bargaining agreements with a bargaining unit'** duly certified by the National Labor Relations Board.” (App. p. 76 emphasis added). The en banc majority stated the issue (erroneously, in our view) at App. p. 89, infra: “ . whether a federal district court can enforce the remedial provisions of an arbitration award which would require the employer to violate the terms of another col- lective bargaining agreement.” and defined “the nub of the dispute” as “if the Court directs en- forcement of the arbitrator’s award it may be affirmatively causing the employer to be ordered to commit an unfair labor practice under 29 U.S.C. §158(1).1* This cannot be done” (App. p. 90, infra, emphasis added). Ostensibly eschewing a direct holding that to enforce the award is to require the employer to commit an unfair labor 11 Actually, no NLRB “Order” was ever sought—much less—is- sued. Presumably, Judge Coleman refers to the IAM “certification. 12 and 128 Presumably, Judge Coleman means bargaining “agent”. 13 In dissent, in panel, Judge Coleman had also argued §158(a)(3) was violated. The en banc opinion, at footnote 7, eschews any deter- mination as to §8(a)(3) violation. a practice, the en banc majority holds “that the award was re- pugnant to the NLRA, and [we] accordingly affirm the District Judge...” (App. p. 93, infra). In short, the en banc majority views the arbitral award as (1) requiring Standard to violate its contract with IAM, and (2) as requiring Standard to take action which the Court viewed as “repugnant” to the NLRA.”!4* Five judges'® joined in dissenting, for in their view the award does not conflict with the NLRB certification of the IAM, nor does it require Standard to violate the terms of its agreement with the IAM (App. p. 99, infra) .1°* 14 The en banc majority holds at App. p. 93, infra, that: “Unions are vitally concerned, and properly so, with their right to bargain over wages, benefits, seniority and working condi- tions. Section 9(a) of the NLRA expressly recognizes such a right for a union if it is certified by the NLRA. If a contract or an arbitration award conflicts with that policy, the statutory policy must prevail. We think that a contract specifying that an employee transferring to another plant operated by the same employer would continue to receive the same wages and bene- fits that he received at the old plant, despite the existence of a contract with another union at the new location would be un- enforceable. It necessarily follows that an arbitration award poo seeks to achieve the same impermissible result cannot be enforced.” 4* Yet significantly, the Court did not itself hold that by taking the action required by the award it would commit an unfair labor practice. The majority, in agreement with the dissent recognized that as a function of NLRB—not the Court. 19 Tuttle, Wisdom, Goldberg, Rubin and Vance. *5* On June 9, 1978, upon expiration of the IAM contract with Standard Brands in Denison, the NLRB conducted another election. In this election IAM received only one vote, the Teamsters received fifty-two votes, and thirty-four votes were cast for no union. Com- pany objections to the election have delayed certification of the Teamsters as the collective bargaining agent. A motion for rehearing en banc presented the facts of this election to the court. The court denied the motion without opinion. App. p. 104, infra. —_, REASONS FOR GRANTING THE WRIT l The importance of the questions hete presented comes in focus when the holding of the Court of Appeals is considered in the context of the plight of workers, their unions, and the economies of the North and Midwest from which their em- ployers are moving to the “Sunbelt,” or to rural locations. As the Court of Appeals wrote at App. p. 95, infra: “The movement of plants from one location to another, the transfer of functions between plants, and the movement of workers between plants are subjects of vital concern for both labor and management. Employees are interested in continuity of employment, income, and seniority rights. Employers, on the other hand, need flexibility to respond to competitive forces and to increase efficiency. Such agree- ments are important, perhaps necessary, features of the modern mixed economy and are entitled to be respected.” Accordingly, “. . . contractual provisions such as those at issue in this case have become a common feature in collective bargaining agreements nationwide.”'® They have long been regarded as .a necessity in protection of employees against un- scrupulous employer undercutting of their union wages and conditions.'7 See, “Plant Relocation: Catching Up With the Runaway Shop,” XIV Boston College Law Rev. 1135-1169 (1973). Mobility of industry in this age is a commonplace. Move- ment from the industrial (and organized) North to the Southern 16 Majority en banc opinion App. p. 95, infra. 17 Hearing before the Subcommittee on Labor Standards on the National Employment Priorities Act at p. 73. See also; Rifkin & Barber, The North Will Rise Again, Beacon Press, (1978). ae (and unorganized) “Sunbelt” is increasing. Major changes in plant locations have occurred in the last decade—and further changes are imminent. Responsible publications proclaim that there is a veritable reshaping of the demographic and economic map of the nation. See “Business Loves the Sunbelt (and Vice Versa)” Fortune, June 1977; pp. 132-146; and “The Second War Between The States, Bitter Struggle for Jobs, Capital, and People,” Business Week, May 17, 1976, p. 92 ff.18 Or as the testimony before a Congressional Committee recently revealed: “Here is a company that built a billion dollar corporation because of the sweat, tears, and muscles of the Akron employees. They have expanded to almost every State in the Union, even to most foreign countries, and yet they cut jobs from the very plant that gave them its beginning. It’s sort of sad, isn’t it, Mr. Chairman? Here is a company that over the years has not only raped the natural resources of the community: The water, the air and the land, and yet even the citizens, and has never really paid for its fair share. Here is a company that really feels it has the *8 “As long as the migration of industry and population was gradual from what was a relatively rich Northeast to what was a relatively impoverished South and Southwest, it helped to unify the nation. But within the past five years the process has burst beyond = bounds that can be accommodated by existing political institu- ons. Less than three years ago, the Commerce Dept.’s Bureau of Eco- nomic Analysis published projections for 1980 and 1990 of the population, personal income, and employment in each of the 50 states—Arkansas, Louisiana, Mississippi, South Carolina, Arizona, Texas, ‘Utah, Alaska and Hawaii—had already exceeded their 1980 Projections in population, and one state—New Mexico—had already surpassed the 1990 figure. By the same token, the shortfall in slower- growing regions has been enormous. For example, New York was expected to grow by 1.1 million people from 1970 to 1980, but thus far the state has lost more than 100,000. Pennsylvania, slated to ” nearly 800,000 during the 1970s, has increased its population y barely 30,000 thus far. This is virtually the same growth posted by Illinois, where the BEA expected a rise of nearly 900,000.’ —_ en right to destroy the families of thousands of its employees simply by saying, ‘We are moving on.’ ”?® In the past decade there have been two trends in plant reloca- tion. Companies have moved from the north to the south and from the cities to the suburbs, and now to small towns. (For statistics on movement from north to south see Table entitled “Employees on Manufacturing Payrolls, by Region and State, 1967-75,” Handbook of Labor Statistics, for numbers on urban- rural movement see Maurice Fulton, New Factors in Plant Location, 49 Harv.Bus.Rev. 4, 5-6 (May-June 1971).?° As the industrial migration continues the rural South will for sometime provide a large pool of inexperienced and willing labor, abundant land, tax concessions, and state legislatures attuned to providing industry a “healthy business climate.” 19 Hearings before the Subcommittees on labor standards of the Committee on Education and Labor, House of Representatives, on H.R. 76, the National Employment Priorities Act, Akron, Ohio, May 9, 1975. 20 Headlines in the Dallas Times Herald, January 21, 1979 pro- claimed: “Bill aims to stem Snowbelt exodus” and stated: “Sen. Harrison A. Williams, Jr., of New Jersey will introduce landmark legislation later this month aimed at slowing the exodus of industry from the Northwest and Midwest, it has been learned. The measure would require employers to provide for the financial security of their workers before closing up shop or moving to another state. = The bill is —- to lead to one of the hottest labor-related debates of the 96th Congress. Strong opposition is anticipated from the business community and from the ‘Sunbelt’ states which often are the beneficiaries of plant closings in the Northern ‘Sunbelt.’ Williams, a Democrat, is chairman of the Senate Human Re- sources Committee. A draft of the proposed legislation, obtained by the Newhouse News Service, shows it would obligate an employer to protect the ‘social and economic health’ of his workers in —: Energy savings resulting from environmental characteristics are additional reasons to accelerate industrial movement.?? Organized employees, and the unions which represent them protect against the employer who announces “We are moving on,” by obtaining collective bargaining protections similar to those at bar. Yet, the Court of Appeals says, they are not to be specifically enforced,?? and this is the Court which declares the law for that portion of the Sunbelt which stretches from Florida to Texas— the very area into which the nation’s industry is moving. The rights here at issue—those of incumbents provided in collective agreements—as well as those of new hires in low wage areas to which industry moves—all evolve from the same federal statute. The balance to be drawn requires definitive decision of important questions of broad application. As we demonstrate, the Court of Appeals’ holding that incumbent's contract rights are obliterated by the employer contracting with others is plain error. the same way he now is required to protect the environment of the area where the plant is located. ‘Just as a firm must now recognize that its pollution is a social cost for which the firm must take some responsibility, it is now time to recognize that the relocation or ioee of a plant or factory by a firm imposes costs on others for which the firm must be in some part responsible,’ the draft states.” 21 See Fulton, “New Factors in Plant Location,” 49 Harv. Bus. Rev. 4, at 5-6, reporting that more than 33% of the moves are to small non-metropolitan areas. He predicts: “the trend is likely to continue, particularly away from the largest cities.” *2 Compare the Court of Appeals (at p. 7006): “We think however, that if the Denison plant had not been oo gen prior to the award it would have been readily enforce- able in its entirety against Standard.” am 16 —= 2 Quite aside from these important practical questions is ihe necessity of providing guides as to the balance between rights specified in lawful collective bargaining agreements and those flowing from NLRB certifications. Not since Carey v. Westing- house, 375 U.S. 261 (1964) 11 L.Ed.2d 320 has this court addressed the questions of the respective roles of arbitration and NLRB bargaining unit determinations. There this Court en- dorsed arbitration as a means to solve either work assignment or representation disputes. And though not there met with con- flict with an NLRB Order, stated that in the event of such conflict, the NLRB Order would prevail. But does an arbitral award “conflict” with an NLRB § 9(c) “certification” (as distinguished from a § 10 “Order”), when it specifically enforces individual employees’ seniority and wage rights provided in their Union agreement? In Civil Rights cases this Court found no conflict with the federal statute in honoring established and lawful seniority sys- tems and “slotting” those workers who have been the victims of unlawful racial discriminations in the bona fide seniority systems provided by the collective agreement. So here, there should be no impropriety in assigning metropoli- tan employées who move to the new plant the seniority they would have enjoyed had the employer not violated their con- tract rights. And “Red Circle Rates” are a commonplace in the world of labor relations—i.e., the assignment of particular individuals rates above the contract minimum is often done—and for a variety of legitimate reasons. Does such assignment “violate” the certification issued by NLRB?23 May a court, on speculation 23 As we have seen supra p. 11, both the LAM contract and the NLRB certification expired in June 1978. There then could not be “conflict” with the expired contract or the superceded certification. — ee that it might, refuse to vindicate by specific performance the rights provided in a collective bargaining agreement which is the favorite of the federal policy? Both NLRB and arbitrators are essentials in the statutory scheme by which workers rights are to be protected, and the public’s stake in the stability of labor relations which flows from enforceable collective bargaining agreements is to be vindicated. The procedures and powers of both the administrative law and the arbitral process are a necessity to promote the national labor policy. Until and unless there is actual conflict, neither should be required to give way to the other. Surely, the lower court's general notion that to vindicate rights to jobs and wages is somehow “repugnant to,” though not necessarily violative of, the National Labor Relations Act ought not to stand. 3 The conventional remedy for violation of a collective bar- gaining agreement is specific performance.24 Yet the remedy is to be denied, says the majority below, because the employer has now signed a contract with another. The conventional rem- edy is denied because he who broke the agreement, has blocked the remedy by subsequent contract with another union. When S sells a house to B-1, he may not avoid specific per- formance of his agreement to deliver the house to B-1 by his subsequent agreement to sell it to B-2.?° Labor relations policy considerations do not point to any different result. Indeed, labor policy reinforces what would be 24 The majority en banc wrote at App. pp. 92-93, infra: “. . . if the Denison plant had not been organized prior to the award, it would have been readily enforceable in its entirety against Standard.” 29 The Law of Contracts, Baker Voorhis & Co., New York, 1920, $1429. ‘anak ME ati the certain result in commercial law. Federal labor policy encourages and protects the collective bargaining contract, pro- vides for its enforcement by specific performance. Federal labor policy protects against the runaway shop; for as NLRB has redundantly held, plant relocation becomes unlawful when the move is effected, as here, for anti-union mo- tives. See “Plant Relocation—Catching Up With the Run- away Shop,” XIV Boston Col. L.Rev. 1135 (1973); Sheink- man, “Plant Removal Under the National Labor Relations Act,” 16 NYU Conf.Lab. 81 (1962), and cases there cited. Admittedly, specific performance of limitations on plant re- moval provisions in collective agreements will have some ad- verse affect upon putative or newly hired workers at the new plant. These new hires have statutory rights to self organiza- tion and collective bargaining. But to elevate the rights of the new employees at the rural location above the contractual rights of 30 year veterans is to turn the statute topsy-turvy. The purpose of the statute is to promote the practice of col- lective bargaining, to foster written collective agreements to which all parties are to be bound. Rights so established should not evaporate when an employer violates both his collective bargaining agreement and the statutory rights of his employees. Here, the move to Denison was (as the arbitrator found)*® for the purpose of “going non-union,” and to discriminate against the Dallas employees because of their Teamsters affiliation. There is no suggestion here that NLRB viewed the enforce- ment of the arbitral award as violative, either of its certifica- tion, or as an unfair labor practice intrusion on the rights of the rural employees. To the contrary, as the original opinion 26 The Circuit Court majority stated: “.. . we are not unmoved by the employees’ situation. We also accept the finding of the arbitrator and we do not condone the company’s conduct. It is noteworthy that Standard itself does not deny the contractual violations. . . .” (at headnotes 6, 7) p. 7008. am 19 of the Court of Appeals panel specified, charges of unfair labor practice were withdrawn, with NLRB approval, upon the NLRB counsel’s published opinion that no unfair practice was shown. The en banc majority does not dispute this—indeed, they acknowledge (footnote 7) “. . . it would be difficult for the NLRB to find the necessary discriminatory intent” to support §8(a) (3) violation should the award be obeyed. The en banc majority further is specific, at footnote 7: “ . we certainly express no opinion as to whether en- forcement of this award in the circumstances of this case would constitute an unfair labor practice in violation of 29 U.S.C. 3158(a)(3). That is a task for the Board.” It is, indeed. And unless and until the Board so finds, there is no conflict with the arbitral award. In the absence of such conflict, a valid award ought not be thwarted by a court’s general notion that it is “repugnant” to the Act. CONCLUSION For these reasons a Writ of Certiorari should issue to review the judgment and opinion of the Court of Appeals for the Fifth Circuit. Respectfully submitted, DAVID PREVIANT 6th Floor, Midland Bank Building 211 West Wisconsin Avenue Milwaukee, Wisconsin 53203 L.N.D. WELLS, JR. G. WILLIAM BAAB 8204 Elmbrook Drive, Suite 200 Dallas, Texas 75247 APPENDIX ee ay «ee ARBITRATOR’S OPINION AND AWARD In the Matter of the Arbitration Be- > tween Standard Brands Incorporated (Dallas Opinion Margarine Plant) and > Award and (Denison Plant Grievance) Local 767, International Brotherhood of Teamsters . Before CHARLES J. MORRIS, Arbitrator selected by the parties NATURE OF THE CASE This case concerns the opening of a new Standard Brands margarine plant in Denison, Texas, and the closing of an exist- ing margarine plant in Dallas. At issue are the rights, if any, of the “production and maintenance employees and laboratory testers” at the Dallas plant under a collective bargaining agree- ment with Local 767, International Brotherhood of Teamsters, successor to Local 159, International Union of United Brewery, Flour, Cereal, Soft Drink and Distillery Workers of America, AFL-CIO. The Union contends that the Dallas employees have job rights at the new Denison plant, which is located about 75 miles from Dallas. The Company disputes this, contending: that the Denison plant produces soft tub margarine which the Dallas plant has never produced, that “Denison is not equipped to manufacture quarter pound stick or whipped stick product,” which the Dallas plant produces, that “no operations at the Dallas margarine plant have closed [and] no Dallas employee with seniority has been laid off as a result of the opening of the = ee Denison plant.” The Company made these contentions in its brief filed on May 1, 1975. Since that date, the record has been reopened to receive evidence that the Company will “perma- nently cease operations at the Dallas margarine plant at the close of business on October 3, 1975.” It goes without saying that this case is governed by the col- lective bargaining contract. But because that contract incorpo- rates certain pertinent requirements in the National Labor Rela- tions Act, I am especially mindful of the Arbitrator’s obligation under the decisions in Spielberg Mfg. Co., 112 N.L.R.B. 1080 (1955), and Collyer Insulated Wire, 192 N.L.R.B. No. 150 (1971). In Spielberg the National Labor Relations Board de- fined the standard under which it would defer to the arbitration process when arbitration issues under a collective agreement overlap unfair labor practice issues; to wit, when “the proceed- ings appear to have been fair and regular, all parties had agreed to be bound, and the decision of the arbitration panel is not clearly repugnant to the purposes and policies of the Act.” In Collyer, the Board reaffirmed the Spielberg doctrine and estab- lished an additional doctrine: that it would withhold NLRB processes in such cases prior to arbitration when the collective contract made available a quick and fair means for the resolu- tion of this dispute including, if appropriate, a fully effective remedy for any breach of contract which occurred.” The present case appears to meet the Collyer standards. Al- though the Union claims that the Company had violated specific contractual provisions, the conduct in question would also, if brought to the NLRB, involve unfair labor practice questions un- der Sections 8(a) (1), 8(a) (3), and 8(a)(5) of the NLRA (29 U.S.C. §141 et seq.) I am thus mindful of my responsibility to the parties and recognize that this case severely tests the theory and philosophy behind Spielberg and Collyer, for this decision will, of necessity, treat such volatile issues as alleged discrimi- nation against union membership, alleged denial of employment on account of union representation, and alleged refusal to bar- =< gain in good faith—all however in the context of specific con- tractual requirements. In attempting to meet the Spielberg standards I do not lose sight of my primary objective, which is to give effect to the contractual language which the parties have negotiated. GRIEVANCE— The grievance herein was filed on November 21, 1974, and reads as follows: The union is filing a grievance on behalf of the Dallas, Texas margarine workers. Cited in this grievance are Sec- tion 13(E) and 13(F) of Part I and other pertinent clauses covered by this contract. We feel these clauses cover these employees because the building and opening of the new margarine plant built in Denison, Texas will result in the closure of the Dallas plant and will adversely affect the employees covered by the current labor agreement now in effect. We further feel that the thirty people whose names were submitted for transfer are covered by Section 14(E) of Part I. We are requesting arbitration on these issues. PERTINENT CONTRACT PROVISIONS— The following provisions of the collective bargaining con- tract are pertinent: Part VIII, Section 1— BARGAINING UNIT The Company recognizes the Union as the sole and exclusive collective bargaining agent for all production and maintenance employees and laboratory testers at the _— Company’s margarine plant at Dallas, Texas, excluding supervisory, clerical and professional employees. Truck drivers and helpers loading or unloading will be permitted only in the immediate dock area. All orders will be filled by Local 159 bargaining unit members. Part I, Section 13— SEVERANCE ALLOWANCE, PLANT CLOSINGS AND TRANSFERS (a) Before any plant or department is closed, the Un- ion will, if possible, be given thirty days’ prior notice. (b) Employees with ten years or more of service who are permanently laid off for lack of work due to techno- logical improvement, or changes in production methods or processes including the method of shipping, receiving or handling materials, the closing of a department or a plant or part of a department are entitled to a severance allowance of one week for each year of service to a maxi- mum of thirty weeks. An employee with three but less than ten years of service so laid off is entitled to a sever- ance allowance of one week for each year in which he worked one thousand or more hours and one-half week for each year in which he worked less than one thousand but more than two hundred hours and none for any year in which he worked less than two hundred hours. (c) A permanent lay-off is one which is expected to last for six months or longer. . . . (d) An employee paid a severance allowance shall cease to be an employee of the Company and, if rehired, shall be a new employee but have no rights under this provi- sion based upon his service ante-dating receipt of his Severance Allowance. — (e) Should the operation at any location be transferred permanently to a new or existing plant the available jobs ~ at such plant will not be filled unti! employees of the affected plant have been given reasonable notice and the opportunity to fill them in accordance with their seniority and to transfer to the new plant. In the case of existing plant the foregoing provision shall be subject to the prior seniority rights, if any, of employees in such plant. Upon moving to the new location employees will be paid such reasonable moving expenses as the Company and the International shall determine. Any such payment to an employee will be deducted from his severance allowance, if any, and the balance of such severance allowance shall be paid if such employee is thereafter permanently laid off or if he thereafter quits within a year. (f) In case of transfer to a new plant, if permitted un- der the National Labor Management [sic] Relations Act, that Part of this Agreement relating to the plant affected shall cover such new plant. (g) The provisions of this Section 13 do not limit dis- cussion between the Union and the Company on questions relating to the effect on Employees of plant or depart- ment closings or transfers. To implement such discussion the Company shall appoint one representative and the International one representative to the Committee hereby created to develop answers to the questions raised and, if they don’t agree, they shall appoint a third and impar- tial member to join the Committee as Chairman to re- solve such disagreement. , —_ oe Part VIII, Section 4— SENIORITY (a) Seniority shall be based upon length of service with the Employer since the most recent hire. e * * * * * * (d) Should it become necessary to lay off employees, they will be laid off in accordance with their plant-wide seniority. > * * od * * * (f) Employees with seniority who are laid off shall be recalled in reverse order to that in which they were laid ee . .. Seniority shall . . . cease under the following condi- tions: . . . 4. Upon lay off for a period of twelve (12) months or longer. Part I, Section 14— UNION SECURITY (e) The Company will not interfere with the right of the Employees to become members of the Union and will not discriminate against any Employee because of such Union membership or Union activities.” Part I, Section 3— DISCIPLINE (a) Employees may be discharged or disciplined only for fair and just cause. .. .” Part I, Section 15— 0 ane Sg eee DISPUTES (a) This agreement, which includes all Agreements made part hereof by reference and all Agreements herein referred to, fixes all terms and conditions of employment for the Employees whether or not specifically referred to, pro- vided for or considered by the parties hereto and both the Company and the Union specifically waive any and all rights which each may have to compel the other to bargain collectively during the term of this Agreement to change or add to this Agreement on any subject matter not cov- ered by this Agreement except as provided in Section 16 hereof. (b) Since complete and adequate remedy is provided by the terms of this Agreement, no alleged or other violation of any provision of this Agreement shall give cause to sus- pend, invalidate, violate or terminate any part of the Agreement. * * * * * * * Part VIII, Section 9— DISPUTES SETTLEMENT (c) Any grievance, dispute or misunderstanding which may arise concerning the interpretation or application of the provisions of this Agreement shall be presented. . . . (d) Upon the request of the Employer or the Union the matter may be submitted to an impartial arbitrator. . . . * * * * * * * (f) . . . The arbitrator shall have no power to add to or subtract from or modify any of the terms of this Agree- ment, or any agreement made supplementary hereto. _— STATEMENT OF FACTS— The facts were developed in two hearing sessions in Dallas, Texas, at a visitation to the Dallas plant, and through submission of additional documentary evidence by express or implied limited motions to re-open the record. The formal hearing sessions were recorded by a Court Reporter in 583 pages of tran- script, and witnesses were sworn. Both parties introduced quan- tities of written and photographic exhibits and filed comprehen- sive briefs. The first hearing was held on February 28, 1975. At the close of that session both parties rested subject to a visit by the Arbitrator to the Dallas plant on March 5, 1975. At the close of that visitation, the Company attorney indicated an intent to file a motion to reopen the record, whereupon the rec- ord was opened for further hearing on March 10, 1975, follow- ing presentation on that day of the Company’s motion to reopen; the Union’s objection to reopening the record was over- ruled. Both parties filed briefs on May 1, 1975. Additional documentary evidence submitted to the Arbitrator by appro- priate letter or motion included copies of the following: (1) the Intervenor’s [Teamsters’] Exception to Regional Director’s Report on Objections with supporting brief in NLRB Case No. 16-RC-6822 dated March 17, 1975; (2) Decision and Certi- fication of Representative in NLRB Case No. 16-RC-6822, dated May 22, 1975; (3) Collective bargaining contract cover- ing Denison Margarine Plant employees between Company and Local Lodge 2082, International Associations of Machinists, dated June 8, 1975; (4) Notice, dated September 2, 1975, from Company to “Dallas Margarine Plant Employees, members of Teamster Local 767,” advising that Dallas plant would close at close of business on October 3, 1975. The Dallas margarine plant is located in an old brick building on the edge of the central business district of downtown Dallas. The building was old when it was first used to manufacture margarine in the late twenties or early thirties. Its construction eS re features suggest that it is among the oldest manufacturing plants presently being operated in Dallas. The operation was acquired in 1940 by the Standard Nut Margarine Company of Indiana- polis, Indiana. Standard Brands Incorporated acquired Stand- ard Nut in 1943, including the ownership of the Indianapolis margarine plant and a lease of the Dallas margarine plant. Standard Brands (hereinafter called the Company) has never owned the property at the Dallas plant but has leased it from 1943 to the present. In addition to the Dallas and Denison plants, the Company also operates margarine plants in Oakland, California, Atlanta, Georgia, and Pennsauken, New Jersey. Prior to the building of the Denison plant, the newest plant was the one at Penn- sauken, which was built by the Company in 1961 on land owned by the Company, and it is the only one operated non- union. There are 48 regular employees within the bargaining unit at the Dallas plant. As noted from the seniority list dated January 14, 1975, 3 of these employees have 30 or more years of service, 8 have 20 or more years of service, and 26 have 10 or more years of service. The complete list reads as follows: Employee Seniority Date: Employee Seniority Date: J. P. Raulston 9/19/41 G. E. Phillips 9/13/56 W. T. Harrison 6/18/43 T. L. Hennig 9/30/57 G. Boon 10/04/45 H. E. Williams 1/21/58 O. M. Murley 9/16/52 E. Yarbrough 4/08/59 F. J. Gore 11/02/53 F. Weatherall 9/11/59 L. V. Thompson 5/11/55 D. P. Crow 1/04/60 Z. Sherrell 8/30/55 M. M. Van Briggle 1/05/60 W . S. Jenkins 9/21/55 J. R. Brown 10/10/60 J. Lerro 1/09/56 F. Steed, Jr. 5/23/61 rs) — A-10 — Employee Seniority Date: Employee Seniority Date: C. M. Clay 6/18/62 D. Mendoza 7/14/70 A. E. Rose 3/25/63 M. Pinkney 12/03/70 B. R. Dunn 3/26/63 J. B. Guillory 12/14/71 W.F. Manning 11/11/63 E. M. Browne 2/06/73 A. H. Brown 7/06/64 D. F. Richardson 2/06/73 K. Ridlehuber 7/27/64 B. J. Badgett, Jr. 2/26/73 J.C. Chambers 9/07/64 D. Dunn 7/30/73 R. C. Daugherty 6/03/65 H. F. Sangster 8/20/73 N. F. Rogers 7/15/66 T. C. Krase 8/27/73 L. Coleman 9/12/66 H. Simmons, Jr. 8/28/73 J. C. Ball 9/12/66 M.E. Wheeler 10/31/73 J. H. Durden 9/22/69 L. E. Hinton 11/08/73 A. Gonzales 9/30/69 C. A. Attaway 1/24/74 J. L. Thomas 10/06/69 J. P. Keen 9/13/74 J. L. Buckley 12/11/69 I. Anderson 9/13/74 I visited the Dallas plant in the presence of the parties and also studied photographs of the interior of the plant and its equip- ment and considered extensive testimony about the condition of the plant and equipment. I conclude from such direct ob- servation and evidence that the physical premises are in an extremely run-down condition and that the equipment, with minor exceptions, is quite old—most of it was there 23 years ago when observed by one of the witnesses. There is almost no new equipment in the plant, and what little there is, such as a hot water heater, was installed on a replacement basis to keep the plant operational. This is not to say, however, that the Company has neglected essential maintenance or that the premises are not adequate for the manufacturing operation per- formed. The record does not reflect the exact size of the plant area, but it is undisputed that the plant is already crowded and that there is no room for addition of more manufacturing lines. There are presently three manufacturing lines at the Dallas — | plant: 2 quarter-pound (stick) margarine lines and one whipped (stick) margarine line. Not only is there no room at the Dallas plant for expansion, there is also the distinct possibility that some of the existing property will be absorbed into the widening of Harwood street on which the plant faces. This fact became known when such widening was included in a city plan published in April, 1971. Donald Williamson, manager of the Dallas plant, obtained the plans when they were released and called them to the attention of Company personnel at the New York headquarters. The lease agreement covering the Dallas plant was originally dated May 29, 1963. On January 16, 1964, it was amended, and from that time until September 6, 1973, the Company exe- cuted three extensions of three years each. The last such term was executed on October 30, 1970. It was during that term that the Company began seeking a new plant site in the vi- cinity of Dallas. In September, 1972, the Company made in- quiries of the Denison Chamber of Commerce concerning a possible site location in Denison, and on October 14, 1973, the Company announced selection of a tract at Denison on Highway 84 just outside of Denison. Site preparation was sched- uled for November, 1973, and on December 11, 1973, the property was surveyed by a registered public surveyor. The plant that was subsequently built at this location and formally opened on November 1, 1974. One month prior to announc- ing the Denison plant site, the Company entered into a letter agreement with the owners of the Dallas plant property in which, for the first time, only a one-year lease was signed. That agreement also provided an option to renew for two additional one year periods. On October 25, 1974, the Company exer- cised its option, thereby extending the lease for a one year pe- riod commencing on February 1, 1975, and terminating on January 31, 1976. — A-12 — The evidence is overwhelming that the reason the Company built the Denison plant was to replace and expand the produc- tion of the Dallas plant. There were many reasons to anticipate the closing of the Dallas plant, including the age of the plant, the age of the equipment, higher utility charges, higher oil freight rates, and the possibility of street construction on Har- wood. Despite the Company’s efforts during the hearing to treat the opening of the Denison plant separate from the clos- ing of the Dallas plant, the Company’s Director of Labor Re- lations, Byron Hawkins, conceded the linkage between the two events. When asked by the Arbitrator if he knew why the Com- pany decided to build the Denison plant he replied: “The higher costs of freight from the Indianapolis area, the greater penalty that was being paid by trucking down. There was no room to expand the Dallas plant. The Dallas plant is a leased plant. Not owned. It’s an old plant. It’s bounded by other buildings, by highways.” (Emphasis added.) He explained that there were “a number of uncertainties and concerns because of the age of the Dallas plant, very real concerns . . . the marginal nature of the plant, the fact that it does only have three lines of mar- garine production.” Although he stated—erroneously as later evidence showed—that the original design for the Denison plant was to produce only soft margarine, he was careful to point out: “I don’t think anyone is in a position to say that quarter- pound margarine will not be produced in Denison with the big new facility. One certainty is involved because of the age of the [Dallas] equipment, the age of the plant, the highway con- struction, and a number of other factors, utility costs and so on, it’s entirely possible.” It was more than possible. Hawkins, who was the Company’s only witness at the first hearing, admitted that he was not a party to decisions regarding the opening and closing of plants and transfer of production facilities; specifically regarding the Denison plant he said that “people in the mar- garine division and in the grocery products manufacturing di- vision in New York would be the ones to make that decision.” At the second hearing, Robert Olsen, Operation Manager for — A-13 — the Margarine Division, who was called by the Company as a witness for the limited purpose of describing the efficiency and operating conditions of the Dallas plant in comparison to other Company facilities, supplied additional evidence on cross-exam- ination and on examination by the Arbitrator about the Com- pany’s object in opening the Denison plant. He said the “Den- ison plant is supplying soft products for the same service areas that are supplied by the Dallas quarter-pound, bulk and whipped stick,” but such production represented only about 3% of the Company’s total margarine production. When questioned as to the efficiency of such a limited operation at such a large plant —the Denison plant has 100,000 square feet of floor space and a present capacity for 9 manufacturing lines only two of which are now being used—-he conceded the possibility that at some time in the future there would be a full line of margarine pro- duction at Denison. At first he said—again erroneously, in view of the evidence later developed—that “there was no long-range projection as to what was plannned for Denison. It was planned to produce soft products and to relieve the Indianapolis load.” But when pressed he admitted that “sometimes in the future, yes, I’m sure we will” put in some lines which will duplicate some of the Dallas lines. (Emphasis added.) When asked if this would involve. use of Morpak machines of the type used in Dallas, he was able to suggest that Benhil rather than Mor- pak machines would be used. Such specificity had a basis in fact, as additional evidence later confirmed. Mr. Olsen further linked the Denison and Dallas plants by his description of the common marketing arrangements. The Company’s salesmen take orders for products from both plants, and the orders are turned in to the Dallas plant only “and the Dallas plant arranges to either load their products first and then pick the balance up in Denison, or they will contact the Denison plant to load their soft products and finish the loading in Dallas going southbound.” He con-. firmed that in terms of marketing the Denison plant is depend- ent upon the Dallas plant in this same area, which is primarily the southwest part of the United States, and that as far as the — A-14— salesmen are concerned the two plants are virtually operating together. He further stated that if the Dallas plant were closed, he knew of no reason presently why the bulk of the area aow served by the Dallas plant would not be served from Denison. Regarding his refusal in February, 1974, to assure the Union that jobs at the Dallas plant would not be eliminated by reason of operations at the Denison plant, which is discussed in detail below, he testified that “eventually” some jobs at the Dallas plant could be eliminated by reason of the Denison plant, and that in his communication to the union at that time he had to take into consideration the possibility of closing the Dallas plant, which closing was “still a possibility.” Mr. Olsen noted two economies associated with the Denison facility as compared with Dallas: (1) the cost of oil was less— this was confirmed by the fact that the major oil suppliers for the company were Anderson-Clayton, whose plant was located ten miles away, and Safeway, whose plant was only two miles away; and (2) the per hour labor cost was lower at the Denison plant than the Dallas plant. Also bearing on the Com- panys’ intentions was Mr. Olsen’s responses to questions con- cerning the cost of the Denison facility. Total acreage, estab- lished earlier by a map and Mr. Hawkins’ testimony, was 63% acres, of which 37 acres was deemed excess and was therefore for sale. The plant of 100,000 square feet of floor space was constructed from the Company’s own funds at a cost estimated by Mr. Olsen at three and a half or four million dollars. He indicated an additional one million dollars for cost of equip- ment, bringing the total investment at Denison to four and a half or five million dollars. Although no figures were introduced to show profit and/or loss at that facility, it is obvious that operation of only two manufacturing lines at such a large and modern facility which has existing capacity for nine lines falls far short of efficient and economical utilization. a — A-15 — In response to a question on redirect examination, Mr. Olsen said that there were no plans to close the Dallas margarine plant, but on cross-examination he explained that although all sorts of possibilities had been discussed, “no definite plans or time table has been set for it;” in any event, however, he said he would possibly not be privy to the final decision nor would he be the one to make the final decision. His response to the Arbi- trator’s final questions were frank and revealing: Q. Were you privy to the original decision to open the Denison plant? A. I was involved in the original planning of the plant premises, the equipment and so forth, the layout. Q. And in laying out the plant it was laid out so that it could accommodate a full line of margarine produc- tion? A. It was built for expansion, yes, and you could conceiv- ably put everything into it. Q. And not built for a limited line of just tub margarine? A. No. Those answers, though not brought out on direct examination, stand in marked contrast to the Company’s efforts at the first hearing to convey the impression that the Denison plant had not been built to produce stick margarine; Olsen’s frank answers contradicted the contrary testimony given by Byron Hawkins at the first hearing. Hawkins had stated that “when the Denison margarine plant was first designed it was clearly intended at that time tobe a sixth margarine plant making only soft margarine, only soft margarine.” (Emphasis added.) He partially modified his position in later testimony but was still at variance with Olsen’s answers and with subsequent evidence supplied by Jim Windland, manager of the Denison plant. In Hawkins’ later state- ment he said: “J think at the very outset [Denison] was planned — A-16 — primarily and perhaps solely as a soft margarine plant. I think before it got very far along the plans were to put—to put a dif- ferent formulation of quarter-pound margarine into that plant, different formulations than what can be made on the Dallas machines.” He acknowledged, however, that he was not really privy to the decision of opening and closing plants and that he personally did not know what the intent was. The intent became crystal clear when Jim Windland finally testified. Mr. Windland was not called as a Company witness; when his testimony was requested by the Union, the Company at first refused to produce him. Later, however, the Company re- considered, and Mr. Windland drove in from Denison and was called as an adverse witness by the union just prior to the close of the hearing. Before referring to his testimony, however, an- other statement by Labor Relations Director Hawkins should be noted, for it was an additional statement in the pattern being presented by the Company in order to show a separation be- tween the Denison and the Dallas plants. He testified: “There is no equipment in the Denison plant at this time for the making of molded stick margarine.” As will be seen from Mr. Wind- land’s testimony, that statement was not accurate. But the mak- ing of the statement is important as corroboration of the Com- pany’s intent to conceal the true molded stick margarine capa- bility of the Denison plant. Denison plant manager Windland testified that in the original planning, quarter-pound lines were included “and we had even got to the point of laying out the lines and so forth and it was scrapped.” He said those original plans went back to October, 1973, which was the month when the Company formally an- nounced the building of the Denison plant. He testified that the plans were set aside but later revived. There is reason to be- lieve, however, that corporate decision-makers were only post- poning execution of the plans, not abandoning them. German- made Benhil machinery for two lines of stick margarine produc- — A-17 — tion were actually ordered for delivery to Denison. The exact date of the placing of the order is not known, but Mr. Windland testified that “around nine months to a year” was required for delivery, and delivery of the first line was made in late July or August of 1974. Thus, either a new order for this equipment had been placed in November, 1974, at the latest; or, more likely, the original orders had never been cancelled. Mr. Wind- land referred to the second plans for installation of these lines and testified: “I’ve looked at so many plans and many things, but there sticks in my mind a date of somewhere in the latter part of May [1974], but now whether that’s on that, on the plans on this second group of plans or whether it’s on a revision of some other plans, I really could not definitely say.” He went on to say, however, that a full line of Benhil equipment was received and that the parts of that equipment essential for quarter-pound production are still in Denison, though in storage. The facts concerning the concealment of that equipment are detailed be- low, but before examining those facts and other related events, it is pertinent to ascertain the Company’s motive for certain actions it took in connection with the plants in question. The evidence in the record is clear and convincing that the reason the Company did not promptly carry out its original and ultimate plan to open the Denison plant as a full capacity margarine facility—including production of stick margarine which had been produced at Dallas, thereby transferring all production from Dallas to Denison—was to avoid dealing with the Teamsters Union and avoid application of Section 13(e) of Part I of the Union’s collective bargaining contract. That provision requires: “Should the operation at any location be transferred permanently to a new . . . plant the available jobs at such plant will not be filled until employees at the affected plant have been given reasonable notice and the opportunity to fill them in accordance with their seniority and to transfer to the new plant.” (Emphasis added.) Had such transfer oc- curred, the entire Dallas collective bargaining agreement would — A-18 — conceivably have continued to be effective at the new plant under Section 13(f), although such a finding is not necessary to the Award in this case for reasons discussed below. Section 13(f) is pertinent, however, insofar as it sheds light on the Company’s motivation. Evidence bearing on the Company’s anti-union motivation is undisputed. The last plant built by the Company, the one at Pennsauken, is non-union. A decision was made at the corpo- rate level that the Denison plant was also to be non-union. Jim Windland understood that intention; he testified in response to a question from the Arbitrator: “All of the plans that I have ever discussed with anyone on the corporate level was to operate the plant non-Union.” (Emphasis added). That intent was corroborated by an early statement made by Howard Pines, the Company’s Director of Employee Relations. On December 15, 1973, which was shortly after preliminary work on the Denison building site had begun, Mr. Pines told James C. Holden, the Chief Steward of the Union for the Dallas plant, that he knew that the Company was going to attempt to operate the Denison plant “non-union.” That statement was made in the presence of the manager of the Company's Dallas yeast plant, Mr. Corbitt. Although the statement was revealed at the first hearing, neither Pines nor Corbitt was called as a wit- ness to dispute its accuracy. It is thus uncontradicted from statements by Windland and Pines that the Company intended the Denison plant to be a non-union operation, and various actions which the Company took can be satisfactorily explained only on the basis of that intent. The plant itself was built large enough to encompass the present Dallas stick margarine production, in fact the entire Dallas operation including quarter-pound, whipped, and bulk production; and the original plans, including engineering draw- ings, specifically called for the erection of two manufacturing lines at Denison for production of stick margarine. The latter ee ———— — A-19 — lines would have substantially duplicated most if not all of the Dallas operation. A decision was apparently made around October, 1973, to postpone installation of those lines, which may have been at about the time the Company made its deci- sion to operate non-union. If the plant was to operate non- union, introduction of the stick margarine lines would obvi- ously have to be postponed to avoid the initial transfer of union employees from the Dallas plant. Subsequent events established that the original plan to transfer the Dallas operation to Deni- son was never abandoned—only conveniently postponed. It was the Company’s plan that by postponing the transfer of operations, ultimate transfer would be to an existing plant rather than to a new plant, thereby avoiding—or so the Com- pany hoped—the effect of prior seniority rights which the Dallas employees would have if Denison was treated as a new plant under Section 13(f); transfer to an existing plant would limit the Dallas employees to available jobs at the existing plant, “subject to the prior seniority rights, if any, of employees in such plant.” To carry out this policy, the Company told the Union as little as possible and staffed the jobs at the Denison plant with- out giving employees at the Dallas plant reasonable notice and opportunity to fill them, notwithstanding the requirement of Section 13(3). The opportunity was denied both as to new jobs, such as those on the soft margarine lines, and as to old jobs on the stick margarine lines which were clearly being transferred—though slowly—to the new plant. As early as November 8, 1973, the Union began its formal efforts to obtain information and arrange a solution to the impending problem. On that day James M. Holden, the Local Union representative, wrote Dallas plant manager D. R. Wil- liams as follows: The union has information that Standard Brands Inc. is in the process of building a margarine manufacturing —~ plant at Denison, Texas. We believe that this plant is being built to replace the one now located in Dallas, Texas. We are concerned about the employees covered by Part VIII of our labor contract. Although the new margarine plant now being built will not open for some time, we feel that it is in our best interest to start nego- tiating the rights of the Dallas margarine employees un- der Section 13 of our national agreement immediately. We would appreciate your answer to this letter as soon as possible. Shortly thereafter, in the latter part of November, 1973, Mr. Charles Cunningham, a foreman at the Dallas margarine plant, told Holden in a casual lunchroom conversation that there was “no doubt in our mind that they are going to close this thing down.” When called as a witness by the Company, Cunning- ham did not deny having made the statement, but added that he “had not been told the plant was going to close.” His state- ment that the plant would close, which I find that he did make, may have been only his opinion, but because he was a super- visor and because he saw the signs which suggested closing of the Dallas operation in favor of the Denison plant, the state- ment was probative together with other circumstantial evidence bearing on the Company’s intentions. His statement also indi- cated what may have been a general belief among many em- ployees of the Dallas plant at that time. Notwithstanding, the Company was not in any hurry to respond to the Union’s November 8 request for negotiations and information. The Company had in fact been busy making plans that would have been quite relevant to the Union’s inquiry, includ- ing the preparation of engineering drawings and the ordering and purchasing of Benhil equipment. Although the Union’s request in the Nov. 8th letter for negotiations under Section 13 of the National Agreement (Part I of the Collective bar- gaining contract) was a request for negotiations and informa- — A-21 — tion under the contract, it would also be a request pursuant to Section 8(a)(5) of the National Labor Relations Act (see discussion of NLRB v. Acme Industrial Co., 385 U.S. 432 (1967), hereinbelow). On December 13, 1973, Holden again wrote Williamson as follows: This letter is in reference to my letter dated November 8, 1973. The union still has reason to believe that the opening of a Margarine Plant in Denison, Texas will seriously affect the Dallas Plant. Since you have not seen fit to answer my letter, we feel that the company is avoiding the issue. We are therefore restating our position pertain- ing to Section 13 of the national agreement. We are also advising you that we fully intend to pursue our rights under this section to the fullest extent that we are ca- pable of doing. We would appreciate your answer as to the Company’s position on this matter. On December 15, 1973, during a discussion about matters relating to the Company’s Dallas yeast plant, where Mr. Holden was employed, Mr. Howard Pines, the Company’s Director of Employee Relations, told Holden “that as far as he knew there would be no loss of jobs or shutdown of this Dallas margarine facility;” however, he said he was only conveying the informa- tion as a “messenger” for he was not part of the Margarine Division. When Holden asked him for some assurance regard- ing these matters, he responded that he “couldn’t give . any assurance on this thing, that he wasn’t part of that divi- sion.” It was then that he volunteered the information that the Denison plant would attempt to operate non-union. On December 12, 1973, James C. Paradise, attorney for the Brewery Workers’ Conference of the Teamsters Union, — A-22 — wrote a letter to Howard Pines regarding certain problems requiring prompt consideration and resolution, one of which was “the rights of the Union and the Dallas margarine em- ployees in respect to the new margarine plant in Texas,” and requested a meeting “as soon after January 10 as possible.” On December 27, 1973, seven weeks after the union’s re- quest of November 8, Mr. Pines finally responded to Holden’s letters as follows: This acknowledges receipt of your letters of November 8 and December 13, 1973. These letters were answered in the meeting you and I had in Dallas on Saturday, December 15. Hope you and your family had a nice Christmas, and my very best wishes to you for a happy 1974. On January 4, 1974, Holden wrote Williamson again: To date no answer has been given the local union to our letters concerning the future of the Dallas mar- garine workers. In previous letters we expressed concern over the new plant being built in Denison, Texas. I received a letter dated December 27, 1973 signed by Howard Pines. Mr. Pines letter told us exactly nothing. In previous discussion with Mr. Pines I was told verbally that the Denison plant would have no effect on the Dallas plant. Mr. Pines has no connection with the margarine division and was acting as a messenger only. We still be- lieve the Dallas plant will be affected, and insist on nego- tiations for our right to transfer to the new plant. I would appreciate an answer to this letter stating the Company’s full position on this matter. Verbal reassurance is not enough. Williamson responded as follows: — A-23 — This letter will acknowledge receipt of your letter of January 14, [sic] 1974. As you know, I recently under- went major surgery on my back and I am way behind in my correspondence. I hope you will accept my apology for failing to personally answer your previous letter. Please be advised that I have asked Mr. Howard Pines to handle your letter and I ask that all future communica- tions on this subject be directed to him. Mr. Pines is be- ing sent a copy of your letter of January 4, 1974. And on January 23, 1974, Pines wrote Holden: Please be advised in regard to your recent letter to Mr. Williamson, I have also received correspondence on the same subject from Mr. James C. Paradise. A meeting has been set up with Mr. Paradise for Janu- ary 24, 1974, at which time the Denison and Dallas Mar- garine situations will be discussed. The meeting was held on January 24, 1974, the substance of which is reflected in the following correspondence. On January 28, 1974, Paradise wrote Pines: At our meeting at Brewery Workers headquarters in Cin- cinnati on January 24th we discussed the above plant and its possible effect on the existing margarine plant in Dallas. I told you that I would submit a number of questions to you in writing and it was agreed that you would give me a written reply. The questions are the following: 1. What is the expected date for the commencement of production operations at the Denison plant? 2. What is the date on which you expect to start hiring at the Denison plant? 3. What products are to be manufactured at that plant? — A-24— 4. Will any products presently being manufactured at the Dallas Margarine plant be manufactured at Denison? 5. Will any of the operations at the Dallas plant be trans- ferred to Denison, either immediately or in the foreseeable future? 6. Is there any reason to believe that any jobs at the Dal- las plant will be eliminated, either immediately or in the foreseeable future, by reason of the operation at the Deni- son plant? 7. Will equipment be installed in Denison for the manu- facture of the same type of margarine as is manufactured at Dallas? 8. Is the Company able to give the Union a firm commit- ment to the effect that no jobs at Dallas Margarine will be eliminated by reason of the operation of the Denison plant? I would appreciate a reply at your earliest convenience. On February 12, 1974, Pines responded to Paradise by en- closing a copy of the following letter from Robert L. Olson, dated February 11, 1974: INTER-OFFICE CORRESPONDENCE TO Howard M. Pines Date February 11, 1974 FROM R. L. Olsen OFFICE Groc. Prod. Mfg. Div. Hq. Subject Denison, Texas Plant The current situation in the margarine industry is the most volatile we have ever experienced because, in addition to the usual short- and long-term swings in consumer prefer- — A-25 — ence, we are also faced with shortages and sharp price in- creases for corn and soybean oils, and shortages of various packaging materials. Keeping the above uncertainties in mind, following are the questions asked by Mr. Paradise in his January 28 letter to you, and the answers to those questions: 1. What is the expected date for the commencement of production operations at the Denison Plant? October 1, 1974 2. What is the date on which you expect to start hiring at the Denison Plant? August 15, 1974 3. What products are to be manufactured at that plant? Soft and quarter-pound margarine 4. Will any products presently being manufactured at the Dallas Margarine Plant be manufactured at Denison? Yes 5. Will any of the operations at the Dallas Plant be trans- ferred to Denison, either immediately or in the fore- seeable future? No 6. Is there any reason to believe that any jobs at the Dallas Plant will be eliminated, either immediately or in the foreseeable future, by reason of the operation at the Denison Plant? No 7. Will equipment be installed in Denison for the manu- facture of the same type of margarine as is manufac- tured at Dallas? Yes 8. Is the company able to give the Union a firm commit- ment to the effect that no jobs at Dallas Margarine will be eliminated by reason of the operation of the Deni- son Plant? No — A-26 — The margarine division fully intends, of course, to abide by the provisions of the Dallas Margarine Plant labor contract. Robert L. Olsen Operations Manager Margarine Division The Union, however, continued to be suspicious, as indicated by a letter dated March 25, 1974, from Holden to Thomas Rusch, the Union’s Director of Organization. But Rusch was then—but not later—inclined to accept Olsen’s assurance, say- ing in his letter of March 27, 1974, to Holden that, based on “reference to the Company’s position there will be no transfer and there will be no loss of job, loss of any production or trans- fer of work out of the plant operations at Dallas, Texas. /f this is true we do not have an argument with the company.” (Em- phasis added). The Dallas employees and the Union representatives were not assured, however; neither Olsen nor any other Company of- ficial had disclosed to the Union what was really transpiring in the planning and building of the Denison plant, and the Dallas employees were fully aware of the visible limitations of the Dallas physical plant. As previously noted, the Company at that very time had an order for delivery to Denison two Benhil lines which could dupli- cate the Dallas stick margarine production; at the second hear- ing Olsen confirmed that he was “sure” that the Company at some time would put in lines which would duplicate some of the Dallas lines and that the Denison plant was built so “you could conceivably put everything in it.” Olsen was therefore not being candid with the Union in his letter when he advised that “in the foreseeable future” none of the operations at the Dallas plant will be transferred to Denison. Nor was he being candid when he stated that there was no rea- son to believe that any jobs at the Dallas plant will be eliminated — * ye “in the foreseeable future, by reason of the operation at the Denison plant.” By May, 1974, as noted previously, the Company either re- newed or revised original plans, or else drew a second set of plans, for installation of the two Benhil lines in Denison to produce stick margarine. In August, 1974, arrangements were made for their installation. At about that same time the Union began to make inquiry of the Company through Dallas attorney James L. Hicks. On August 8, 1974, he wrote R. A. Book, the Company's manager of Employee Relations as follows: On behalf of representatives of Teamsters Union 767, please accept this letter as the Union’s inquiry regarding fu- ture and further plans made by Standard Brands to change operations at the existing Dallas facility. As we have previ- ously discussed, there pends presently a grievance regard- ing the company’s having changed the method of opera- tion for delivery «f Standard Brands products. Please advise me if there are any plans to alter in any way the pres- ent method of operation at the entire Dallas facility. Al- though not intended to limit the previous inquiry, we are particularly concerned whether there are plans to sub-con- tract or contract out any existing functions presently done at the Dallas facility. Further, we wish to know whether there are plans to move any of the existing Dallas functions to the Dennison facility which we understand is presently under construction. .Please respond to this inquiry as soon as possible so that if necessary we can begin implementation of our contractual rights and negotiation of the impact upon potentially sepa- rated workers. Mr. Book did not reply until August 28, 1973, advising that the “Company has made the union aware of any planned | — A-28 — changes to the best of my knowledge,” (Emphasis added) in- dicating that the matter was not in his area of responsibility. Prior to Mr. Book’s reply, Holden had written Pines on Au- gust 16, 1974, and on the same day Union director of Organiza- tion Rusch also wrote Byron Hawkins, the Company’s Director of Labor Relations. Holden write Pines as follows: This letter is in regard to the Margarine Plant now under construction in Denison, Texas. The employees of the Dallas Texas Margarine Plant are demanding to know what their status will be in relation to the Denison plant. Will the Dallas plant be closed? Will our people be given an opportunity to transfer to the new plant pursuant to Section 13 of Part I? We feel we are entitled to answers to these questions before the opening of the Denison, Texas Plant. If we are not given written answers to these questions we will take whatever action necessary to assure the people in the Dallas plant of their rights. It is the opinion of the union that the company intends to close the Dallas plant and will attempt to deny our people their rights to follow the work. We would like an answer to our questions immediately. Time is growing short, since the Denison plant is sched- uled to open October 1, 1974. We are also demanding full union recognition for the Denison plant. Rusch’s letter to Hawkins of the same date covered four sub- jects, and including the following: Dallas, Texas—Margarine—December 21, 1973—National Agreement Sections 13 E and 13 F and Part VIII. New Margarine Plant—Denison, Texas, which leaves no doubt this new margarine plant will effect the employment — A-29 — Status and create undue hardship for the Dallas employees and members of our Union. Dallas Local Union requested negotiations for the transfer employment rights, etc., in- cluding recognition December 21, 1973. It is very obvious that the Company representatives in all four situations have been stalling. They have not bargained in good faith in the phasing out of the department closing (Peekskill, New York) or the new plants being built in Dayton, New Jersey or Denison, Texas. We will not accept the continuous stalling tactics. We in- sist On a settlement on all four problems. Our Local Unions have made proposals to resolve some of these issues and we get answers from Company representa- tives in the negative. Therefore, I am recommending to our attorneys immediate action for Unfair Labor Practice Charges. I think we have been more than patient, spent hours upon hours getting no place on all four issues. It is about time we clear up these important subject matters. I am sub- mitting a copy of this letter to our Brewery and Soft Drink Conference, 1.B.T. and the International Brother- hood of Teamsters (Washington, D. C.) for their review; my recommendations may not be to your liking, but our patience (members and Officers) are at an end. Awaiting your response for action. Notwithstanding that very little time remained before the Denison plant would open, there was no prompt reply to either letter. The plant itself had been completed, and equipment installation was scheduled for completion on October 15, with production to begin thereafter. A flurry of activity relevant to the concerns of the Dallas employees had in fact been occurring in Denison since May and was now ready for completion. That — A-30 — activity related to the planned installation of the two Benhil stick margarine lines and the Company’s efforts to conceal the equipment and plans from the Union. Bids had been let for the installation of those lines and, ac- cording to Mr. Windland’s testimony, the bidding closed the latter part of August. Meanwhile, all of the machinery for one of the Benhil lines had actually been delivered to the plant and placed in the production area. Thus, at the very time that equipment which would duplicate , the Dallas operation was being delivered and scheduled for installation, the Company was receiving strong and persistent requests from the Union for information and negotiations. Although the Union was entitled to have such information as discussed hereinbelow regarding contractual and National Labor Relations Act requirements, the Company’s response was to play for time. The Company evidently decided to postpone in- stallation of the Benhil lines until after the plant was staffed with new employees for production of soft margarine, a product which was not being produced at the Dallas plant. In this man- ner, the Company undoubtedly hoped to carry out its intention of operating the Denison plant non-union. While the Union was being stalled by delays in responding to correspondence and by providing no new information when letters were finally an- swered, the Company was busy covering up the tracks of the Benhil activity. The Union's final communication in August surely must have reinforced the Company in its resolve to post- pone the stick margarine lines, or it may even have been the final factor in that decision. On August 27, 1974, Holden wrote Pines as follows: The union is demanding recognition and job rights for all laid off employees of the Dallas Margarine Plant. We are demanding that these employees be employed at the Denison, Texas Margarine Plant. Since I have re- ceived no answer to my last letter dated August 16, 1974 — A-31 — we are again demanding follow the work rights for all employees employed at the Dallas Plant. We feel that these employees will be affected adversely by the opening of the Dension, Texas Plant. We are again demanding recogni- tion rights for all our employees. At about the same time that Holden’s letter was received, a top-level decision was made to call a sudden halt to the in- stallation of the Benhil machines. I find that the reason for that decision was the Company’s desire to avoid transferring the Dallas employees to Denison and operating the plant with members of Teamsters Union 767. Evidence to that effect was overwhelming; and contrary evidence, particularly as to the man- ner and timing of the decision was non-existent. The fact that the sudden decision was even made would not have been established in the record except for the fact that the Union succeeded in calling Mr. Windland from Denison as an adverse witness. He testified that the Benhil equipment for one complete line was received at the plant in August or the latter part of July, 1974. This was sufficient equipment for one line of quarter- pound production. Similar equipment for a second line was on order and would presumably have been delivered in time for installation under the engineering contract being let. However, at the end of August the plan was suddenly “scrapped”. Mr. Ben Cutrone, then General Manager of the Company’s Grocery Products Manufacturing Division, telephoned Windland and told him not to install the Benhil machines. No reason was given. His disposition of the machinery that had already been delivered is highly relevant, however. He asked Windland if the machinery had been uncrated, and when told it was still crated,. “He said just move them out in the warehouse and leave them and we'll tell you later what we want to do with them.” Later he told Windland to ship the votator (which was an item which could be used in either tub or stick margarine production, as would be true of the other votators that remained in Denison) to Pennsauken, and the remainder of the equipment, — A-32 — the items essential for stick margarine production, were to be put in storage. Windland complied by storing the items, a Benhil machine and a case packer, in a commercial warehouse. At the time of the second hearing (and presumably at the present time) that equipment was still in storage at a charge of $100 per month. It has been in Denison, unused, for over a year. In view of the fact that the Denison plant has much unused storage space in seven empty lines in the production area, plus much unused space in its warehouse where this machinery was originally moved when the installation was suddenly cancelled, I can only infer, there is no evidence to the contrary, that the Company was trying to keep knowledge of the presence of this equipment from the Union. And because the equipment remains in the Denison area the Company at all times relevant to this grievance has had a current intention of installing the equipment in Denison, the effect of which would have been to displace the Dallas operation. Windland’s only explanation for his having removed the items from the plant and having put them into monthly storage at an unnecessary cost was: “Because I was directed by my superiors to take ii out of the plant, put it into storage and said we'll tell you what to do with it later.” (Emphasis added). It is reasonable to infer that the same arrangements would have been made for the second line of Benhil equipment had it been delivered prior to the sudden cancellation of the installation plans at the end of August. While waiting for official replies to their now urgent re- quests, the Dallas employees were getting unofficial informa- tion which seemed to confirm their fears. In the latter part of August, 1974, Mr. Bill Crow, production foreman at the Dal- las margarine plant, told James Holden and Thomas Rusch, “we know that it’s going to close, that it’s going to affect this plant.” He said that “we have talked about it in the office and . . Don [Williamson] is scared. . . .” The Company called Crow as a witness and he did not deny having made the state- ments, though he said he was just giving his “own opinion.” — A-33 — I find Crow’s remarks probative for to the same reason as foreman Cunningham’s. Crow’s position was higher than Cun- ningham’s, and he was reporting from discussions “in the of- fice,” therefore his remarks carried even greater weight. Since the Company did not call Mr. Cutrone as a witness, his actions and intentions, which evidently were synonymous with the Company’s, must be evaluated on the basis of other testimony and overt conduct. Mr. Crow’s statement about the effect of the Denison plant and about the Dallas plant closing was true and fully corroborated by other evidence outlined herein. His statement is admissible; the Company’s objection to it goes to the weight of the evidence only. Had Mr. Cutrone testified to the contrary, I would have carefully weighed and consid- ered such testimony. The Company, however, called no wit- ness with personal knowledge to explain the key events elicited from Windland’s testimony or to provide contrary competent evidence bearing on motive and intent. On September 4, 1974, Union attorney Hicks wrote How- ard Pines, stating substantially what he had previously written to Book. And at long last, on September 10, Pines responded to Hol- den’s letters (a cryptic acknowledgment had been sent on August 26), but all he said was the following: I have reviewed my file, and in response to your recent letters I wish to remind you that I met and discussed the Denison Plant with you on December 8, 1973. Further- more, Mr. B. T. Hawkins and I met and discussed the Denison Plant with Mr. James Paradise and Mr. Thomas Rusch on January 24, 1974. Subsequently, on January 28, 1974, Mr. Paradise wrote a letter on your behalf, and attached is our response dated February 12, 1974. Pines thus refused to acquaint the Union with the recent events relating to the Benhil lines, and by referring with finality to discussions which had taken place almost a year earlier, on — A-34 — December 8, 1973, and January 24, 1974, he was in fact refusing to recognize and bargain with the Union over matters as to which there was a duty to supply information and bar- gain. On September 16, 1974, Rusch again wrote Pines regard- ing the Denison and Dallas margarine plants: With reference to the Denison margarine plant, the meet- ing we had in Cincinnati on January 24, 1974 had no bearing whatsoever as to the settlement of the new mar- garine plant. We again raise the question as to whether you are going to live up to Section 13 and its various paragraphs relat- ing to plant closings, departmental shut downs and new plant operations. The statements that you are referring to at our meeting of said date do not excuse you from your obligation to your present employees or laid off em- ployees of the Dallas plant. I do not care what Mr. Olsen informs you as operating manager of the margarine division, I cannot accept these answers and I will hold you and your company respon- sible for making whole any loss of wages for any laid off employees of the margarine plant while you are employ- ing employees in the new Denison margarine plant. This also relates to job opportunities for present employees working in your Dallas margarine plant. Unless you give us a written guarantee that there will be no lay offs in the present margarine plant in Dallas, Texas I will not accept the information Mr. Olsen has given vou. The Company apparently did not reply, for no reply was introduced in evidence. The Company then continued with- out assistance of the Union or the Dallas employees, to staff the Denison plant. The plant began production in the later part of — A-35 — October, 1974, and formally opened with appropriate cere- monies on November 1. After production had started, Com- pany Officials did meet briefly with Union representatives at the Airport Marina Hotel, at the Dallas-Ft. Worth Regional Air- port. The meeting was evidently timed to coincide with at- tendance of the Company officials at the plant-opening cere- monies in Denison the following day. The Company was repre- sented by Labor Relations Director Hawkins and Thomas Scully, Jr., Director of Employee Relations, Grocery Products Manufacturing Division. The Union was represented by Holden, Busch, John Hoe (of the Brewery Workers Conference), Ray Hilsheimer, President and Business Agent of Local 767, and Charles Moore, Business Representative of Local 767. The Union asked for some assurance that the people in Dallas would not be affected by the Denison operation, specifically long-term assurance was requested. Nothing came out of that meeting. The Company officials merely stated that they “knew of no plans to close the Dallas margarine plant at that time.” Mr. Hawkins also made the statement that he was opposed to even one man transferring from Dallas to Denison, a remark which was oc- casioned by the fact that one Dallas employee, Ray Daugherty, had attempted to transfer to or be hired at Denison. Over a month later, on December 3, Mr. Olsen wrote Daugherty re- fusing the request, giving as his reason the fact that on Novem- ber 21, 1974, the union had filed its formal grievance. Daugh- erty’s request, however, had been pending since May 31, 1974. The events which followed seemed anti-climatic, for the Com- pany by now had succeeded in keeping the Teamsters Union and the Dallas employees out of the Denison plant and had also avoided giving them accurate information bearing on the fu- ture of the Dallas operation and providing the “reasonable no- tice and opportunity” required in Article 13(e) for the Dallas employees to fill the replacement jobs which had already been planned for Denison. The time for reasonable notice and op- portunity had thus passed. — A-36 — On November 15, 1974, Holden wrote Williamson requesting transfer rights to Denison for 30 employees whose names were attached, and on November 21, 1974, the Union filed its formal grievance and also resubmitted the 30 names stating: “The union is requesting transfer rights for these people and any other em- ployees at the Dallas plant who wish to transfer to the Denison plant unless you can give us a firm answer that the Dallas em- ployees will not be affected.” (Emphasis added.) Accordingly, transfer rights, if applicable, would not be limited to the 30 em- ployees who signed the petition attached to Holden’s letter of November 15. The Union was bargaining agent for all of the employees in the unit and its request and the “class action” type request of the 30 named individuals was more than suf- ficient to be applicable to all Dallas employees who desire transfer. The Company's position has remained inflexible, with the only change being that it now places some reliance on the fact that on May 22, 1975, an N.L.R.B. Certification of Bargaining Rep- resentative was issued to the International Association of Ma- chinists and Aerospace Workers, District 126, AFL-CIO (here- inafter called IAM) for a production and maintenance unit at the Denison facility. The record reflects that the IAM petitioned for an election on December 6, 1974, and on December 20 the [AM and the Company, over the Teamsters’ objections, waived a hearing and entered into an agreement for Stipulation for Cer- tification upon Consent Election, with the election set for Janu- ary 23. The NLRB conducted the election and subsequent pro- ceedings without benefit of an evidentiary hearing, relying ad- ministratively on unsworn representations from the Company that “the Denison plant is fully staffed,” although it only had 26 employees and several major manufacturing lines were yet to be started up. Had the Board had the benefit of the information contained in this arbitration record, it is quite likely that it would have refused to hold the election among such an insufficient and unrepresentative contingent of employees, and it is conceivable ante MT ee —perhaps even likely (since I have the benefit of this eviden- tiary record and some hindsight) that the contract-bar doctrine would have been applied—based on the Denison plant being simply a new and enlarged version of the Dallas plant that was already under contract with the Union herein. The representa- tional egg has been scrambled, however, and it is not my province to unscramble it. All of the rights which I find herein are based upon the Company’s breaches of contract which occurred prior to the filing of the IAM’s petition. Notwithstanding its original intention to operate the Denison plant non-union, the IAM petition and its not-surprising victory in the election (which the Company apparently did nothing to discourage since the Dallas employees were not allowed to vote) seemed useful and perhaps even welcome to the Company. (But I make no such finding, for the Company attitude toward the IAM or the election has no bearing on this case.) The Company has tried to obtain some legal advantage from the IAM certifi- cation. Certification was issued on May 22, 1975, and the Com- pany and the IAM quickly reached an agreement on a contract dated June 8, 1975. The wage rates in that agreement appear to be significantly lower than comparable rates in the Dallas Teamster agreement, although I make no absolute finding to that effect. The point is relevant only to show a possible eco- nomic advantage to the Company in not dealing with the in- cumbent Dallas Union. On September 2, 1975, the Company finally announced the closing of the Dallas margarine plant. The notice said opera- tions would cease at the close of business on October 3, 1975. The Union sought to reopen the record, but this was opposed by the Company. The record was reopened for the limited purpose of receiving the notice, which reads as follows: — A-38 — September 2, 1975 To: DALLAS MARGARINE PLANT EMPLOYEES MEMBERS OF TEAMSTER LOCAL 767 © We regretfully must inform you of Standard Brands’ de- cision to permanently cease operations at the Dallas mar- garine plant at the close of business on October 3, 1975. Our national margarine sales volume during 1975 is down significantly from 1974 levels. This is a reversal of a pat- tern of growth that continued for many years. It now ap- pears to be unreasonable to expect any significant improve- ment in our margarine sales volume and this coupled with our utility service (refrigeration and steam) problems in Dallas force us to the realization that we are no longer able to sustain the Dallas margarine plant. We have met with your union representatives this morning and have informed them of the necessity for this decision. We are pleased to be able to inform you, as we informed your representatives, that we are able to offer all of our regular employees at Dallas margarine the opportunity to transfer to our other margarine plants located in Denison, Texas and Indianapolis, Indiana. These are the plants to which we will be transferring the production presently being performed here at Dallas. Copies of the labor contracts covering production employees at these plants are available upon request. Employees accepting transfers to either of these two loca- tions who have not completed their vacations, will be given lump sum payments for all unused vacation time. The Company further recognizes its obligations under Part I, Section 13 of the National Agreement, and has informed your union representatives of its willingness to sit down immediately to discuss these obligations. — spe On behalf of Standard Brands, we wish to personally thank you for your past service and wish you the best of luck in the future whether or not you elect to remain with the Company. D. R. Williamson I make no finding regarding the alleged transfer of work to Indianapolis, for there is no competent evidence to support the Company’s self-serving statement to that effect, and the evidence in the record would indicate that such disposition is unlikely. I likewise do not rely on other self-serving statements as to the reason for the closing. The Company does admit transfer of work to Denison, which is supported by the record herein. Hav- ing opposed reopening of the record regarding this notice, the Company is not in a position to complain about the absence of a finding concerning Indianapolis. I do find that the record indicates there is no reason—unless it be motivated by an anti- union desire to avoid the effect of Section 13(e)—to transfer Dallas production anywhere except Denison. CONCLUSION I have purposely set out most of the material facts in some detail, for the evidentiary basis for the conclusions herein should be fully understood. I find and hold that the Company has vio- lated the collective bargaining contract in several major respects. Accordingly the grievance will be sustained. The Company had an obligation under the contract and under the law to recognize the Union and deal with it in good faith regarding disputes for which the contract provides reme- dial procedures. The failure to deal openly with the union, the failure to provide honest and necessary information as to the Company’s intentions and plans for the Dallas plant and the effect which the Denison plant would have on the employment status of the Dallas employees, the unexcused delays in re- — A-40 — sponding to the Union’s requests, and the Company’s refusal to engage in meaningful negotiations, constituted violations of Part VIII, Section 1 of the contract. The standard for dealing with the Union under that clause, except insofar as the con- tract specifically forecloses dealing, which would not be the case here, is comparable to that required under Section 8(a) (5) of the National Labor Relations Act. This construction is reinforced by Part I, Section 15(b) of the contract, which stresses that “complete and adequate remedy is provided by the terms of this Agreement.” Had the Company dealt openly with the Union and pro- vided accurate information instead of we-have-no-plans-at-this- time responses—adequate and honest disclosures heing required under the law (see the United States Supreme Court decision in NLRB v. Acme Industrial Co., 385 U.S. 432 (1967); cf. NLRB vy. Truitt Mfg. Co., 351 U.S. 149 (1956)— it is reason- able to assume that the parties would have negotiated and resolved their differences while protecting job and contract rights which the Dallas employees had accumulated, some for more than 30 years. The naive approach which the Company asks the Arbitrator to apply to Section 13 would make a mockery of the substan- tial rights which the Union negotiated for the employees in Section I3(e). The Company contended through witnesses and counsel that if a plant was in existence, even though new, a transfer of work to it from another plant only required notice under Section 13(a) and no carrying of preferential job rights by the transferring employees. The plain meaning of Section 13(e) cannot be so easily manipulated. Transfer of work “per- manently” to a “new” plant refers to an opening and closing, but it is unrealistic to require that the opening and closing occur at exactly the same time. It is sufficient that the Denison plant was built as a replacement for and an expansion of the Dallas plant, and the evidence so indicates. Even if the Com- pany had delayed introducing stick margarine lines into the ne — | een new plant for good faith reasons, which I do not find to be the case here, the Dallas employees would still have rights, within a reasonable period of time, to have Denison treated as a new operation rather than an existing operation. Other- wise the protective language of Section 13(e) would be ren- dered ineaningless, dependent either on the convenience of the Company or the fortuitous circumstances that opening and closing days would occur simultaneously. I therefore find that the Company violated Section 13(e) by not giving the Dallas employees reasonable notice and the opportunity to fill jobs at the Denison plant. The contract may be read as referring to the entire operation at Denison, including jobs which the Dallas employees had not previously performed. However, since there are already employees assigned to those jobs and neither they nor the IAM participated in this proceeding, I do not make a finding in this case that the Dallas employees have a right to displace any employee presently engaged in soft-mar- garine or closely related operations at the Denison plant;’ this finding will be without prejudice to a construction of Section 13(e) in some other fact situation. But unquestionably the Dallas employees have rights to perform jobs in stick and bulk margarine manufacture and related operations of the type be- ing performed at Dallas. Operation of both Benhil and Mor- pak equipment would be of that type. The Company also violated Section 8(f), for the contract contemplated good faith negotiations as to transfer and plant closing problems, and such negotiations were foreclosed by the Company positions and actions. Perhaps at the root of the problem is the Company’s viola- tion of Part I, Section 14(e), which I find to have occurred in that the Company discriminated against the Dallas employees because of their Union membership and activities, a violation which would be comparable to an unfair labor practice under Section 8(a)(3) of the N.L.R.A. It was undisputed that the Company intended to operate Denison non-union, and it espe- — A-42 — cially tried to operate it without the Teamsters Union and its contract. This resulted in discrimination against the Dallas employees who were represented by: the Teamsters. To thi end, the Company gave false information, concealed information, and even hid equipment, to avoid giving knowledge of what was an established fact—that from the very beginning and at all times material hereto the Denison plant was intended as the successor plant to the Dallas plant, and that its production was intended to duplicate and therefore to displace the Dallas pro- duction. I find that but for the Union and its contract, it is un- reasonable to infer that on formal opening day, November 1, 1975, at least four lines, including two Benhil stick margarine lines, would have been operating at the Denison plant. The Dallas employees who desire to transfer to Denison are there- fore entitled to have their Denison seniority begin on the first working day any production or maintenance employee began work in Denison. The evidence indicates that such day fell in the latter part of October, 1974. I also find that the seniority provisions of the contract were violated by the Company’s actions. I shall not describe these violations in detail, however, because I am not holding the entire collective bargaining contract, with accumulated seniority, applicable to the Denison plant. Such a holding may have been appropriate before the egg was scrambled, but in view of the interest of the present Denison employees and the IAM I make no such holding and provide no such remedy. AWARD AND REMEDY— For the reasons outlined above, the Union’s grievance is sustained. ~ What is an appropriate remedy? I have tried to balance the contract rights of the Dallas employees with the interest of the present Denison employees who are wholly innocent in this —~ proceeding. Had the Company not violated the agreement initially, the Teamster’s Union, probably under the same con- tract, would most likely be the bargaining representative of the Denison employees, who would have been mostly former Dallas employees—the iecord indicates that most of them would have accepted transfer. I will not so order, however. Nor will I order the Company to displace any present employee. As well as violating other provisions, the Company did violate the con- tractual counterpart of Section 8(a)(3) of the National Labor Relations Act, for which affected employees would be entitled to be made whole as to their losses. So far, however, there have been no losses; what we are concerned with are future rights and the avoiding of losses. Accordingly, subject to the limitations noted below, I hold that all Dallas employees who desire to transfer may do so and that they will acquire new seniority based upon the first working day at the Denison plant (a day in late October, 1974, as described hereinabove), and their relative positions on the seniority roster (for all Dallas transferees will now have the same seniority date) will be based upon length of service with the Company. The Company will be required to provide suitable employment at the Denison plant, beginning the first regular work day following the termi- nation of their employment at the Dallas plant, to as many of those Dallas transferees as are required for the operation of stick or bulk margarine operations, provided however that such operations shall include at least two lines using Benhil equip- ment or the equivalent. If additional operations are added, such a [sic] Morpak lines, with or without whipped or bulk mar- garine production, any Dallas employees not otherwise assigned shall be assigned to these jobs before employment if [sic] offered to anyone else. And if vacancies occur in other production or maintenance jobs at the Denison plants, such jobs are to be filled by Dallas transferees so long as they are available and qualified to do the work. If there are any persons from the Dallas plant desiring to transfer in excess of those required for the aforesaid jobs, such persons shall be placed on a prefer- — A-44 — ential hiring list and shall have the rights of employees on permanent layoff under the contract herein. It is recognized that the addition of these several manu- facturing lines and newly transferred employees will materially alter the bargaining unit at Denison and that eventually the NLRB will have to determine the resulting questions concern- ing representation. Until that time, however, the provisions of the present Teamster contract will govern the compensation and other benefits of the employees performing work of the same nature as the Dallas operations. Such contract, how- ever, will not govern any other job in the plant even though such job may be filled by a Dallas transferee, for such job would logically be covered by the IAM contract. The parties are further required to appoint their representa- tives under Part I, Section (j) as promptly as possible for the purpose of implementing transfer and related rights provided by Section 13, as interpreted by this Award. I shall retain jurisdiction over the parties and subject matter of this grievance pending compliance with this Award. POSTSCRIPT— A personal note. Labor Arbitration usually occurs between parties to a viable collective bargaining relationship, and accord- ingly the hearing and the awards are tolerable and generally not unpleasant. I would have preferred that this case could have fallen within that norm. I regret the necessity for making sharp and specific findings which touch so closely on funda- mental attitudes toward union-management relations. But I felt I had no choice, considering my obligation to the contract, other than to make the findings which were so ineluctably re- quired by the evidence. It is my sincere hope, however, that neither party will seek undue advantage and that both parties - + = ow te — A-45 — will seek to establish a viable relationship based on mutual trust. I say this without prejudice to the rights of the em- ployees to select any representative of their own choice, but this unsolicited advice should also apply to any union which the employees should choose as their representative. /s/ Charles J. Morris Charles J. Morris Arbitrator Dallas, Texas September 20, 1975 — A-46 — DISTRICT COURTS’ FINDINGS OF FACT AND CONCLUSIONS OF LAW Northern District of Texas (Filed October 16, 1975) The application for preliminary injunction of General Ware- housemen and Helpers, Local 767, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (hereinafter “Teamsters”) came on for con- sideration before the Honorable Robert M. Hill, United States District Judge. Having heard the evidence and arguments and having considered the briefs and stipulations of the parties, the court makes the following findings of fact and conclusions of law. Findings of Fact 1. The plaintiff is a labor union who seeks to enforce a labor arbitration award rendered pursuant to a collective bargaining agreement between the parties. 2. At the hearing before this court held on Friday, October 10, 1975, the parties stipulated to facts that provide the back- ground for the present action. The stipulation was admitted into evidence as Defendant’s Exhibit No.1. The court has con- sidered the facts stipulated therein and adopts them as findings of fact. The stipulation without its exhibits is attached. Also attached is the arbiter’s award. 3. A portion of the arbiter’s award ordered the company to afford the Dallas transferees, if any, the wages and benefits outlined in the Teamster contract in effect in Dallas until such time as the National Labor Relations Board (hereinafter NB I —S “NLRB”) could determine “the resulting question concerning representation.” (Arbitration Award, page 43). 4. The wage scales in the Dallas Teamsters contract are sub- stantially higher than those in the IAM contract in Denison. Conclusions of Law 1. The court has jurisdiction of this cause pursuant to the provision of the National Labor Relations Act, 29 U.S.C. § 185. 2. The company has agreed to comply with the arbiter’s award with the exception of one provision; therefore, the court limits its consideration to the disputed issue of whether that portion of the arbitration award that gives the [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_2517%3A1. Public record. Not legal advice.