# Appendix — United Food & Commercial Workers International Union v. John Morrell & Co.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1757%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1991
- **Citation:** 500 U.S. 905

## Text

rer E”*
FiLvceéedD
MAR & 1991

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

UNITED Foop Aro COMMERCIAL WORKERS
INTERNATIONAL UNION AND ITS Local 304A

a Petitioners,

JOHN MokRELL & Co.,

Respondent.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Eighth Circuit

APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI

LAURENCE GOLD

(Counsel of Record)

DAVID SILBERMAN

815 16th Street, N.W.

Washington, DC 20006 =
(202) 637-5390

GEORGE MURPHY
NICHOLAS W. CLARK
RICHARD ROESEL

1775 K Street, N.W.
Washington, DC 20006

DONALD SHULTZ

9th & St. Joe

First Federal Plaza
Rapid City, SD 57709

WILSON - Eras Printing Co., Inc.

- 789-0096 - WasHincron, 0. C. 20001

@ Ee

)

TABLE OF CONTENTS
APPENDIX A
Opinion of the United States Court of Appeals for
the Eighth Circuit, September 7, 1990
APPENDIX B
Memorandum Opinion and Order Vacating Arbi-
trator's Award of the United States District Court,
District of South Dakota, March 15, 1989
APPENDIX C
Order of United States District Court, District of
South Dakota, May 18, 1988
APPENDIX D
Opinion of the United States Court of Appeals for
the Eighth Circuit, October 30, 1986
APPENDIX E
Memorandum Opinion and Order of the United
States District Court, District of South Dakota,
August 29, 1986
APPENDIX F
Order of the United States Court of Appeals for
the Eighth Circuit, December 6, 1990
APPENDIX G
Judgment of the United States Court of Appeals
for the Eighth Circuit, September 7, 1990
APPENDIX H
Award of Arbitrator William Rentfro, November
5, 1988
APPENDIX I

Order of Arbitrator Granting UFCW's Motion For
Further Relief, December 31, 1990

Page

In

46a

57a

70a

108a

la
APPENDIX A

UNITED STATES COURT OF APPEALS
EIGHTH CIRCUIT

Nos. 89-5109, 89-5152

JOHN MORRELL & COMPANY,

. Appellee,

LOCAL UNION 304A OF THE UNITED Foop AND COMMER-
CIAL WorKeERS, AFL-CIO; UNITED Foop AND Con-
MERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO
and CLC; DENNIS Foster, Individually and in his ca-
pacity as president of defendant Local 304A; JAMEs R.
Lyons, Individually and in his capacity as Business
Representative and Corresponding Secretary of defend-
and Local 304A; JOHN Dok and OTHER PERSONS UN-
KNOWN,

Appellants,

JOHN MORRELL & COMPANY, a corporation,
= Appellee,
LocaL UNION 304A OF THE UNITED Foop AND COMMER-
CIAL Workers, AFL-CIO and CLC; UNITED Foop and
COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-
C10 and CLC,
Appellants.

Submitted Dec. 13, 1989
Decided Sept. 7, 1990

Before MCMILLIAN, JOHN R. GIBSON and BOW-
MAN, Circuit Judges.

2a
JOHN R. GIBSON, Circuit Judge.

The Unions representing workers at John Morrell &
Company's plant in Sioux Falls, South Dakota appeal a
$24.6 million jury award entered against them in favor
of Morrell. The jury found that the Unions had breached
the no-strike clause of the parties’ collective bargaining
agreement by engaging in sympathy strikes. The district
court,’ 708 F.Supp. 273, entered judgment for Morrell and
also vacated an arbitration award, issued between the lia-
bility and damages phases of the bifurcated jury trial,
that had held that the no-strike clause did not bar sym-
pathy strikes. The Unions now appeal and argue that the
district court erred by: (1) submitting the issue of
whether the collective bargaining agreement prohibited
sympathy strikes to the jury; (2) making various rul-
ings during the damages phase of the trial; and (3) va-
cating the arbitration award. We affirm the judgment of
the district court.

Morrell operates a meat packing business and has
plants at various locations, including Arkansas City,
Kansas; Sioux City, lowa; and Sioux Falls, South Dakota.
Both Local 304A of the United Food and Commercial
Workers, and the United Food and Commercial Workers
International Union ‘collectively the “Unions”) represent
the Sioux Falls employees. On July 1, 1986, the Arkansas
City workers went on a lawful strike designed to secure
a new collective bargaining agreement with Morrell. To
increase the economic pressure on Morrell, Arkansas City
employees traveled to the Sioux Falls plant and estab-
lished picket lines there on August 4 and 15, 1986. On
both occasions, the Sioux Falls workers honored these
picket lines and refused-to report to work.

Morrell then sought to enjoin the Sioux Falls employees
from striking under section 301 of the Labor Management

— —

The Honorable Richard H. Ratten, United States District Judge
for the District of South Dakota,

3a

Relations Act, 29 U.S.C. § 185 (1988). Morrell alleged
that the Sioux Falls employees breached the no-strike
provision of their collective bargaining agreement by
honoring the picket line established by the Arkansas City
employees. The clause provides that:

Provisions having been made by this Agreement
and local agreements for the peaceful and orderly
settlement of any disputes which may arise between
Company and the Union or local Unions or any Em-
ployee or Employees, it is agreed that during the
term of this Agreement there shall be no strike step-
page, slowdown, or suspension of work on the part
of the Union or any local Union or any Union mem-
ber or lockout on the part of the Company on account
of such disputes until after an earnest effort shail
be made to settle all such matters in the manner
provided in the respective agreements,

(1985-88 Sioux Falls Collective Bargaining Agreement,
Article II, el. 4).

After an expedited evidentiary hearing, the district
court «ranted Morrell preliminary injunctive relief. Upon
expedited appeal to this court, we vacated the injunction *

— —

2 Selected provisions of the Sioux Falls collective bargaining
agreement are set out in an Addendum following this opinion.

The district court found that the August 15 strike was not a
sympathy strike but was actually a protest over Morrell’s discipl-
nary actions toward workers who had honored the August 4 strike.
Since the court found that this was a strike ever an arbitrable
grievance, it could be enjoined under the narrow exception to the
statutory prohibition against enjoining strikes announced in Boys
Markets v. Retail Clerks Union, Local 779, aun U.S. 235, 255, 90 S.Ct.
1588, 1594, 26 I. Ed 2c 199 (1970). Upon appeal, this court found
“no evidence in the record” to support the district court's conelu-
sion that the August 15 strike was not a sympathy strike. John
Morrell & Coa. . Local Union 104A of the United F 4 Commer
cial Workers, 804 F.2d 457, 461-62 (Sth (ir. 16 (per curiam),
cert. denied, 481 U.S. 1014, 107 S.Ct. 1889. 95 L.Ed.2d 496 (1987).

4a

because the strikes were sympathy strikes,“ as opposed to
economic strikes, and thus could not be enjoined under
the Norris-LaGuardia Act, 29 U.S.C. 8 104 (1988). John
Morrell & Co. „. Local Union 304A of the United Food
& Commercial Workers, 804 F.2d 457 (Sth Cir.1986)
(per curiam), cert. denied, 481 U.S. 1014, 107 S.Ct.
1889, 95 L. Ed.2d 496 (1987). After remand to consider
Morrell’s claim for damages, and while discovery was in
progress, employees of the Sioux City, Iowa plant also
commenced a lawful strike in an effort to obtain a new
collective bargaining agreement. The Sioux City workers
picketed the Sioux Falls plant, as the Arkansas City
workers had done, and the Sioux Falls workers again
honored the picket line. This strike at the Sioux Falls
plant lasted from May 1 to November 4, 1987. Morrell
then filed an amended complaint seeking damages based
on that most recent strike, and that case was consolidated
with the other pending actions.

Upon the Unions’ motion for summary judgment, the
district court * ruled both that the refusal by the Sioux
Falls workers to cross the pici.et line in 1987 was a
sympathy strike in support of the Sioux City workers,
as opposed to an economic strike, and that it was for a
jury to decide whether the collective bargaining agree-
ment barred such strikes. The case was then transferred
to the Western Division of the District of South Dakota
where the court reconsidered the Unions’ motion for
summary judgment and held that a jury should decide
both: (1) whether the 1987 strike was a sympathy strike;

*An economic strike is a “cessation of work by employees to
enforce economic demands upon the employer ia contrast to a strike
caused by an unfair labor charge.” Black's Law Dictionary 1276
(5th ed.1979). “A sympathy strike involves two unions; one is strik-
ing to force some concession from the employer; the other strikes in
sympathy with the first’s objectives. Sympathy strikes are a com-
mon manifestation of traditional union solidarity.” Id.

5 The Honorable John B. Jones, United States District Judge for
the District of South Dakota.

5a

and (2) whether the no-strike provision of the collective
bargaining agreement prohibited sympathy strikes.

The case then proceeded to trial before a jury. The
Unions moved for a directed verdict based upon their as-
sertion that, as a matter of law, the collective bargaining
agreement did not bar sympathy strikes. The motion
was denied. The case was submitted to the jury on
special interrogatories and, on March 10, 1988, the jury
returned a verdict for Morrell on liability because it
found that: (1) the 1987 strike was a sympathy strike;
and (2) the Sioux Falls workers were prohibited from
engaging in sympathy strikes by the no-strike provision
in the agreement.

After the 1987 sympathy strike had concluded, but
before this jury verdict, the Sioux Falls workers sought
to return to work and replace the workers hired in their
absence. Morrell refused to recall the strikers. The
Unions filed grievances on behalf of these workers in
which they argued that the collective bargaining agree-
ment permitted sympathy strikes and that the agree-
ment’s seniority provisions required Morrell to rehire the
sympathy strikers in place of less-senior replacements.
Morrell denied the grievances, and the Unions sought
arbitration of the issue.

After the liability phase of the jury trial had con-
cluded, but during the damages phase of the trial, the
arbitrator issued an award in favor of the Unions which
sustained the grievances. Despite the earlier jury ver-
dict that the no-strike clause prohibited sympathy strikes,
the arbitrator independently examined the meaning of
the no-strike clause and concluded that it did not waive
the workers’ right to engage in sympathy strikes. Based
upon this ruling, the arbitrator held that the strikers
were entitled to exercise their seniority rights and re-
place the workers hired during the sympathy strike.

The arbitration award was issued on November 5,
1988, and the damages phase of the jury trial concluded

6a

on November 10, 1988. The jury awarded Morrell $24.6
million in damages based upon lost profits during the
strike.

Morrell then filed a motion to vacate the arbitration
award and the Unions filed a motion to enforce the
award. The two actions were consolidated. The district
court vacated the award because it held that the arbi-
trator had exceeded his authority by deciding the issue
of the legality of sympathy strikes since Morrell had not
consented to arbitrate that issue. Alternatively, the court
held that the award should be set aside Lecause the
doctrine of res judicata bound the aribtrator to the jury's
resolution of the issue during the liability phase of the
trial. The Unions now appeal the court’s judgment va-
cating the arbitration award. We will discuss their ar-
guments and provide further factual details as raised
in the context of these issues.

The Unions contend that the district court should not
have allowed the jury to determine the legal effect of the
no-strike clause on the Sioux Falls workers’ right to
engage in a sympathy strike. They advance several argu-
ments in support of this contention and we will consider
each in turn. They also challenge the court’s ruling that
a Morrell internal memorandum offered into evidence by
the Unions was protected by attorney-client privilege.

A.

We begin by determining the effect of our earlier deci-
sion, 804 F.2d 457, on the issues raised in this appeal.
The Unions urge that this earlier opinion held that the
Sioux Falls collective bargaining agreement did not bar
their right to participate in sympathy strikes. They spe-
cifically rely upon the following language: “To the extent
that the district court found that the first strike was a
sympathy strike, that the parties’ no-strike clause did not

8a

ings made by the district court, we apply the clearly
erroneous standard. Judicial precedent supports our con-
clusion. See Local Union No. 150-A, United Food &
Commercial Workers Intl Union v. Dubuque Packing
Co., 756 F.2d 66, 69 (8th Cir.1985); Press Mach. Corp.
vu. Smith R. P. M. Corp., 727 F.2d 781, 784 (8th Cir. 1984);
Motor Carriers Council v. Local No. 600, Affiliate of Int’l
Bhd. of Teamsters, 486 F.2d 650, 653 (8th Cir.1973).
Moreover, the cases cited by Morrell are not inconsistent
with our conclusion. See Arkansas Rice Growers Coop.
Ass’n „. Alchemy Indus., 797 F.2d 565, 567 (8th Cir.
1986) (stating that the construction of a contract is a
question of law but review of disputed extrinsic evidence
is governed by the clearly erroneous standard); Landro
„. Glendenning Motorways, 625 F.2d 1344, 1352 (8th
Cir.1980) (examining factual findings under the clearly
erroneous standard after determining that the contract
was ambiguous).

C.

We now apply these standards to the issues before us.
The Unions assert that the district court should not have
submitted the question of whether the no-strike clause
barred sympathy strikes to the jury or admitted extrinsic
evidence for interpretive purposes because the clause is
unambiguous. They also assert that the evidence was
insufficient to support a verdict in favor of Morrell. We
believe it would be helpful at this point to set out some
basic principles of contract law and labor law to aid in
our resolution of these issues.

Extrinsic evidence may not be considered “for the
purpose of showing that the parties intended to make an
agreement which is inconsistent with the unambiguous
words of their written contract.” St. Louis Union Trust
Co. „. United States, 617 F.2d 1293, 1300 (8th Cir.1980).
Although extrinsic evidence may not be admitted to con-
tradict the parties’ intentions as expressed in the writing,
it can be admitted to demonstrate that ambiguity exists.
Press Mach. Corp., 727 F.2d at 784-85; S. Williston, A

ga

Treatise on the Law of Contracts § 600A, at 299-310 (3d
ed. 1961). To determine whether there is an ambiguity,
we must examine the relevant extrinsic evidence and de-
cide whether the contractual language is reasonably sus-
ceptible of the meaning proposed by the party asserting
the ambiguity. The Realex Chemical Corp. v. S.C. John-
son & Son, 849 F.2d 299, 302 (8th Cir.1988). If we
decide that the language is ambiguous, then resolution of
the ambiguity is a question of fact to be determined by
the jury. Thomas v. Bakery, Confectionery & Tobacco
Workers Union Local No. 433, 826 F.2d 755, 764 (8th
Cir.1987), cert. denied, 484 U.S. 1062, 108 S.Ct. 1019,
98 L.Ed.2d 984 (1988); Press Mach. Corp., 727 F.2d at
784: Williston, supra § 616, at 652. The jury may prop-
erly consider extrinsic evidence in resolving the ambi-
guity.“ Press Mach Corp., 727 F.2d at 784.

We must apply these principles of contract law in the
context of the labor law principles implicated here. See-
tion 7 of the National Labor Relations Act, 29 U.S.C.
£157 (1988), generally grants employees the right to
engage in sympathy strikes in support of a lawful strike
by another union.“ Amcar Div., ACF Indus. v. NLRB,
641 F.2d 561, 566 (Sth Cir. 1981). This right may be
waived expressly or impliedly; however, an implied waiver
must be established only by “clear and unmistakable” evi-
dence. Metropolitan Edison Co, v. NLRB, 460 U.S. 693,
708. 103 S.Ct. 1467, 1477, 75 L.Ed.2d 387 (1983). “In

The Unions appear to argue that juries may use extrinsic evi-
dence to interpret only unconditional, but not conditional, no-strike
clauses. We see no basis in the law for such a distinction

7 It is not certain that this right extends to situations where the
picket line is unrelated to the union that wants to honor it. See
trod. Through the Window of Le gislative History: A View on the
Employees’ Statutory Riaht to Honor a Stranger Picket Line, 35
Kansas L.Rev. 9, 31 (1986) (suggesting that the Eighth Circuit, in
NLRB v. L.G. Everist, Inc., 334 F.2d 312 (Sth Cir. 1964), appears
to have decided that honoring a stranger picket line is not protected
by the National Labor Relations Act).

— —

lOa

determining whether there has been a waiver of the right
to enguge in sympathy strikes, the collective bargaining
agreement must be interpreted as a whole and in light
of the law relating to it when made.” Amear, 641 F.2d
at 566-67. Amear also instructs us that:

There are a number of relevant facts to examine in
determining whether the Union intended to waive its
right to engage in sympathy strikes. We look to the
language of the contract, the structure of the con-
tract, the bargaining history, and any other relevant
conduct of the parties that shows their understand-
ing of the contract.

Id. at 567. See also lowa Beef Processors „. Amalqa-
mated Meat Cutters, 597 F.2d 1138, 1144 (Sth Cir.)
‘examined language, external circumstances, and policy
considerations to determine whether the right had been
Waived), cert. denied, 444 US. 840, 100 S.Ct. 79. 62
I. Ed.2d 52 (1979).

Thus, we must next decide whether the no-strike clause
is “ambiguous” in the sense that it is reasonably sus-
ceptible of the meaning proposed by Morrell, namely, that
the Unions, in clear and unmistakable terms. waived
their right to engage in sympathy strikes. Once we de-
termine that the language is susceptible of this interpre-
tation, then the issue is submitted to the jury to resolve

»The jury instruction, which the parties did not object ta, cor-
rectly required Morrell to prove, by a preponderance of the evidence,
that the Unions had clearly and unmistakably waived their right to
engage in sympathy strikes. The instruction provided, in part, that:

Even if you should decide that the strike was in fact a sym-
pathy strike, the plaintiff Morrell may still be entitled to a ver-
dict should you find by a preponderance of the evidence that
the defendants, clearly and wnm istakably, waived, relinquished,
or gave up the right to engage in such sympathy strikes when
they signed a collective bargaining agreement with Morrell
November 20, 1988.

In determining this issue you are entitled to examine the
contract language, the structure of the contract, the bargaining

lla

the ambiguity and decide if waiver has occurred. The
Unions rely upon Barrett v. Safeway Stores, 538 F.2d
1311, 1313 (Sth Cir.1976) (per curiam), for the prop-
osition that the contractual language here were unam-
biguous as a matter of law. We reject the comparison.
Flor an unresolved ambiguity to constitute a genuine
factual issue, we believe that the record as a whole must
permit a rational trier of fact to find for the nonmoving
party.” Realer, 849 F.2d at 302. As stated previously,
we may review extrinsic evidence in making this deter-
mination and, upon doing so, we are convinced that this
standard was satisfied.

The Unions argue that an examination of extrinsic
evidence still does not yield an ambiguity. They contend
that the no-strike provision is expressly linked to the
grievance-arbitration procedure and, therefore, it applies
only to strikes over arbitrable disputes. The arbitrator,
who considered the meaning of the no-strike clause as
well as the recall issue, was persuaded by this “cotermi-
nous application” argument. He stated that:

This clause clearly references and contemplates a
direct connection with the arbitration provisions of
the contract. It states that provisions have been
made for “peaceful and orderly settlement of any
disputes” which may arise between the Company
and the Union. It then states “there shall be no
strike . . on account of such disputes.” ... Thus,
the contract itself expresses the doctrine of cotermi-
nous application. If this were not enough—and the
Arbitrator thinks it is—the contract also conditions
the promise not to strike on exhaustion of contrac-
tual efforts to settle the dispute. Since there are no
available means under the contract for settling a
primary dispute involving a separate bargaining

history and other relevant evidence which the Court admits for
your consideration on the issue of the intent of the parties

(Appellant’s Appendix, Vol. I, at 124) (emphasis added).

12a

unit with an expired contract, sympathy strikes are
clearly allowed.

(Award of Arbitrator, Nov. 5, 1988, at 16-17) (em-
phasis added).

We are not similarly convinced. The doctrine of co-
terminous interpretation arose in the context of collec-
tive bargaining agreements that contained an arbitra-
tion clause but lacked an express no-strike clause. In
Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 82
S.Ct. 571, 7 L.Ed.2d 593 (1962), the parties’ agreement
did not have a no-strike provision, but the Supreme
Court nevertheless held that the express arbitration
clause created an implied duty not to strike over disputes
subject to arbitration. Id. at 105, 82 S.Ct. at 577. The
union in Lucas Flour was thus liable for damages flow-
ing from breach of the implied duty to refrain from
striking. The Supreme Court has also applied the doc-
trine of coterminous interpretation in the injunction con-
text to hold that an agreement, containing an arbitration
clause but not a no-strike clause, created an implied no-
strike duty and, therefore, that a court could enjoin the
strike. Gateway Coal Co. v. UMW, 414 U.S. 368, 382,
94 S.Ct. 629, 639, 38 L.Ed.2d 583 (1974).

These decisions, however, do not compel the conclusion
that the doctrine of coterminous interpretation applies
to the situation before us. We are not faced with an
agreement lacking a no-strike clause, as in Lucas Flour,
nor do we have to determine the availability of injunctive
relief, as in Gateway Coal. The issue confronting us is
whether the parties’ express no-strike provision has been
breached so that the Unions are liable for damages. The
Supreme Court has recognized that a strike which is not
subject to injunction under the Norris-LaGuardia Act
may nevertheless violate the parties’ no-strike clause and
subject the striking party to other remedies, such as dam-
ages. Buffalo Forge Co. . United Steelworkers, 428 U.S.
397, 410-11, 96 S.Ct. 3141, 3148-49, 49 L.Ed.2d 1022

13a

(1976). See also Jacksonville Bulk Terminal v. Interna-
tional Longshoremen’s Ass'n, 457 U.S. 702, 721-22, 102
S.Ct. 2672, 2684-85, 73 L.Ed.2d 327 (1982) (stating that
the issue of whether the strike was enjoinable is separate
from the issue of whether the no-strike clause was vio-
lated.

In light of this precedent, we have previously distin-
guished between express and implied no-strike clauses,
and held that the coterminous interpretation doctrine
limited the effect of no-strike clauses to arbitrable dis-
putes only in the latter case.“ Jowa Beef Processors, 597
F.2d at 1145. If an agreement contains an express no-
strike clause, then “the no-strike provision must be in-
terpreted in light of the whole contract, rather than by
looking only to the arbitration clause.” Id. We stated
that the issues raised by the arbitration and no-strike
clauses remained analytically distinct, id., and further
stated that, [u]ltimately, each depends on the intent of the
contracting parties.” Jd. (quoting Gateway Coal Co. v.

Other circuits have also reached this conclusion. The Sixth
Circuit, in Ryder Truck Lines v. Teamsters Freight Local Union
No. 480, 727 F.2d 594 (6th Cir.) (en banc), cert. denied, 469 U.S.
825, 105 S.Ct. 103, 83 L.Ed.2d 48 (1984), provides an excellent dis-
cussion of the doctrine of coterminous application and concludes that
“no-strike clauses need not be construed narrowly to prohibit strikes
only over arbitrable disputes.” Id. at 601. The court declared that:

Indeed, to hold that no-strike clauses must be construed as
prohibiting only strikes over arbitrable issues would under-
mine the fundamental premise of freedom of contract on which
federal labor policy is based by undercutting management's
ability to obtain “an across-the-board no-strike clause and
labor’s ability to gain concessions in return for such a pledge.”

Id. (quoting Pacemaker Yacht Co. v. NLRB, 663 F.2d 445, 460 (3d
Cir.1981)). In United States Steel Corp. r. NLRB, 711 F.2d 772
(7th Cir.1983), the Seventh Circuit held that the question of
whether a no-strike clause barred sympathy strikes was to be
answered by examining the contract and bargaining background,
rather than by applying the principle of coterminous application.
Id. at 776-78.

l4a

UMW, 414 U.S. 368, 382, 94 S.Ct. 629, 639, 38 L.Ed.2d
583 (1974)+. We do not believe that the Jowa Beef
Processors holding is limited to cases involving broad no-
strike clauses. Such a litmus test would not yield a result.
founded upon the intent of the parties.

The cases cited by the Unions do not require a contrary
conclusion. While Gary Hobart Water Corp. v. NLRB,
511 F.2d 284 th Ciro, cert. denied, 423 U.S. 925, 96
S.Ct. 269, 46 I. Ed.2d 252 (1975), applied the doctrine of
coterminous interpretation to an express no-strike clause,
that case must be read in light of the Seventh Circuit’s
later decision in United States Steel Corp. „. NLRB, 711
F.2d. 772 (7th Cir. 1983), where the court refused to
apply the doctrine when the extrinsic evidence indicated
that the parties intended otherwise. /d. at 778-80. Simi-
larly, in Pacemaker Yacht Co. „. NLRB, 663 F.2d 455
(3d Cir.1981), the Third Circuit refused to interpret
a no-strike clause coterminously with the arbitration
clause after examining the agreement as a whole, the
statements of union officials, and the state of the law
when the agreement was executed. Id. at 458-59. Sce
also NLRB v. Gould, Ine, 638 F.2d 159, 164 (10th Cir.
1980) (applying the coterminous interpretation doctrine
to an express no-strike clause after finding that there
was no extrinsic evidence to indicate that the parties
intended to the contrary}, cert. denied, 452 U.S. 930,
101 S.Ct. 3065, 69 L.Ed.2d 430 (1981).

We are satisfied that the doctrine of cotermious ap-
plication does not govern our interpretation of the no-
strike clause before us. Rather, we are to determine the
scope of the clause by examining the language of the
agreement and the external circumstances of the contro-
versy. /owa Beef Processors, 597 F.2d at 1144.

We now turn to the extrinsic evidence offered by
Morrell in support of its interpretation of the no-strike
clause. At a hearing before the district court, Morrell
identified other provisions of the collective bargaining

l5a

agreement indicating that the parties wanted the no-
strike provision to apply to sympathy strikes. Paragraph
3 of Article Il of the agreement declares that the agree-
ment shall “establish the means to facilitate peaceful
adjustments of all grievances or other disputes that may
arise between the Company and th Union.” (Emphasis
added}. The Unions claim that this language is merely
hortatory, but we are not convinced. It is well-established
that, “|ijnterpreting a collective bargaining agreement,

. . We must construe the contract as a whole.“ Amcar,
641 F.2d at 569. See also United States Steel Corp., 711
F.2d at 778 ‘examining the introductory provisions of
the collective bargaining agreement to determine the
parties’ intent in a no-strike clause).

Morrell also argues that the “struck work” clause in
paragraph 6 of Ariicle I] supports its interpretation.
This provision allows Sioux Falls workers to refuse to
perform work transferred from striking plants of other
employers but expressly obligates the workers to accept
work transferred from another Morrell plant which is on
strike. That protection would be rendered meaningless
if Sioux Falls employees could avoid their contractual
duty to accept work from striking plants by simply
engaging in a sympathy strike.

Furthermore, Morrell supported its position by pre-
senting evidence of the parties’ bargaining history. There
was evidence that a union negotiator believed that the
earlier no-strike clause, which was in effect from 1954
to 1056, barred all strikes. In 1956, Morrell proposed the
no-strike clause which is currently in effect and before
this court. It would be irrational to suggest that Morrell
intended to limit the reach of the no-strike clause rather
than maintaining the status quo.

In sum, we are satisfied that Morrell presented suffi-
cient extrinsic evidence to establish that the no-strike
clause was susceptible to the meaning that it proposed.
Therefore, the district court properly allowed the jury to

l6a

decide the issue of whether the Unions waived their right
to engage in sympathy strikes in clear and unmistakable
terms.

Alternatively, the Unions argue that the jury’s verdict
was not supported by the evidence. In considering this
challenge, we must bear in mind that “evidence is to be
considered in the light most favorable to the verdict,”
Cerro Gordo Charity v. Firemen’s Funded Am. Life Ins.
Co., 819 F.2d 1471, 1485 (8th Cir.1987), and that we
may overturn the jury’s verdict only if “the evidence is
suspectible to no reasonable inferences sustaining it,“ id.
Under this demanding standard, our review of the evi-
dence compels us to conclude that the jury verdict must
stand.

Morrell provided evidence of the 1982 and 1985 contract
negot int ions.“ During the 1982 negotiations, a Morrell
negotiator stated that the company was considering pro-
posing a change to the no-strike provision because of
unauthorized strikes at other plants. A negotiator for
the Unions responded that the current no-strike clause
sufficiently protected the company. Morrell’s negotiator
then agreed that no changes were needed. While the
Unions argue that this discussion referred to wildcat
strikes and slowdowns, and not to sympathy strikes, it
nevertheless evidences the parties’ intent to resolve dis-
putes through the grievance and arbitration process and
to avoid strikes.

Evidence of the 1985 negotiations is even more power-
ful. There was testimony that the Unions repeatedly
proposed changes in the collective bargaining agreement
which would explicitly permit sympathy strikes. All such

The Unions complain that Morrell failed to present any evi-
dence of the circumstances in 1956 leading to the inclusion of the
current no-strike clause. We have recognized, however, on a previ-
ous occasion, that the reasons for lack of change may be more
significant than the circumstances surrounding the origina! negotia-
tions. Amcar, 641 F.2d at 567.

17a

proposals were rejected by Morrell. Morrell adamantly
refused such requests because the changes would essen-
tially eviscerate Article I] of the agreement.

The Unions concede that they sought to insert language
permitting sympathy strikes and barring the transfer of
work from plants on strike. They contend, however, that
such changes were sought for all employees of packing
houses represented by the International and local unions.
They also argue that such proposals were not admissions
but merely manifested a desire for explicit assurance of
pre-existing rights. We note initially that this argument
uppears to indicate that the language was ambiguous.
Regardless, we have previously declared that “an attempt
by the Union to add such a [sympathy strike] provision
is significant in inferring that the Union waivled]
its right to engage in sympathy strikes.“ Amear, 641
F.2d at 567 (citing NLRB v. Rockaway News Supply Co.,
345 U.S. 71, 79-80, 73 S.Ct. 519, 524-25, 97 L.Ed. 832
(1953)), which considered the union’s proposal to ex-
pressly permit refusals to cross a picket line as evidence
of the parties’ intent in their no-strike clause). These
arguments were before the jury, and when we view this
evidence in the light most favorable to the verdict, we
conclude that the jury’s verdict must be sustained.

D.

The Unions also challenge an evidentiary ruling that
the district court made during the liability phase of the
trial. The court held that an internal memorandum writ-
ten by Morrell’s general counsel, which came into the
Union's possession because of another lawsuit, was pro-
tected by attorney-client privilege. We affirm the court's
ruling on this issue.

Prior to the action before us, a group of Morrell em-
ployees at another plant brought a class action against
Morrell and the United Food and Commercial Workers
International Union, one of the unions involved in this

18a

appeal, concerning a plant closing. See Aguinaga v.
Unitd Food & Commercial Workers Int’l Union, 720
F.Supp. 862 (D.Kan.1989) ; Aguinaga v, John Morrell &
Co., 713 F.Supp. 3¢8 (D.Kan.1988); Aguinaga v. John
Morrell & Co., 602 F.Supp. 1270 (D.Kan.1985). Morrell
reached a settlement with the employee class but the
International Union filed cross-claims against Morrell.
Morrell and the employee class entered into a joint defense
agreement whereby Morrell gave the employees access to
seventeen privileged documents for use in their case
against the International Union. Morrell waived its privi-
lege as to four of these documents for use at trial. Five
more of the documents, however, came into the Interna-
tional Union’s possession when the employees’ expert wit-
ness turned over files at his deposition. As a result, the
International Union gained access to the internal memo-
randum in issue here, which is referred to as the Gass
memorandum. The district court ruled that the document
was shielded by attorney-client privilege and the doctrine
of work-product immunity. It held that Morrell’s waiver
of privilege as to the initial four documents did not con-
stitute a waiver as to the remaining documents. There-
fore, the five documents which inadvertently came into
the International Union’s hands, including the Gass memo-
randum, were inadmissible in the Aguinaga case.

The Unions in this appeal sought to introduce the Gass
memorandum into evidence in the district court below
for the purpose of showing Morrell’s belief that the no-
strike clause did not prohibit sympathy strikes. The court
below also held that attorney-client privilege barred ad-
mission of the evidence.

The Aguinaga employees and Morrell shared a joint
defense privilege by virtue of being aligned on the same
side following their settlement and the International
Union’s cross-claims. See Medcom Holding Co. v. Baxter
Travenol Laboratories, 689 F.Supp. 841, 844 (N. D. III.
1988); Western Fuels Ass’n v. Burlington N. R.R., 102

19a

F. R. D. 201, 203 (D.Wyo.1984). “{W]hen information 1s
exchanged between various co-defendants and their attor-
neys|,] ... this exchange is not made for the purpose
of allowing unlimited publication and use, but rather, the
exchange is made for the limited purpose of assisting in
their common cause.” Wilson P. Abraham Constr. Corp.
„. Armco Steel Corp., 559 F.2d 250, 253 (5th Cir.1977)
(per curiam). It is fundamental that “the joint defense
privilege cannot be waived without the consent of all
parties to the defense.” Ohio-Sealy Mattress Mfg. Co. v.
Kaplan, 90 F.R.D, 21, 29 (N. D. III. 1989; see also Western
Fuels Ass'n, 102 F. R. D. at 203.

Thus, neither the Aguinaga employees nor its counsel
could waive the privilege on Morrell’s behalf, and there is
no evidence that Morrell itself waived the privilege. As
the Ayuinaga court held, Morrell’s waiver as to four docu-
ments did not waive its privilege as to the rest. The fact
that the Unions inadvertently gained access to the other
documents does not affect this ruling.

The Unions argue that Morrell waived its privilege
by allowing its general counsel to testify in the Agui-
naga trial concerning one of the four documents which
Morrell had agreed to release. While the Unions cor-
rectly recognize that a waiver of privilege as to one com-
munication may extend to other communications relating
to the same subject matter, United States v. Jones, 696
F.2d 1069, 1072 (4th Cir.1982) (per curiam); United
States v. Cote, 456 F.2d 142, 144-45 (8th Cir.1972), this
argument is unavailing here. The released document
neither involves sympathy strikes nor the _ no-strike
clause. The documents were insufficiently linked for
waiver as to one to constitute waiver as to the other.

II.

The Unions challenge several aspects of the damages
phase of the trial. First, they contend that the district
court should not have excluded either evidence offsetting

20a

damages due to the lower wage rates of the replacement
workers, or evidence of an Occupational Safety and
Health Administration (OSHA) report discussing condi-
tions at the Sioux Falls plant. Second, they argue that
Morrell failed to prove that its damages were contem-
plated by the contract. Finally, they contend that the
damages verdict was speculative. We will consider these
claims of error separately.“

A.

Morrell claimed damages only for its profit lost during
the strike. At trial, the Unions attempted to present evi-
dence that Morrell's losses due to the strike were par-
tially offset by the lower wages Morrell paid replacement
workers after the strike. The district court excluded the
evidence under Federal Rule of Evidence 403.

The Sioux Falls collective bargaining agreement al-
lowed Morrell to pay lower wages to employees who had
worked for Morrell for less than one and one-half years.
Morrell paid the 2,200 replacement workers this lower
‘ate, and the Unions contend that the damage award
should be reduced to reflect the difference between the
cost of paying the old workers and the cost of paying the
replacement workers. This argument is directed solely at
post-strike labor savings. At trial, the Unions were cred-
ited with all strike-related cost savings, including the
lower wage rate paid during the strike, in determining
Morrell's total damages during the strike period. (Tr.
1702-06).

We note initially the well-established principle that a
“trial court's exclusion of evidence under Fed. R. Evid. 402

The Unions assert other prejudicial errors based on the follow-
ing: (1) the court referred to the Unions’ conduct as “illegal:” (2)
Morrell was permitted to show that the Unions intended to injure
the company; (3) the Unions were not permitted to explain that the
contract breach was a sympathy strike; and (4) Morrell was allowed
to present evidence about violence at another striking plant. We
reject these claims, and they do not merit further discussion

22a

ment to a “ballpark” estimate of the effect of the offset
on Morrell’s damages. (Appellee’s Appendix at 149-50,
178, 181-85).

In sum, we are satisfied that the Unions failed, as a
matter of law, to meet their burden on this issue. There-
fore, we hold that the district court did not err by ex-
cluding this evidence.

B.

At trial, the Unions offered into evidence a report by
OSHA investigators concerning conditions at the Sioux
Falls plant. The court excluded the evidence under Fed-
eral Rule of Evidence 403, and the Unions now challenge
this ruling.

According to the Unions, the OSHA report provided
evidence that the plant was violating OSHA require-
ments by assigning too few workers for difficult tasks,
providing inadequate tools o equipment, and operating
conveyor chains at excessive speeds. The Unions argue
that this supports their theory that replacement workers
were unable to achieve the desired performance levels
because of plant conditions, and not as a result of the
strike.

We review the district court’s ruling with substantial
deference, Hawkins, 900 F.2d at 155, and conclude that
there was no error in excluding this evidence. The Un-
ions argue that Morrell’s damages resulting from operat-
ing in violation of law are not recoverable. See Gibbs
„. UMW, 343 F.2d 609, 618 (6th Cir.1965), rev'd on
other grounds, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d
218 (1966). We reject the OSHA report as evidence on
this theory because it contained merely unproven allega-
tions of violations. Furthermore, the Unions failed to es-
tablish the necessary causal link between lost profits and
safety violations. Therefore, we conclude that the court
correctly determined that this evidence was insufficiently
probative to outweigh the potential for prejudice.

23a

C.

The Unions argue that Morrell failed to prove that its
damages claims were contemplated by the parties in their
collective bargaining agreement. They correctly assert
that Morrell’s damages award may consist only of “the
actual loss sustained ... as a direct result of the breach
and which may reasonably be supposed to have been in
the contemplation of the parties as the probable result
of such a breach at the time the agreement was made.“
Eazor Express v. International Bhd. of Teamsters, 520
F.2d 951, 966 (3d Cir.1975), cert. denied, 424 U.S. 935,
96 S.Ct. 1149, 47 L.Ed.2d 342 (1976). We are satis-
fied, however, that Morrell’s damages award meets this
standard.“

The Unions contend that the parties had not contem-
plated damage claims for worker inexperience and in-
efficiency. In support of this, they identify a contractual
provision requiring all workers to become objectively
“qualified” for a job within two weeks. A union official
testified that workers can become “qualified” for any job
in the plant within two weeks. Based upon this, the
Unions claim that Morrell should not be permitted to re-
cover damages resulting from other subjective measures
of replacement worker efficiency.

This argument is patently untenable. The contract
provision to which the Unions refer concerns Morrell’s
ability to transfer employees between departments and
does not support the proposition that a worker can ef-
ficiently perform any job in the plant, including skilled
butchering, within two weeks. It was the jury’s fune-
tion, not this court’s, to weigh the value and credibility

of the union official’s testimony on worker efficiency.
Furthermore, we reject the Unions’ assertion that the

12 Morrell claims that the Unions waived this foreseeability argu-
ment by failing to object at trial to Morrell’s offers of proof on
these damages claims. We need not decide this issue, however,
because we reject the Unions’ argument on other grounds.

24a

contractual provision authorizing lower wages for new
workers was intended by the parties to be a form of
liquidated damages.

We also reject the Unions’ argument that losses suf-
fered by Morrell’s distribution centers, which are ware-
houses selling Morrell products, were unrecoverable. It
was within the contemplation of the parties that a strike
slowing down production at the Sioux Falls plant would
adversely affect distribution centers selling Sioux Falls
products, and thus such losses were properly recoverable.

D.

Finally, the Unions argue that Morrell's damages ver-
dict was the product of guesswork and speculation. They
assert that Morrell’s damages expert did not provide
sufficient guidance to the jury because he testified as to
alternative methods of assessing lost profits without pro-
viding a basis to distinguish among them. We also be-
lieve that this argument lacks merit.

Evidence of damages is sufficient as long as it is “not
wholly speculative,” Pillsbury Co. v. IMlinois Cent. Gulf
R.R., 687 F.2d 241, 246 (8th Cir.1982), and permits the
jury to “approximate damages on the basis of just and
reasonable inferences.” Wagner Elec. Forp. v. Local
1104, Int“ Union of Elec. Workers, 496 F.2d 954, 957
(Sth Cir.1974). Moreover, we may not reverse the dis-
trict gourt’s admission of expert testimony absent “a
clear,and prejudicial abuse of discretion.” Delta Rice
um N. General Foods Corp., 763 F.2d 1001, 1003 (8th
Cir.1985) (quoting SCNO Barge Lines v. Anderson Clay-
ton & Co., 745 2d 1188, 1192 (Sth Cir.1984)).

Lost profits are properly recoverable in actions in
which unions are found to have violated their no-strike
clause. See, e.g., California Trucking Ass’n v. Brother-
hood of Teamsters, 679 F.2d 1275, 1289-90 (9th Cir.
1981), cert. denied, 459 U.S. 970, 103 S.Ct. 299, 74 L.Ed.
2d 281 (1982); lowa Beef Processors, 597 F.2d at 1146.

25a

This court will not review “the merits of various meth-
ods of calculation, so long as the method actually em-
ployed by the district court is designed to yield a reason-
able approximation of damages.” Frito-Lay v. Local
Union No. 137, Int'l Bhd. of Teamsters, 623 F.2d 1354,
1364 (9th Cir.), cert. denied, 449 U.S. 1013, 101 S.Ct.
571, 66 L.Ed.2d 472 (1980). -

Essentially, the expert’s approach involved projecting
the plant’s sales and profits based upon historical data,
determining the extent to which external factors had an
impact on profits, adding strike-related losses such as de-
creased profits at the distribution centers, and deducting
expenses which Morrell saved as a result of the strike.
We believe that this method allowed the jury to ‘“‘approxi-
mate damages on the basis of just and reasonable infer-
ences.” Wagner Elec., 496 F.2d at 957. It was not error
to permit the expert to discuss eight models of damage
calculations with a range of estimates from $20 million
to $31 million. The expert provided sufficient guidance
by explaining the different assumptions upon which each
model was premised.

We also note that the Unions extensively cross-examined
Morrell’s expert and offered their own expert testimony
on the damages issues. We are compelled to conclude
that Morrell’s damages evidence was properly before the
jury and provided it with the guidance necessary to de-
termine damages. See lowa Beef Processors, 597 F.2d at
1146.

KII.

Finally, the Unions argue that the district court erred
in vacating the arbitration award. As we have said, the
parties sought arbitration on the issue of whether the
strikers were entitled to replace the workers hired during
the strike because they were protected by the seniority
provisions of their collective barga‘ning agreement. The
arbitrator issued an award after the liability phase of
the bifurcated trial, but before the damages phase had

26a

concluded. The award sustained the Union’s grievances,
ordered the reinstatement of the strikers, and held that
the sympathy strikers did not violate the no-strike clause
of the collective bargaining agreement.

Despite the earlier jury verdict expressly holding that
the no-strike clause barred sympathy strikes, the arbi-
trator believed that he needed to independently interpret
the clause because the reinstatement issue was funda-
mentally linked to the breach of contract issue. The arbi-
trator applied the doctrine of coterminous interpretation
to hold that the no-strike clause barred only strikes over
arbitrable matters, and therefore, did not prohibit sym-
pathy strikes. Morrell then asked the district court to
set aside the arbitration award, and the court granted
the request. It held that the arbitrator had exceeded the
scope of his authority and, alternatively, that the doctrine
of res judicata bound the arbitrator, Since this issue is a
question of law, we review de novo the district court's
decision to vacate the award. Nordin v. Nutri, System,
S97 F. 2d 339, 344 (8th Cir, 1990). After carefully ex-
amining the record, we are satisfied that the district
court did not err in this regard,

A.

“We begin by recognizing that where parties to a
collective bargaining agreement have provided that an
arbitrator's award shall be final and binding, the award
is generally non-reviewable by a court.” Trailways Lines
„„ Trailways, Inc. Joint Council, 807 F.2d 1416, 1420
‘Sth Cir.1986). “As long as the arbitrator’s award
‘draws its essence from the collective bargaining agree-
ment,’ and is not merely ‘his own brand of industrial
justice,’ the award is legitimate.” United Paperworkers
Int Union u. Misco, 484 US. 29, 36, 108 S.Ct. 364, 370,
98 L.Ed.2d 286 (1987) (quoting United Steelworkers „.
Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80
S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (19601). This defer-

27a

ence means that “as long as the arbitrator is even argu-
ably construing or applying the contract and acting
within the scope of his authority, that a court is con-
vinced he committed serious error does not suffice to
overturn his decision.” Misco, 484 U.S. at 38, 108 S.Ct.
at 371.

While our review of an arbitration award is narrowly
circumscribed, this judicial deference “does not grant
carte blanche approval to any decision an arbitrator
might make.” Piggly Wiggly Operators’ Whse, v. Ti
Wiggly Operators’ Whse. Indep. Truck Drivers Union,
Local No, 1, 611 F.2d 580, 583 (5th Cir.1980). Rather,
where “a court concludes that the arbitrator did not
stay within the bounds of his authority, this principle
of deference inevitably gives away ... to the greater
principle that an award not drawing its essence from
the agreement is not entitled to judicial enforcement.”
Centralab , Local No, 816, Int'l Uniog of Elec. Workers,
827 F.2d 1210, 1217 (Sth Cir.1987). Such an award must
be vacated because “‘arbitration is a matter of contract
and a party cannot be required to submit to arbitration
any dispute which he has not agreed so to submit.” United
Steelworkers u. Warrior & Gulf Navigation Co., 363 U.S.
574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960) ;
see also Franklin Elec, Co. „ International Union, UAW,
886 F.2d 188, 190-91 (Sth Cir.1989). While the issue of
whether the arbitrator exceeded his authority is review-
able, we must broadly construe the collective bargaining
agreement and resolve all doubts in favor of the arbi-
trator’s authority. Lackawanna Leather Co, „. United
Food & Commercial Workers Int'l Union, 706 F.2d 228,
230-31 (8th Cir.1983) ‘en bane); see also Pack Concrete
„. Cunningham, 866 F.2d 283. 285 (9th Cir. 1989 ‘hold-
ing that “an arbitrator’s interpretation of the scope of
the issue submitted to him is entitled to the same defer-
ence accorded his interpretation of the collective bargain-
ing agreement”).

28a

The district court thoroughly discussed this issue and
then concluded that the arbitrator was not authorized to
decide whether sympathy strikes were permitted by the
collective bargaining agreement. This led the court to
characterize the arbitrator's decision as “arbitration by
ambush.” It pointed out that it would have been irra-
tional for Morrell to consent to arbitrate the meaning
of the no-strike clause after obtaining a jury verdict in
its favor on this issue: the court found this contention
particularly ineredible in light of the fact that neither
party had submitted evidence to the arbitrator on the
issue. The court also noted that the arbitrator’s own
characterization of the issue did not suggest that the
issue of the legality of the strikes was submitted for
arbitration. After reviewing the record, the arbitration
clause, and the issue submitted for arbitration, we are
similarly persuaded that the arbitrator failed to stay
“within the areas marked out for his consideration.”
United Steelworkers u. Enterprise Wheel & Car Corp.,
zen US. 593, 598, 80 S.Ct. 1358, 1361, 4 L. Ed.2d 1424
(1960).

After the jury verdict on the liability issue, the par-
ties held a preliminary arbitration hearing. There was
evidence that the parties indicated at that time that they
did not want the arbitrator to address the issue of the
legality of sympathy strikes. Each party insisted that
it would prevail in arbitration of the recall issue re-
gardless of the outcome of the appeal of the liability
verdict, the appeal currently before us. The parties dis-
cussed providing the arbitrator with their briefing of the
sympathy strike issue: the evidence suggests, however,
that the parties intended such information to be used only
ws background material for the recall issue. Indeed,
When the parties stated the issues in their opening briefs
for the arbitrater, neither party referred to the issue
of the legality of the strikes. As a result, the arbitrator
framed the issue before him in the terms agreed upon
by the parties: “Do the seniority and discrimination pro-

29a

visions of the parties’ collective bargaining agreement
apply to the recall of those employees who were on a
sympatny strike from May 1 to November 4, 1987?”

This characterization of the issue contains no sugges-
tion that the issue previously decided by the jury, the
meaning of the no-strike clause, was submitted for arbi-
tration. Moreover, neither party offered any evidence
on the issue, although both parties had presented exten-
sive evidence on bargaining history and relevant con-
duct to aid the jury in interpreting the no-strike clause.
As the district court noted, this lack of evidence suggests
that the parties believed that the issue would not be
arbitrated."'

The Unions emphasize that Morrell relied upon a
breach of contract defense in arbitrating the recall issue
and point out that Morrell sought to frame the issue in
the following terms: “Given a strike in violation of the
agreement,” was the company required to reinstate the
strikers? We are not persuaded that this means that
Morrell intended to arbitrate the meaning of the no-
strike clause. Rather, it indicates that Morrell assumed
that the strike was in breach of their agreement and
thus provided a defense to the grievances. That assump-
tion was supported by the jury verdict in the company’s
favor.

The Unions argue that the district court erred in hold-
ing that Morrell's consent was required in order for the
arbitrator to reach the issue of the legality of the

1 This case is distinguishable from Lackawana Leather, 706 F.2d
228, where this court held that the arbitrator had not exceeded the
scope of his authority in deciding an issue on which the parties had
not presented evidence. Id. at 231-32. The fact that the parties had
not offered evidence on the issue has more significance in this case
than in Lackawanna. Here, the prior jury determination of the
issue provides stronger support for the contention that the parties
did not intend to arbitrate the issue and therefore saw no need to
submit evidence on it.

30a

strikes. They urge that since Morrell, in the collective
bargaining agreement, agreed to submit “any dispute
Which may arise between the Company and the Union”
to “final and bind arbitration,” the arbitrator was au-
thorized to resolve the issue of the legality of the strikes.
The Unions seem to contend that the broad arbitration
clause, which Morrell conceded made the legality of the
strikes arbitrable, somehow prohibited Morrell from lim-
iting the issues which the arbitrator may decide.

We reject the argument that the scope of the arbitra-
tor's authority is limited only by the arbitration clause.
It is fundamental that arbitrators derive their authority
to resolve disputes only because the parties have agreed
in advance to submit such grievances to arbitration.
Gateway Coal Co, „. UMW, 414 US. at 374, 94 S.Ct. at
635. The arbitration provision “constitutes merely a
promise to arbitrate.” Pigqgly Wiggly Operators’ Whzse.,
611 F.2d at 583. “Before arbitration can actually pro-
ceed, it is necessary for the parties to supplement the
agreement to arbitrate by defining the issue to be sub-
mitted to the arbitrator and by explicitly giving him au-
thority to act.“ Jd. “[Ojnce the parties have gone be-
yond their promise to arbitrate and have actually sub-
mitted an issue to an arbiter, we must look both to their
contract and to the submission of the issue to the arbi-
trator to determine his authority.” Jd. at 584 emphasis
added). The initial contract to arbitrate may be
modified by the submission agreement or grievance.” Ji.
There are many instances where courts have recognized
that the scope of the arbitrator's authority depends, in
part, upon how the parties have framed the issue to be
arbitrated, See, C4. Synerqy Gas Co. „. Sasso, 853 F.2d
59, 63-64 (2d Cir. 19887 cert denied, 488 U.S. 994, 109
S. Ct. 559, 102 L.Ed.2d 585 (1988) ; Sunshine Mining Co.
„. United Steelworkers, 823 F.2d 1289, 1294 (Mth Cir,
1987); International Chemical Workers Union, Local
No. 566 u. Mobay Chemical Corp., 755 F.2d 1107, 1110

Sla

(4th Cir. 1985; Courier-Citizen ( . „. Boston Electro-
typers Union No. 11, 702 F.2d 273, 281 (Ist Cir. 1983,
Wren u. Sletten Constr. ., 654 F.2d 529, 533 (9th Cir.
1981% see also . Gorman, Basie Tert on Labor Law
Unionization and Collective Rarqaining e (1976). We
believe that this case also illustrates such an instance.

We also note that “the agreement to arbitrate partic-
ular issues need not be express. It may be implied or
established by the conduct of the parties.” Mohay, 755
F.2d at 1110. The conduct of Morrell, described pre-
viously, which indicated that it did not intend to arbi-
trate the issue of the legality of the strikes, provides
further support for our decision. In sum, we are satis-
fied that the arbitrator was not “even arguably .. . act-
ing within the scope of his authority,” Miseo, 484 U.S. at
38, 108 S.Ct. at 371. in interpreting the no-strike clause,
and therefore, the district court did not err in vacating
the award.

B.

Alternatively, the district court held that the arbitra-
tion award must be vacated because, under the doctrine
of res judicata,'' the arbitrator was bound by the jury's
finding that the collective bargaining agreement pro-
hibited sympathy strikes. We recognize, as did the dis-
trict court, that we need not reach this issue unless we
assume that it was properly before the administrator, a

™ Technically, the court's decision was based upen the doctrine
of collateral extoppel, also referred te as kane preclusion. The
Supreme Court has explained that:

Under the doctrine of res judicata, a judyment on the merits
in « prior suit bars a second suit invelving the “ame parties or
their privies based on the «ime cause of action. Under the doe-
trine of collateral estoppel, . © the second action is upen a
different cause of action and the jodement in the prior auit
precludes relitigation of issues actually litigated and necessary
to the outcome of the first action,

Parklane Hosiery Co, e. Shore, (39 US. 422. 326 u. J. 99 S.Ct. 645,
619 n. 5, 58 L.Ed.2d 552 1979

32a

proposition which we have just rejected. We believe,
however, that this alternative basis provides strong sup-
port for the district court’s ruling and that it is appro-
priate that we consider it. The Unions challenge this
reasoning by arguing that: (1) arbitrators are gener-
ally not bound by res judicata principles; and (2) even
if res judicata principles were applicable, the require-
ments for the doctrine are not met here because the arbi-
tration award was issued before the district court en-
tered a final judgment in the case.“ We reject these
arguments and affirm the district court’s vacation of the
arbitration award on this ground also.

Assuming that the requirements of the test for issue
preclusion are satisfied.“ we believe that the arbitrator
was barred from reconsidering the issue decided in the
prior judicial proceeding. There is scant authority deter-
mining the effect of a prior judicial decision on an arbi-
tration proceeding because the issue arises only in rare
situations; several courts, however, have held that issue
and claim preclusion may bar arbitrators. See, ¢.g., Mil-
ler Brewing Co. „. Fort Worth Distrib. Co., 781 F.2d
494, 501 (5th Cir. 1986); Telephone Workers Union of
New Jersey, Local 827 v. New Jersey Bell Tel. Co., 584
F.2d 31, 33-34 (3d Cir.1978); Burmah Oil Tankers v.
Trisun Tankers, 687 F.Supp. 897, 899 (S.D.N.Y.1988) ;

The Unions also argue that Morrell waived its res judicata de-
fense by failing to assert it during arbitration. We are satisfied
that Morrell sufficiently preserved this defense, particularly in light
of the evidence indicating that the parties did not intend or expect
the arbitrator to reconsider the meaning of the no-strike clause.

Issue preclusion bars relitigation of an issue if the same issue
was involved in both actions; the issue was actually litigated in the
first action after a full and fair opportunity for litigation; the issue
was actually decided in the first action on the merits; the disposition
was sufficiently final; and resolution of the issue was necessary in
the first action. See 18 C. Wright, A. Miller & E. Cooper, Federal
Practice and Procedure § 4416, at 137-88 (1981); see also Parklane
Hosiery, 439 U.S. at 326 n. 5, 99 S.Ct. at 649 n. 5. It is only the
finality requirement which is challenged in this appeal.

33a

Hudson-Berlind Corp. v. Local 807, Affiliated with the
Int’l Bhd. of Teamsters, 597 F.Supp. 1282, 1285-86
(E.D.N.Y.1984). Cases which have refused to apply is-
sue preclusion to arbitrators have done so because the
requirements for issue preclusion were not met. See, ¢.9.,
W.R. Grace & Co. v. Local Union No. 759, Int'l Union of
the United Rubber Workers, 461 U.S. 757, 765, 103 S.Ct.
2177, 2183, 76 L.Ed.2d 298 (1983) (refusing to apply
res judicata where arbitrator’s earlier award had ex-
ceeded his authority); McGraw Edison, Wagner Div. v.
Local 1104, Int’! Union of Elec. Workers, 767 F.2d 485,
489 (Sth Cir.1985) (holding that an arbitrator was not
bound by an earlier award involving a different contract
and different union).

We recognize that the arbitrator had the authority to
determine in the first instance whether to give the prior
judicial determination preelusive effect. Trailways
Lines, 807 F.2d at 1425. We must review the arbitra-
tor’s determination of the issue with deference, but we
may vacate the award if his decision on the preclusion
issue reflects his “own brand of industrial justice.”
Misco, 484 U.S. at 36, 108 S.Ct. at 371. In Trailways,
for example, we held that an arbitrator was bound by a
prior award involving “the same company, the same
union, essentially the same issue, and interpretation of
the same contract.” 807 F.2d at 1425. Trailways in-
volved the res judicata effect of a prior arbitration
award upon a later arbitration. The situation before us
presents a stronger case because we are examining the
preclusive effect of a judicial proceeding in the same dis-
pute. We cannot ignore the strong factual identity be-
tween the issue resolved by the jury and the issue ad-
dressed by the arbitrator. The liability trial and the
arbitration proceeding both arose out of the same factual
circumstances and involve the same parties and contract.
If this entire series of disputes were addressed in one
tribunal, there can be no doubt that the jury verdict
would preclude further consideration of the legality of

34a

the sympathy strikes. For the arbitrator to reject the
jury verdict was to disregard the law, see Stroh Con-
tainer Co. v. Delphi Indus. 783 F.2d 743, 750 (8th
Cir.), cert. denied, 476 U.S. 1141, 106 S.Ct. 2249, 90
L.Ed.2d 695 (1986), and to substitute “his own brand of
industrial justice,” Enterprise Wheel & Car Corp., 363
U.S. at 597, 80 S.Ct. at. 1361, for the deliberations and
verdict of the jury. Furthermore, the reasons given by
the arbitrator for disregarding the verdict do not with-
stand scrutiny. He stated, in the arbitration award, that
he was not bound by the jury verdict because he did not
have the benefit of a trial transcript, the jury instruc-
tions, or the evidence justifying submitting the issue to
the jury. Neither the lack of a trial record, nor his role
as an arbitrator, authorized him to sit as an appellate
court and consider anew the rulings of the district court
and the verdict of the jury. Accordingly, we are unper-
suaded by the Unions’ arguments that the arbitrator was
not bound by principles of res judicata.

Furthermore, we reject the Unions’ argument that the
verdict cannot have preclusive effect because the jury's
liability verdict was not immediately appealable since the
damages phase of the trial had not concluded. See 28
U.S.C. 81291 (1988). While this circuit has not
squarely confronted this issue,“ we believe that finality

* The Unions urge that this court resolved this lese in Usited
States v. Arkanses, 791 F.2d 1573 (8th Cir, 1986), by stating that
At be dectrine of ree judicata therefore ix simply inapplicable, for
there has been no cartier final judgment from which the State could
appeal.” Id. at 1576. The court there was addressing the narrow
issue of whether a diemisaal under Rule 34/6) of the Federal Rules
of Civil Procedure should be given preelusive effect. The rule ex-
pressly provides that such dismissals are “subject to revision at any
time before the entry of judgment” and therefore are inherently
tentative. Thus, the court was not faced with the ewe here
whether a jury verdict after a full trial on the merits precluded
reconsideration of the lese, We are satixfied that the language
which the Unions rely upon in United States ©. Arten should

for purpose of appeal under section 129! ix not neces
sarily the finality that is required for issue preclusion
purposes.

The availability of judicial review is merely one factor

ment g (1982). As Judge Friendly has explained,
“*(flinality’ in the context fof issue preclusion! may
mean little more than that the litigation of a particular

F.2d 80, 89 (2d Cir, 1961), cert. demied, 268 US. 986,
82 S.Ct. 601. 7 I. Fa l S24 (1962). “| Wile see no rea-

Brewing Co, v. Jox, Schlitz Co, 605 F.2d 960 (Th Cir
1979). cert. dewied, 444 US. 1102, 100 S.Ct. 1067, 42
Las TRT (1980'. the Seventh Cireuit held that an

to the plaintiffs success om the merits.” d. at 995; se
also O'Reilly v. Malen, TAT F. n S20, S23 (Let Cir 1984)
(per curiam) ; Aiello v. City of Wilmington, 470 F.Supp.

net be read out of the comtest of the be al factual citeumetane we
of that case.

Furthermore, we are enperemacded by the Upiome aryument that
MeCivew Edicom, THT PQd OO, eee foe the eee peopecitine
that arbitraters ore mat beamed by ree eee peineipies Tie
court foumed the deetrime inapplicable there ente "Re ure
award invelved a diferent comtruct and different anmiem 24 at bee

CC

6

414, 418-19 .,. 1979%/ aff'd, G23 F.2d 85 (3d Cir.
Iro, Aclna Cas, & Sure ty Co, „. n & C., 440
F.Supp. 3 J. 299-403 D. New. 1977 /, Authoritative com-
mentaries also provide support for our conclusion. Se
Restatement (Second) of Judgments £13 comment gw
illustration 3 (providing an illustration where a liability
finding in a bifurcated trial would have a preclusive ef-
fect before the damages phase of the trial was com-
pleted); 18 C. Wright, A. Miller & E. Cooper, xupra
+ 4434, at 321 ‘stating that “|rlecent decisions have re-
laxed traditional views of the finality requirement by
applying issue preclusion to matters resolved by pre-
liminary rulings or to determinations of liability that
have not yet been completed by an award of damages or
other relief").

In sum, we are satisfied that the jury's verdict that
the no-strike clause prohibited sympathy strikes was suf-
ficiently final to bind the arbitrator here. Both parties
presented abundant evidence on the issue at trial, and
both had strong incentives to litigate the issue fully.
Furthermore, the jury's verdict addressed the exact is-
sue Which the arbitrator chose to reconsider, Accordingly,
we see “no really good reason for permitting it to be
litigated again.” Lummus, 297 F.2d at 89. Thus, the
arbitrator's decision to ignore this precedent fails to
draw its essence from the contract and was properly
vacated,

IV.

In conclusion, we have carefully considered all of the
Unions’ arguments, and we are convinced that they lack
merit. Accordingly, we affirm the district court's judg-
ment in favor of Morrell and its order vacating the arbi-
tration award,

McMILLAN, Circuit Judge, dissenting.

I respectfully dissent. In my view, the district court
erred as a matter of law in finding that the no-strike

of review by thix court): Swenson v. Baker Industrics,
lar O15 F.2d 479, 483 (Sth Cir. 1980+ the proper con-
struction of a written contract ix a question of law to be
determined by the court +.

The general rules just noted are subject to the one
limitation that has been pressed in the present case, Le.
where a contract is deemed ambiguous, the court may
weigh extrinsic evidence to aide in its construction.
UFCW Local 150, T56 F.2d at 69. The ambiguity excep-
tion, however, is tightly bound. Extrinsic evidence le wot
admissible for the purpose of showing that the parties
intended to make an agreement which is inconsistent
with the unambiguous words of their written contract.
St. Louis Union Trust Co. « United States, 617 F.2d
1293, 1300 (Sth Cir.1980). And a mere difference of
opinion ax to the proper interpretation does not render
the contract ambiguous as a matter of law. Pres Me-
chinery Corp. T27 F.2d at 784. Rather. a contract is
ambiguous only if the court determines that its words
are reasonably sueceptible to more than one construction
by a person acquainted with all operative usages an-
knowing all of the circumstances prior to and contempo-
raneous with the making of the contract. Finally.
whether a contract ix ambiguous is a question of law to
he resolved by the trial court in the first instance and
which is subject to review by the appellate court. Motes
Carriere Council, Ine. „. Locol 600, 486 F. 20 No „
(Sth Cr. ls The trial court's finding of ambiguity ix
nat subject to the clearly erroneous standard of review.
but rather ix reviewed de nove by the appellate court.
Western Contracting Corp. v. Dow Chemical Co. 664
F.2d 1097, 1100 (Sth Cir.1981). Stated in pore con-
tract law terms, then. the threshold question in the pres
ent case is whether the district court correctly concluded
that the no-strike clause n the parties’ collective har-
gaining agreement ix ambiguous and therefore subject
to jury interpretation on the basis of extrinsic evidence.

However, to frame the ixeue solely in these terms ie ·
nores the labor law context in which thl- case arises and

39a

the substantive labor law principles that are therefore
implicated. Morrell brought this suit under 301 of the
Labor-Management Relations Act of 1947 (LMRA), 29
U.S.C. £185 (1988). The Supreme Court's decision in
Textile Workers Union of America v. Lincoln Mills of
Alabama, 353 U.S. 448, 456, 77 S.Ct. 912, 917, 1 L.Ed.2d
Na (1957) (Lincoln Mills), teaches us that in cases
such as this the substantive law to apply is federal law,
which the courts must fashion from the policy of our
national labor laws. Lincoln ils, moreover, provides
concrete guidance as to how such law is to be fashioned:

The Labor-Management Relations Act expressly fu)
nishes some substantive law. It points out what the
parties may or may not do in certain situations.
Other problems will lie in the penumbra of express
statutory mandates. Some will lack express statu-
tery sanctions but will be solved by looking at the
policy of the legislation and fashioning a remedy
that will effectuate that policy.

353 U.S. at 457, 77 S.Ct. at 918.

The LMRA expressly furnishes some substantive law
that is directly relevant to the issues presented in this
case. Specifically, §7 of that Act, 29 U.S.C. £157
(1988). generally protects employees who engage in
sympathy strikes in support of a lawful, primary strike
by another union. See AMCAR Division, ACF Indus-
tries, Inc, © NLRB, 641 F.2d 561, 566 (8th Cir.1981)
(AMCAR Division). That protection, to be sure, is not
absolute; under £9 of the LMRA, 29 U.S.C. 159
(1988). an exelusive bargaining representative can.
through collective bargaining, waive such a right on be-
half of the employees represented by the union. See id.
Nevertheless, the protection of the right to strike has
real substance; the Supreme Court has made it clear that
it is not proper to

infer from a general contractual provision that the
parties intended to waive a [LMRA] statutorily

40a

protected right unless the undertaking is ‘explicitly
stated.” More succinctly, the waiver must be clear
and unmistakable.

Metropolitan Edison Co. +. NLRB, 460 U.S, 694, 708,
103 S.Ct. 1467. 1477, 75 I. Ed. 2d 387 (1983). And, as
this court once stated in a decision which correctly an-
ticipated the holding in Metropolitan Edison,

in the collective bargaining agreement, employees
may waive their right to engage in sympathy strikes,
Where there is not an express waiver of this right,
the evidence of waiver must be clear and unmis-
takable.

AMCAR Division, GAL F.2d at 566 ‘citations omitted).
Thus, general rules governing contract interpretation
and specific statutory rules in the LMRA governing the
right to strike tend to intersect.

In a commercial contract case, a showing by the plain-
tiff that « certain contractual provision may reasonably
be read as prohibiting the defendant from acting as he
did would be sufficient to establish that the contract is
ambiguous, Under Metropolitan Edison, however, that
there exists two plausible interpretations of a no-strike
clause in a collective bargaining agreement, one permit-
ting sympathy strikes and one prohibiting such strikes,
does not establish a legally relevant ambiguity. As a
matter of substantive labor law, a collective bargaining
agreement which can be plausibly read to prohibit sym-
pathy strikes and also plausibly read to permit such strike
does not constitute a waiver of the statutory right to
engage in sympathy strikes. Only an agreement which
clearly and unmistakably waives that statutory right con-
stitutes a legally operative waiver and only such an
agreement can give rise to a breach of contract claim
based on a sympathy strike. Thus, in our case, the thres-
hold question for our review is whether the no-strike
clause can reasonably be read to waive in clear and un-

tla

mistakable terms the right to engage in sympathy strikes.
And that question, like any threshold question of contract
interpretation, is a determination for this court to make
de nove,

In determining whether a contract is ambiguous, and,
hence, whether the contract meaning is to be determined
by the fact-finder on the basis of extrinsic evidence, the
starting point is the language of the contrast. The words
chosen by the parties are to be given their plain and ordi-
nary meaning as understood by reasonable persons ex-
perienced in negotiating the kind of contract in question.
Leman Brow, Kehna Loeb fue. „, Clark Oil & Refining
Corp.,, T39 F.2d 1313, 1317 Mb Cir.1984) ‘citing Uni-
vereal Towing Co. ¢ United Barge Co., S79 F.2d 1098,
1101 (Sth Cir. 19781), cert, denied, 469 U.S, 1158, 105
S.Ct. 906, 83 L.Ed.2d 921 (1985+).

First we note that express no-strike pledges fall into
two general categories: (1) unconditional bans on any
interference with production during the life of the con-
tract; and (2) conditional bans which permit strikes
under certain circumstances. Hasic Patterns: Strikes and
Lockouts, 2 Collective Bargaining Negotiations and Con-
tracts (BNA) Na. 1142, at 77:1 (1987). Over 60° of
all no-strike clauses are of the unconditional type and
ban any, all or every strike during the life of the contract
without qualifications and without reference to the arbi-
tration provision of the contract. Id. The clause being
considered in this case ia not of that type, however, Re-
cause the language is so critical to our analysis, it is
worth repeating here. Article II. Clause 5 provides:

Provisions having been made by this agreement and
local agreements for the peaceful and orderly settle-
ment of any disputes which may arise between com-
pany and the union or local union or any employee
or employees, it is agree’ that during the terms of
this agreement there shall „ no strike, stoppage,
ava. Wr, or men on of wor on *he part of the

122

union or any local union or any union member or
lockout om the part of the company on dernen of
such disputes wutil after the carwest efforts shall be
male te settle all such matters im the manner pro-
vided im the respective amendments.

Ry its own terms, this wist rike provision does not
obligate workers to refrain from % work stoppages
during the life of the contract; rather, it contains a
promise net to strike om account of a specified class of
disputes, disputes for which provisions have been made in
the collective bargaining agreement for peaceful
and orderly settlement.” And even as to those particular
kinds of disputes, the workers are free to strike after
an earnest effort has been made to settle in the manner
provided in the agreement. Thus, the no-strike provision
ix expressly linked to and limited by the obligation to
settle disputes according to the grievance arbitration
clause in the collective bargaining agreement. These
words, if defined according to their plain and ordinary
meaning as that meaning ix understood by experienced,
reasonable, labor bergaining-agreement negotiators, im-
ply cannot be read to outlaw sympathy strikes because 2
sympathy strike, by definition, ix not a strike over a dis-
pute that is subject to peaceful and orderly settlement
under the provisions of the bargaining agreement be-
tween the sympathy strikers and their employer. Ruther.
the dispute underlying the sympathy strike is always be-
tween the employer and a different group of workers and
ordinarily arises out of these workers’ efforts to secure a
new collective bargaining agreement.

Indeed, it is precisely ease a sympathy strike is
undertaken in suppert of a sister union's effort to nego-
tiate with its employer and because neither the causes
ner the issues underiving a sympathy strike are subject
to the settlement procedures provided by the contract
hetween the emplover and the union conducting the sym-
pathy strike that the Supreme Court has held that
sympathy strikes, unlike strikes over arbitrable disputes,

4a

are not subject to federal court injunctions. Buffalo
Forge Co. „. United Steelworkers of America, 428 U.S.
397, 407-08, 96 S.Ct. 3141. 3147-48, 19 L.Ed.2d 1022
(1976); xee Pures Corp. v. Automotive Employeca Union,
Local G18, 705 F.2d 274, 276-77 «sth Cir.1983). For
precisely the sume reason, the words of this limited no-
strike clause expressly linked to the grievance arbitra-
tion procedure cannot be read to even plausibly, let alone
clearly and unmistakably, proscribe sympathy strikes, A
recent decision of the NLRB lends further support. In
Bristol Convalescent Home, luc., the NLRB held that a
no-strike clause which makes specific reference to arbi-
trability

(indicates that the no-strike provision is func-
tionally related to arbitration and intended to be in
effect only when disputes could be resolved by the
arbitration process... . This apparent relationship
between the express no-strike provision and arbi-
tration warrants the inference that the parties in-
tended a narrower limitation on strikes than in cases
involving the express no-strike provision that is
functionally independent from the arbitration process,

ria Convalescent Home, lne., 293 NLRB No. 73, slip
op. ut (April 11, 1980).

Here, the no-strike clause does not contain a promise
that there shall be no strike whatsoever; rather the
clause states only that there shall be no strike on account
of a dispute arising between the company and the union
until after an earnest effort has been made to settle the
disputes in the manner provided in the agreement, Clearly
this promise applies only to strikes over arbitrable dis-
putes between the company and the union. This clause
cannot be fairly read to apply to situations in which
there is no underlying dispute between the company
and the union that is subject to being settled in the
manner provided in the collective bargaining agreement.
Only by distortion of the words in the contract is Morrell

dia

able to even argue, let alone persuade a court, that the
clause can plausibly be read to constitute a clear and
unmistakable waiver of the right to engage in a syMpa-
thy strike.

lowa Beef, relied upon by the majority, is distinct
from the case at hand because it involved a general,
unconditional no-strike clause, rather than a limited no-
strike clause of the type contained in the instant contract.
597 F.2d at 1143-44. In ou Beef, the union argued
that because of the clear and unmistakable waiver rule
and because the union's promise not to strike was given
in return for the employer's promise to arbitrate con-
tractual disputes arising under the agreement, even the
unconditional no-strike clause must be read to be confined
sub silentio to arbitrable disputes. Id. at 1145, Although
this theory has been rejected by some courts, including

tration clause.” Pacemaker Yacht Co. „. NLRB, 663 F.2d
455, 458 (3d Cir. 1981 (Pacemaker\; see United States
Steel Corp. v. NLRB, 711 F.2d 772. 777 7th Cir.1983)
(United States Steh, In Pacemaker, the express no-
strike clause was in no way limited by its terms to arbi-
trate disputes. To the contrary, the agreement included
one no-strike provision which was clearly intended to bar
strikes over arbitrable disputes and another which cov-
ered strikes over all other disputes, Pacemaker, 663 F.2d
at 456-59. Likewise, in United States Steel, the agree-
ment contained a general, unconditional no-strike clause.
711 F.2d at 778. Rejecting an argument that the general
no-strike clause should be limited to strikes over arbitra-
ble disputes, the court nevertheless recognized, “olf
course in cases where an arbitration clause and an ex-
press no-strike clause are closely interwoven, it may be
reasonable to infer that the parties intended the two

15

provisions to have the same scope.” Id. at 777. This is
such a case. Not only is the no-strike clause in this case
“closely interwoven” with the arbitration clause, it also
expressly refers only to strikes over arbitrable disputes
between the company and the union. As such it cannot
reasonably be read as waiving in clear and unmistakable
terms the right to engage in sympathy strikes, which are
by definition, nonarbitrable disputes.

Finally, the court's reliance upon the “struck work”
clause in the Sioux Falls collective bargaining agreement
to negate the plain meaning of the no-strike clause at
issue is misplaced. These two clauses deal with quali-
tatively different labor relation issues and do so in a
way which create no conflict whatsoever, Under the
LMRA, workers who elect to honor a lawful picket line
and do not report to work and do not draw pay are exer-
cising a statutorily protected right. See 29 U.S.C. § 157.
Conversely, employees who elect to report to work and
to draw their pay do not have any statutory right to
refuse to perform struck work, namely, work undertaken
for another employer whose workers are on strike. Thus,
employers have the right to require their employees to
perform such work. See NLRB . Electrical Workers,
346 U.S. 464, 476 n. 12, 74 S.Ct. 172, 178 n. 12. 98 L.Ed.
195 (1953); NLRE . Montqomery Ward & C., Ine. 157
F.2d 486, 496-97 (Sth Cir. 196%; Vie Koenig Chevrolet,
263 NLRB 646, 649-50 (1982).

For the reasons given herein, | would reverse the deci-
sion entered below and direct that judgment be entered
for the unions on Morrell's claim for damages under the
no-strike provision of the collective bargaining agree-
ment. Because that provision does not, as a matter of
law, bar sympathy strikes, | would also reverse the dis-
trict court's decision vacating the arbitration award.

46a
APPENDIX B

UNITED STATES DISTRICT COURT
D SOUTH DAKOTA, W.D.

Civ. Nos, 88-5143, 89-5024

JouNn Morne. & Co., a corporation,

‘ Plaintiff,

LocaL Union 304A or THE UN Foop AN CoMMER-
CIAL Workers, AFL-CIO N CLC; Unrtep Foob AN
COMMERCIAL WorKERS INTERNATIONAL Union, AFL-
CIO AN CLC,

Defendants,

-

UNirep Foop AN COMMERCIAL WORKERS INTERNATIONAL
Union, AFL-CIO & CLC; AN Unirep Foop AN Com-
MERCIAL Workers Loca 304A,

7 Plaintifix,

JoHN Morrecr & Co., a corporation,

Detendaut,

— — =

March 15, 1989

MEMORANDUM OPINION AND ORDER
VACATING ARBITRATOR'S AWARD

BATTEY, District Judge.
NATURE AND PROCEDURAL HISTORY

This matter comes before the Court on John Morrell
& Co.'s (Morrell’s' application to set aside the November
5, 188, award of arbitrator William E. Rent fro. Local
Union 204A of the United Food and Commercial Work-
ers, AFL-CIO and the CLC and United Food and Com-

47a

mercial Workers International Union, AFL-CIO and CLC
Union apply for enforcement of the award. The arbi-
trator found that: “The 1987 sympathy strike was per-
mitted by the clear, unambiguous and express provisions
of this collective bargaining agreement.” On March 10,
1988, more than seven months prior to the arbitrator's
award, a jury empaneled in the Western Division of the
District of South Dakota returned a verdict that the
strikes at issue violated the collective bargaining agree-
ment between the parties and were therefore illegal. The
arbitrator, although possessing knowledge of the district
court action, failed to follow the issues decided in the
liability phase of the trial.“ A separate jury empaneled
in the Western Division of the District of South Dakota
returned a damage verdict on November 10, 1988, in
favor of Morrell in the amount of $24,600,000,

On November 8, 1988, Morrell filed an application and
motion to set aside or stay the November 5, 1988, award
of the arbitrator. The following day, on November 9,

-_— >

The Court, to prevent confusion concerning the verdict, sul,
mitted the following two-part special interrogtaory to the jury:

SPECIAL INTERROGATORY «1
We find that the strike of May 1, 1987, was a (Select one
alternative )
- Sympthy «trike
Primary or economic strike

SPECIAL INTERROGATORY #2
Ix the defendant Local Union S01A prohibited by the terme of

the collective baryaining agreement from enyaging in sympathy
strikes?

The jury found that the May 1987 strike was a «ympathy «trike
‘as did the Eighth Circuit in John Morrell & Co. „„ Local Union
MOLA, % F.2d 457 (8th Cir. 1986)) and further anewered Special
Interrogtacry #2 in the affirmative finding that Union had bar
vained away (waived) ite right to engage in sympathy «trikes (an
issue not previously before the Eighth Circuit).

48a

198%, Union filed a complaint in United States District
Court for the Northern District of Illinois, Eastern Di-
vision, seeking enforcement of the ame award. The Illi-
nois court, on February 10, 1989, transferred the Union's
case to this Court pursuant to 28 U.S.C. § 1404(a). This
Court then, pursuant to Fed.R.Civ.P. 42 a, consolidated
the two cases by order dated March 6, 1989.

The Court has reviewed the extensive briefs in both
cases, Having considered the arguments of the parties,
the Court finds that the award of arbitrator William E.
Rentfro of November 5, 1988, determining that “|t|he
1987 sympathy strike was permitted by the clear, un-
ambiguous and express provisions of this collective bar-
gaining agreement,” must be vacated for the reasons set
forth below.

DISCUSSION

The issue before the Court is whether the parties
agreed to arbitrate the legality of the May 1 to Novem-
ber 4, 1987, sympathy strike. As the United States Su-
preme Court held in United Steelworkers of America v.
Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80
S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960), “[Tlhe judi-
cial inquiry under { 301 must be strictly confined to the
quéstion whether the reluctant party did agree to arbi-
trate the grievance or did agree to give the arbitrator
power to make the award he made.”

In AT & T Technologies, Inc. „. Communications
Workers of America, 475 US, 643, 106 S.Ct. 1415, 89
L.Ed.2d 648 (1986), the Supreme Court applied the prin-
ciples necessary to decide this issue as established in the
Steelworkers Trilogy: Steelworkera v. American Mig.
Co., 363 U.S. 564, 80 S.Ct. 1313. 4 L.Ed.2d 1403 (1960) ;
Steelworkera . Warrior & Gulf Navigation Co., 363
U.S. 574, 80 S.Ct. 17, 4 LEd2d 1409 (1960); and
Steelworkers v. Enterprise Wheel & Car Corp., 363 US.
592, 80 S.Ct. 1858, 4 L.Ed.2d 1424 (1960). The Court
concisely stated:

The first principle gleaned from the Trilogy is
that “arbitration is a matter of contract and a party
cannot be required to submit to arbitration any dis-
pute which he has not agreed so to submit.” Werrior
& Gulf, supra, 33 U.S. [574] at 582, 80 S.Ct.
(1347), at 1353 [4 L.Ed.2d 1409 (1960): Americas
Mig. Co., supra, 363 U.S. [564], at 570-571, 80 S.Ct.
(1343), at 1364-1365 [4 L.Ed2d M03 (1960)
(BRENNAN, J. concurring!. This axiom recognizes
the fact that arbitrators derive their authority to re-
solve disputes only because the parties have agreed
in advance to submit such grievances to arbitration.
Gateway Coal Co. r. Mine Workers, 414 US. 268,
374, 91 S.Ct. 629, 635, 38 L.Ed. 2d 583 (1974).

The second rule, which follows inexorably from
the first, is that the question of arbitrability—
whether a collective-bargaining agreement creates a
duty for the parties to arbitrate the particular griev-
ance—is undeniably an issue for judicial determina-
tion. Unless the parties clearly and unmistakably
provide otherwise, the question of whether the pore
ties agree to arbitvate is to be decided by the court,
wot the arbitrator.

(Citations omitted. (Emphasis added.) The Supreme
Court went on te note that: “The willingness of parties
to enter into agreements that provide for arbitration of
specified disputes would be ‘drastically reduced,” however,
if a labor arbitrator had the ‘power to determine hie own
jurisdiction. .. .” Cox, Reflections Upon Labor Arhbitre-
tion, 72 Harv.L. Rev. 1482. 1509 (1959)."

The Eighth Cireuft Court of Appeals in Ceutralah, Tne.
r. Local 816, Elec, et al. Workers, S27 F.2d 1210 «sth
Cir, 1987), applying the principles set forth in AT & T
held that where an arbitrator decided issues not property
before him the district court correctly vacated the award.
In vacating an arbitrator's award for exceeding the scope
of his authority, a district court does not ignore the

— .

50a

strong precedent requiring courts to give great deference
to the arbitrator's remedial powers. The Eighth Circuit
found:

Rather, whereas here, a court concludes that the
arbitrator did not stay within the bounds of his au-
thority, this principle of deference inevitably gives
way, as recognized by the Supreme Court in Enter-
prise Wheel, to the greater principle that an award
not drawing its essence from the agreement is not
entitled to judicial enforcement.

Id. at 1217.

In his November 5, 1988, award, arbitrator Rent fro
found it necessary to determine the legality of the sym-
pathy strike from May 1 to November 4, 1987, as a
threshold issue before addressing the seniority and dis-
crimination provisions of the collective bargaining agree-
ment. In so doing, the arbitrator considered the Eighth
Cireuit decision in John Morrell & Co. v. Local Union
304A, S04 F.2d 457 (Sth Cir. 1986) (Morrell and
the jury verdict rendered in the liability phase of John
Morrell & Co. „. Local Union JOLLA, 541 F.Supp. S03
D. S. D. 1986) (Morrell 11). The result arrived at by the
arbitrator was that the language of the collective bar-
gaining agreement was so clear that any evidence of
waiver by the Union of its right to sympathy strike
“pushes the language of the contract past the breaking
point.” The arbitrator's decision was reached without
the benefit of any parol evidence on the issue of waiver.
The arbitrator stated, “Further, the arbitrator has not
had the benefit of a transcript of the trial, the instruc-
tions of the trial court, or any record evidence which
would give credence to that court’s decision to submit
this issue to a jury.” Thus the arbitrator specifically
failed to abide by the final judgment of the district court
—ia decision which remains final until reversed by ap-
propriate appeal process,

kes before the arbitrator. In Amcor D

thes 8 wor et ö
. . a 9 2 6 1 * 3
AFC I ries, Ini NERB, 641 F.2d 561 (8th (
1 " | j ö f
81 the | th Circuit found that em ees ni
1 ie F ! 1
Live Sir! 9 eT ve in Gim Strike '
erie 4 ' ~~" 9 1 N Fre ni us g 1 l 7
— 91 trike waive} the « jit ‘ a
| ere * number i relevant f Kamm
8 8 n ' 6 : P ot + hg 1 9 mer 9 : 1
rit 1 1 en * 5 mi 9 ry ; We Oo Une
* 1 1 1 1 1 : ' ' : ' '
: . . N
“eS 7 e ry 7 90 : * * hes 1 .
: a
nel : of ‘ 1 * ‘ * 1 rs 7 6 7
ny i the contr '
ov ,
17 1 '
6 T
J

52a

either party submitted such evidence suggests that the
arbitrator was not to decide the issue. The jury em-
paneled in the liability phase (Morrell IT) on the other
hand, received abundant evidence of the parties’ under-
standing of the sympathy strike provisions in their col-
lective bargaining agreement. After hearing the evidence,
the Court instructed the jury in accordance with the law
established by the Eighth Circuit in Ameer. Jury in-
struction #12 stated in part:

However. the right to engage in a sympathy strike
ix a right which can be waived, that is, relinquished
or given up by entering into a collective bargaining
agreement which by its terms waives such right.
Whether the defendant Local 301A waived the right
to engage in sympathy strikes ix for you to decide.

In determining this issue you are entitled to ex-
amine the contract language. the structure of the
contract, the hargaining history and other relevant
evidence which the Court admits for your considera-
tion on the issue of the intent of the parties.

The result was a verdict finding the sympathy strikes to
be illegal under the collective bargaining agreement. Such
finding became the law of the case.

The distinction hetween the ixsue presented in Marre
and Morrell I is clear. In Morrell I the Eighth Cireuit,
reversing the district court's grant of a preliminary in-
junction. found that the Union had participated in 1986
sympathy strikes rather than economic strikes over ar-
bitrable grievances. The court had no need to addres«
the issue of waiver which was the ixeue in Morrell I.
This Court distinguished the two fesues in its order deny-
ing defendants’ motion to reconsider where it held:

In Morrell J. the issue was not whether the Union
had waived ite right to engage in sympathy strikes,
jun rather the issue was whether the Union had in
fact engaged in a sympathy strike which was exempt

53a

from injunction under the Norris-LaGuardia Act, 29
U.S.C. $104. At no time did the district court or the
Eighth Circuit Court of Appeals consider the factors
set forth in Amcar, supra, at 567 and decide whether
the Union waived its right to engage in sympathy
strikes.

In Morrell Il, the jury determined that Union had par-
ticipated im sympathy strikes. The issue for the jury,
then, was whether Union waived its right to sympathy
strikes under Amcar. This Court utilized special inter-
regatories to properly prepare this case for the ultimate
decision of the Eighth Circuit Court of Appeals. This
methodology permits a reversal without the expense of a
costly retrial.

Te allow the arbitrator's award to stand, the Court

contention ix absurd. Just as there comes a time when
“the court should cease listening to testimony that white
is black and that a dollar is fifty cents” (Corbin, The
Parol Evidence Rule, Yale L.J., 603, 623 (19441), a court
must use its “judicial discretion” and “common sense” to
view the realities of litigation, particularly in a case of
such staggering importance.

A review of this file makes it clear that neither party
in this series has left a stone unturned. The litigants
have briefed and argued each and every detail. The sug-
gestion that Morrell agreed to submit the legality of the
sympathy strikes to arbitration after having secured a
rdict flies in the face of common sense.

important in determining whether the parties

Most
agreed to submit the legality of the sympathy strike to
arbitration is the arbitrator's own characterization of the

＋
2
2

5da

issue before him. The arbitrator's award states the issue
as: “Do the seniority and discrimination provisions of
the parties’ collective bargaining agreement apply to the
recall of those employees who were on sympathy strike
from May 1 to November 4, 19877" Even more enlighten-
ing is footnote 2 following the issue statement where the
arbitrator noted Morrell's limited submission. Footnote
2 provides: “UFCW has attempted to subdivide this gen-
eral issue into a series of subissues. Because the company
only stipulated to the general issue, the arbitrator has
retained the more general formulation. Nowhere in the
arbitrator's issue statement does the arbitrator even hint
at the possibility that the legality of the sympathy strike
was submitted for arbitration.

The arbitrator, by deciding the legality of the sympathy
strike, ignored his own characterization of the issue be-
fore him. The arbitrator's failure to request evidence on
the issue of waiver served to reaffirm Morrell’s belief
that the legality of the svmpthy strike was not subject
to arbitration. Morrell’s failure to submit the evidence
already compiled in trial transcripts on the issue of
waiver demonstrates that it did not agree to arbitration
of the sympathy strike issue. To decide an issue of such
magnitude without the consent of Morrell and without
fully developing the record amounts to arbitration by
ambush.

Because this Court has found that the legality of the
sympathy strike was not properly before the arbitrator,
it would not need to reach the res judicata effect of the
jury verdict in Merre!l on the arbitrator's award. The
Court, however, does so in order to provide a complete
resolution of this case. Had the legality of the sympathy
strike been submitted to the arbitrator, he would have
been bound by the decision in Morrell II that the sym-
pathy strike was unlawful. The jury verdict in Morrell
1T was the law of the case and should have been followed
in the arbitrator's award determining the application of

55a

seniority and discrimination provisions of the collective
bargaining agreement.

In Stroh Container Co. v. Delphi Industries, Inc, 783
F.2d 743, 750 (Sth Cir.1986), the Eighth Circuit held
that while an arbitrator's Inte h retation of the law is
insulated from judicial review, an arbitrator's disregard
for the law is not and may open the door for judicial
scrutiny. The court held:

Further, such disregard must “be made clearly to
appear”... and may be found “when arbitrators
understand and correctly state the law, but proceed
to disregard the ame.

Id. The arbitrator in this case clearly delineated the law
to be applied, discussing both the Eighth Circuit's deci-
sion in Morrell I and the jury verdict in Morrell JJ.
The arbitrator then proceeded to disregard the same and
make an independent evaluation. The arbitrator ignored
the Eighth Circuit's decision in Morrell I claiming that,
“nor can the arbitrator be sure the Eighth Circuit will
abide by its prior decision, dicta or not.“ The arbitrator
ignored the jury verdict in Morrell II. stating:

It is true that the district court’s decision is more
directly on point, since it concerns this very strike.
But the Eighth Circuit will almost surely have the
last word. Further, the arbitrator does not have the
benefit of a transcript of the trial, the instructions
of the trial court, or any record evidence which would
give credence to the court's decision to submit this
issue to a jury. Thus, the arbitrator cannot be sure
of the basis for that decision.

It is fundamental law that a jury verdict ie the law of
the case and is final and binding until reversed by an

This Court beliewes that Merril I was properly decided under
the theory of the case presented. It does not comeider the reference
te the contract provision and sympathy strikes dicta.

56a

appellate court. Stoll v. Gottlieb, 305 U.S. 165, 170, 59
S.Ct. 134, 136, 83 L.Ed. 104 (1938. To ignore the law
of the case simply because it has not yet been appealed
ie a manifest disregard of the law. Further, the law
remains the law and the fact that the arbitrator was con-
cerned that this Court may have erred in submitting the
ieeue of waiver to the jury is irrelevant. The Eighth
Cireuit Court of Appeals and not the arbitrator will be
the final authority as to whether this Court erred in its
trial submissions of Morrell II. An arbitrator does not
sit as an appellate court.

Whether the decisions of this Court made in both the
liability and damages phases of Morrell II and its opin-
ion in the present action are sound is a matter for the
Eighth Cireuit Court of Appeals. Morrell II is currently
on appeal to the Eighth Circuit. To ease judicial adminis-
tration, this Court has attempted to place this case in a
posture for appeal so that all issues arising out of these
sympathy strikes may be considered together.

It is therefore the determination of this Court that the
arbitrator exceeded his authority by deciding the legality
of the sympathy strike which was an issue not properly
hefore him and further the doctrine of res judicata pre-
cludes his further inquiry into the issue of the question
as to whether or not sympathy strikes were barred by

the collective bargaining agreement.

In view of the fact that the arbitrator deemed the
legality of the sympathy strike to be a prerequisite to the
subsequent award, the award of November 5, 1988, will
he vacated. Accordingly, it is hereby

ORDERED that the November 5, 1988. arbitration
award of arbitrater William E. Rentfro is hereby vacated.

IT IS FURTHER ORDERED that judgment is to be
entered in favor of John Morrell & Co.

57a
APPENDIX C

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION

CIV. 86-4126
86-4135

JoHN Morret & Co., a corporation,
Plaintiff,
vs.

LocaL UNION 304A oF THE UNITED Food AND CoM MER-
CIAL Workers, AFL-CIO anp CLC; UNITED Foob AND
COMMERCIAL WORKERS INTERNATIONAL Union, AFL-
CIO ann CLC,

Defendants.

ORDER
(Filed May 18, 1988

On March 25, 1988, Defendants moved this Court pur-
suant to Rule 50(b) of the Federal Rules of Civil Pro-
cedure for an order granting Defendants’ judgment not-
withstanding the verdict. On May 16, 1988, Plaintiff
filed its responsive pleading.

The record reflects that on March 1, 1988, this Court
empaneled a jury to determine the issue of liability in
this case. The jury reached a verdict for the Plaintiff on
March 14, 1988, finding that the strike of May 1, 1987,

1 Extensions of time were allowed both parties in order that these
post-trial motions be submitted in a timely fashion.

58a

was a sympathy strike and that Defendant Local Union
304A was prohibited by the terms of a collective bar-
gaining agreement from engaging in such sympathy
strikes.

Defendants’ motion for judgment notwithstanding the
verdict is directed solely to the issue of whether the
parties’ labor agreement prohibits sympathy strikes. The
record reflects that Defendants presented this Court with
extensive argument on this issue in the posture of a mo-
tion for directed verdict pursuant to Rule 50% / of the
Federal Rules of Civil Procedure both at the close of
Plaintiff's case and again at the close of all the evidence
presented at trial. No additional grounds are raised by
Defendants’ pending motion for judgment notwithstand-
ing the verdict.

In the alternative, should this Court deny Defendants’
motion for judgment notwithstanding the verdict, De-
fendants request that this Court certify the question pre-
sented for appeal pursuant to 28 U.S.C. § 12921 b).

The propriety of granting a motion for directed ver-
dict or for judgment notwithstanding the verdict is de-
termined by the same standard, both in the trial court
and on appeal. Svoboda v. Bowers Distillery, Inc 745
F.2d 528, 530 (Sth Cir. 1984). Such motions are to
be granted only when the nonmoving party has presented
insufficient evidence to support a jury verdict in his
favor. Id., citing Hauser v. Equifax, 602 F.2d 811, 814
(Sth Cir. 1979). Accordingly, the evidence presented is
viewed in a light most favorable to the nonmoving party
without assessing credibility and the nonmoving party is
entitled to the benefit of all inferences which may be
drawn from the evidence without engaging in specula-
tion. Id.

After having considered Defendants’ motion for judg-
ment notwithstanding the verdict, this Court finds that
the Plaintiff did present sufficient evidence to sustain a
verdict in its favor. Accordingly, the Defendants’ mo-

59a

tion for judgment notwithstanding the verdict will be
denied. In addition, this Court denies Defendant's alter-
native request for certification pursuant to 28 USC.
11292 b as this Court finds (1) that there is no sub-
stantial ground for difference of opinion respecting the
issues raised and (2) that an immediate appeal would
not materially advance the ultimate termination of this
litigation.
Accordingly, it is hereby

ORDERED that Defendants’ motion for judgment not-
withstanding the verdict pursuant to Rule 50% of the
Federal Rules of Civil Procedure is denied.

IT IS FURTHER ORDERED that Defendants’ mo-
tion for certification pursuant to 28 U.S.C. § 1292(b) is
denied.

IT IS FURTHER ORDERED that the trial of the
damages portion of this case shall commence on Tuesday,
November 1, 1988, at 9 a.m., as the Court's =2 case
scheduled for that day.

Dated this 18th day of May, 1988.

By THE CouRT:

Richard H. Battey
RicHArD H. BATTEY
United States District Judge
ATTEST:

WILLIAM F. CLAYTON
Clerk

By Alice R. Raesly
Deputy Clerk

(SEAL)

60a
APPENDIX D

UNITED STATES COURT OF APPEALS
EIGHTH CIRCUIT

No. 86-5364

JOHN MorreLL & COMPANY,
Appellee,
Ve

LocaAL UNION 304A oF THE UNITED Foop AND COMMER-
CIAL Workers, AFL-CIO; UNITED Food AND COMMER-
CIAL WoRKERS INTERNATIONAL UNton, AFL-CIO and
CLC,

Appellants.

DENNIS Foster, individually and in his capacity as presi-
dent of defendant Local 304A; JAMES R. Lyons, indi-
vidually and in his capacity as Business Representative
and Corresponding Secretary of defendant Local 304A;
JOHN Do and OTHER PERSONS UNKNOWN.

Submitted Oct. 17, 1986

Decided Oct. 30, 1986

Before LAY, Chief Judge, and FAGG and BOWMAN,
Circuit Judges.
PER CURIAM.

Local Union 304A of the United Food and Commercial
Workers, AFL-CIO ‘Local 304A) appeals the district

6la

court’s grant of John Morrell & Company's motion for a
preliminary injunction. We reverse.

John Morrell & Co. (Morrell) is a meat processing busi-
ness with facilities in Sioux Falls, South Dakota and
Arkansas City, Kansas Ark City). Local 304A, an
affiliate of the United Food and Commercial Workers
International Union, AFL-CIO and CLC, represents em-
ployees at the Sioux Falls plant and negotiates collective
bargaining agreements with Morrell on behalf of those
employees. Local 340, a different local of the same inter-
national, represents and negotiates with Morrell on behalf
of employees at the Ark City facility. Neither local is a
party to the other local’s contract with Morrell.

When Local 340 contract with Morrell expired on
July 1, 1986, its members struck at the Ark City plant to
exert pressure on Morrell to negotiate a new collective
bargaining agreement. On two separate occasions, Au-
gust 4 and August 15, 1986, members of Local 340 also
set up picket lines at the Sioux Falls facility. Local 340’s
business agent testified on cross-examination at the hear-
ing on the preliminary injunction that Local 340’s expecta-
tion was that if the Sioux Falls employees honored the
picket lines, more pressure would be exerted on Morrell
to negotiate favorably with the Ark City employees. On
both dates, all but one to two percent of the Sioux Falls
employees represented by Local 304A refused to cross
Local 340’s picket lines. While it appears that some
officers of Local 304A spoke with Local 340 picketers, no
evidence in the record indicates that any member of Local
304A carried picket signs or placards or engaged in any
strike activity other than refusing to cross the picket line.
The president of Local 304A testified before the district
court that his intent as a member of Local 304A in refus-
ing to cross Local 340’s picket line was to show support
for Local 340 in its contract negotiations with Morrell,

' The Honorable Fred J. Nichol, United States Senior District
Judge for the District of South Dakota, presiding.

62a

and that there was no underlying dispute between Local
304A and Morrell.

Anticipating that Local 304A might take action in
support of the Ark City employees, Morrell informed
Local 304A by letter on July 30, 1986, that it believed
that the no-strike clause in their collective bargaining
agreement prohibited Local 304A from honoring a picket
line set up in Sioux Falls by Local 340. In that letter,
Morrell stated that any Sioux Falls employees who par-
ticipated in such a strike were subject to termination.
On August 4, 1986, the first date Local 304A members
refused to cross Local 340's picket line, Morrell sought a
temporary restraining order, preliminary injunction, and
permanent injunction. That same day, before the issues
could be addressed by the district court, Local 340 dis-
mantled its picket line and Local 304A made an uncon-
ditional offer to return to work. Although the Sioux
Falls employees did return to work on the evening of
August 4, Morrell took disciplinary action against the
strike participants by noting each employee's absence on

* The no-strike clause reads:

Provisions having been made by this Agreement and local
agreements for the peaceful and orderly settlement of any dis-
putes which may arise between Company and the Union or
local Unions or any Employee or Employees, it ix agreed that
during the term of this Agreement there shall be no «trike,
stoppage, slowdown, or suspension of work on the part of the
union or any local Union or any Union member or lockout on
the part of the Company on account of such disputes until after
an earnest effort shall be made to settle all such matters in the
manner provided in the respective agreements.

Article II £5, Agreement Between John Morrell 4 Co. and Local
304A and the International Union of the United Food and Com-
mercial Workers, Nov. 20, 1985—Nov. 19, 1988.

*Local 204A's unconditional offer to return to work «tated:
“The picket line is coming down. We're making an unconditional
offer to return to work on behalf of the membership of Local 204A,
with the regular shifts, starting with tonight.”

63a

August 4 as “unexcused” in its files. In protest of Mor-
rell's action, Local 304A filed a class grievance.

On August 15, when the members of Local 304A re-
fused to cross a new picket line established by Local 340,
Morrell applied for and obtained a temporary restrain-
ing order. After an evidentiary hearing on August 18,
1986, at which Local 304A moved the district court to
vacate the TRO and deny Morrell further injunctive
relief, the district court grented Morrell a preliminary
injunction which prohibited Local 304A and all persons
acting in concert with its members from participating in
work stoppages at the Sioux Falls plant. The district
court ordered that the issues raised in the court's memo
randum opinion and order be submitted to arbitration.
In its memorandum opinion, the district court found that
the August 4 strike was a sympathy strike which could
not properly be enjoined. However, relying on the fact
that the second work stoppage occurred after the union
had submitted an unconditional offer to return and had
filed the class grievance, it concluded that the August 15
net jon was only in the guise of a sympathy strike and had
been transformed into a dispute over underlying arbitrable
issues. Because it had concluded that the second strike was
over an arbitrable grievance covered by the terms of the
parties’ collective bargaining agreement, the district court
determined that the second strike could be enjoined. After
unsuccessfully seeking a stay from the district court
pending appeal, Local 304A petitioned this court for an
expedited hearing, which we granted.

To determine whether the district court properly en-
joined Local 304A's strike activities, we start with the
congressional limitation on a federal court's jurisdiction
to issue orders enjoining a strike, set out in section 4 of
the Norris-LaGuardia Act, 29 U.S.C. £104." A narrow

= — —

* Section 4 of the Norris-LaGuardia Act provides, in pertinent
part:

No court of the United States «hall have juriediction te lene

any restraining order or temporary of permanent injunction

fda

exception to this statutory prohibition from enjoining
strikes was established by the Supreme Court in Boys
Markets, Ine. „, Retail Clerk’'a Union, 398 U.S, 235, 90
S.Ct. 1583, 26 J. Ed. 2d 199 +1970). which allows an in-
junction to issue only if the strike is over a dispute which
under the parties’ collective bargaining agreement should
be submitted to arbitration. In two subsequent cases, the
Supreme Court emphasized the narrowness of the Bowe
Markets exception and held that a Boys Marketa injune-
tion may not issue unless the strike has been triggered
by an arbitrable dispute. Se Jackaonrille Bulk Termi-
pale, luc. . International Jun An, 457
U.S. 702, 102 S.Ct. 2672, 73 L.Ed.2d 327 (1982), and
Buffalo Forge Co. „. United Steelworkers, 428 U.S. 397,
S.C. 3111. 1 J. Ed.2d 1022 61976) both cited in
Pure Corp. „. Automotive, ete. Employees Union, 705
F.2d 273. 276 Sth Cir.1983) +.

In gauging the Intended scope of the Boye Marketa
exception to the anti-injunction rule, this court has ob-
served that

he Supreme Court's opinions in Buffalo Forge and
Jacksonville Balk Terminals analyze the Boys Markets
exception as a means for effectuating the national
policy favoring agreements to arbitrate, and not as
an enforcement mechanism for no-strike clauses, Both
Buffalo Forde and Jacksonville Bulk Terminala dia-
tinguish between strikes where the underlying dis-
pute is arbitrable and those where the legality of the
strike itself is arbitrable. Only in the form category
are strikes subject to injunction, because only there
in any case invelving or growing out of any labor dispute. to
prohibit any person or persons participating or interested in
such dispute * * * from doing, whether singly or in concert,
any of the following acts:
fa) Ceasing or refusing te perform anv work or to remain
in any relation of employment
29 U.S.C. § 101.

pute between Local 304A and Morrell, and did not find
that members of Local 204A struck at any time other
than the two separate dates that Local 340 pickets ap-
peared in Sioux Falls, the district court concluded ax
a matter of law that local A“ refusal on August 15
to crest Local 10's picket line was precipitated by the
crievanee filed by Local 304A to protest Morrell's disci-
pline of employees who participated in the August 4
strike. The district court concluded that the second strike
therefore fell within the Bows Markets exception and could
be enjoined. For this conclusion, we can find no

in the record, in the district court's findings of fact, or
in the applicable case law.

Neo evidence indicates that Local A was attempting
te clreumvent its contracted-for obligation to process this
dispate through nermal arbitration channels by striking.
To the contrary, the record shows that Local 304A has
sough', net avoided, arbitration of the grievance. Moere-
over, arbitration of the grievance will not resolve what
the district court itself found to underlie Local 304A's
strike actions—the desire to show support for Lo
cal 310. The evidence does indicate that a werk stop-
page oecurred at the Sloux Falls plant on August 15 only
when Local 310 pickets reappeared. The chronology of
events on which the district court relied cannot alone sup-
port an inference that the August 15 strike was over
Morre!l’s disciplinary acts, expecially when the evidence
ut the hearing uniformly supperts a conclusion that the
August 15 strike, lke the August 4 strike, was solely a
sympathy strike in support of Lal 340, Nothing in the
record or in the district court's findings supports an in-
ference of a cate and effect relationship between the
wrievance and the August 15 strike.

Further, the distriet court's reliance on Complete Aute
Treveit, lee. „ Rel GUE Pd 1110 ith Cir 1980), aff'd
on . ovewnds, AST US. 401, 101 S.Ct. 1898, 68 L.Ed od
sis Tost), to conclude that the August 15 werk stoppage

67a

Was transformed into a strike over an arbitrable grievance
is misplaced. In Complete Auto, the evidence in the record
imficated that although the original non-arbitrable event
causing the strike was resolved, the strike continued over
an admittedly arbitrable dispute. /d. at 1111. The Sixth
Cireuit held that in determining the cause of a strike for
purposes of issuing an injunction, a district court should
consider What the strike was “over” at the time of its
decision rather than what “precipitated” the strike in the
first place. Id. at 1114.

Here, the went causing the August 4 sympathy strike,
Local 2340's stalled contract negotiations with Morrell, re-
mained unreselved as of August 15. The fact that Local
WHA filed a grievance indicates that Local 304A was
comsciows'y Invoking arbitration machinery to reso've the
dispute. The Sixth Circuit's reasoning in Complete Auto
does net teoch that whenever a grievance is pending which
arose out of a strike that could not be enjoined, a union
cannet subsequently engage in another protected strike.
We knew of ne court which has relied on . ‘omplete Auto's
“transformation” analysis to find an injunction of a strike
warranted. Nor does any case of which this court is
aware, incheding Complete Auto, hold that because a griev-
ance is pending a subsequent strike ix presumptively under-
taken in rexpemse to the dispute underlying that griev-
ance, Moreover, the Sixth Circuit itself has apparently
questioned the continuing vitality of Complete Auto's
transformation theory. Although Complete Auto was
affirmed om other grounds on appeal, in a subsequent case
discussing the prerequisites to issuance of an injunction
pending arbitration, that court noted that “the Supreme
Court has net addressed the validity of the transforma-
* henry ana! ysis.” 15. ruational Union Uniled Aulomolile,
ete, Workers © Lester Hung C, 718 F.2d 818, 824 n. 1
th Ch deste ‘citing urteile Bulk Terminale, 457
US. at T2t w. 22, 102 S.Ct. at 2685 n. 22). Complete
hee lends me support to the district court's conclusion

68a

that the August 15 strike was not a sympathy strike to
the same extent as was the strike on August 4°

The uncontradicted evidence in the record indicates that
although Local 304A's filed grievance resulted from Mor-
rell’s retaliation for Local 304A's participating in the
August 4 strike, the grievance did not precipitate Local
3044's participation in the August 15 strike. Neither
the record nor the district court's own findings support
the district court's conclusion that the August 15 strike
was not a sympathy strike but had been transformed by
virtue of the filed grievance into a strike over an arbitra-
ble matter. Because there is no evidence in the record to
support the district court's finding that the August 15
strike was over an arbitrable grievance, the strike does

In concluding that the August 15 work stoppage was in the
“guise” of a sympathy strike, the district court emphasized that
Local 304A had made an unconditional offer to return to work which
the district court “accepted.” Citing no authority for ite cnc h-
sions, the district court interpreted the “offer” ax becoming part
of the collective bargaining agreement, presumably concluding that
in making the offer Local 304A waived its right to engage in any
future strike of any kind. We believe that this interpretation of
the events of August, 1986 overlooks the function of unconditional
offers in labor relations as a means to conclude a strike and re-
instate strikers to their original jobs without the union members
being displaced by replacement workers. Ser, e NLRE ©. Fleet-
wooed Trailer Co, 289 US. Na. 380-81, „ S.Ct. 38. 546-47, 19
I. Ed d 614 (1967); CH. Gaenth

[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_IA40385009_1757%3A2. Public record. Not legal advice.