Amicus Curiae Brief — Anheuser-Busch, Inc. v. Teamsters Local No. 633

(i)

TABLE OF CONTENTS

STATEMENT OF INTEREST ...............

ARGUMENT:

I, National Labor Policy Recognizes that

Management Has and Must Retain the Right

to Establish and to Enforce Reasonable

Plant Rules Not Inconsistent with the Law

or the Collective Bargaining Agreement ...

II. The Decision of the Court of Appeals

Seriously Undermines the Holding of Boys

Markets v. Retail Clerks and Must Not

Ge AMowed to DOME oc cc cdasesnnss

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TABLE OF CITATIONS

Cases:

Boys Markets, Inc. v. Retail Clerks Union, 398 U.S.

235 G9) wee ee eee

Gateway Coal Co. v. United Mine Workers, 414 US.

SB (IGM) 6 cc Co ae eee

Local 174, Teamsters v. Lucas Flour Co., 369 US.

95.166 C9962) 0.654544 nee eee ee

H. K. Porter Co., Inc. v. NLRB, 397 U.S. 99 (1970)

Textiles Workers v. Lincoln Mills, 353 U.S. 448

(i967) .ccsnk eGR

United Steelworkers of America v. Warrior and

Gulf Navigation Company, 363 U.S. 574 (1960)

Avco Corp. v. Local 787, UAW 325 F. Supp. 588

(D. Pa. 1971) rev'd 459 F.2d 968 (3d Cir.

SDTED: o.0 0: 5-5'vi nip aca mcere pa nes

Ed Friedrick v. 1.U.E., __. F.2d ___, 89 LRRM

SAT (3h Ch, 1978) oo ai Slee eee

le we me fc oe ie

(ii)

Local 1098, Street, Elec. Ry. & Motor Coach

Employees v. Eastern Greyhound Lines, 48 CCH

LC 918,633 (D.D.C. 1963) ...........+---

Arbitrator’s Decisions:

Celotex Corp., 36 LA 517 (Dworken, Arb. 1961) .

City of Janesville, 64 LA 783, (Schurke, Arb. 1975)

Parkside Manor, 53 LA 411 (Belcher Arb. 1969) ..

Owens-Illinois, Inc. 702 CCH ARB 48606 (Stouf-

ee Se ee ere ee ee ee

Thompson Bros. Boat Mfg. Co., 55 LA 69, 72-73

(Moberly, Arb. 1970) .........---eeeees

Articles:

A. Cox, Law and the National Labor Policy, (1960)

Statutes & Miscellaneous:

Bureau of National Affairs, Basic Patterns in Union

CE Nei s nh wen een a sark a tes 0.0

Labor Management Relations Act, §8(d) 29 U.S.C.

.S thatuen « © Ya 6 ee Se a oe ee ee

2 D> @. 2

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1974

No. 74-1633

ANHEUSER-BUSCH, INC.,

Petitioner,

TEAMSTERS LOCAL NO. 633,

NATIONAL CONFERENCE OF BREWERY

AND SOFT DRINK WORKERS, SOCRATES MAKRIS,

STEVEN J. MCCULLOUGH, FRANK SEBAN,

Respondents.

BRIEF OF AMICUS CURIAE

UNITED STATES BREWERS ASSOCIATION, INC.

IN SUPPORT OF PETITION FOR

WRIT OF CERTIORARI

INTEREST OF THE AMICUS CURIAE*

The United States Brewers Association, Inc., the

oldest incorporated trade association in North America,

is an association of brewer members whose production

represents over 90 percent of all malt beverages manu-

factured in the United States. The Association membership

*This brief is filed with the written consent of all parties

pursuant to Supreme Court Rule 42(1).

cides Nk ARATE SETA eS Dit EP Oe: SPS Pe PIRES a ERLE KE BN YER

2

also includes the major suppliers of the brewing industry,

such as bottle and can manufacturers, maltsters and

manufacturers of brewery equipment and machinery.

This brief amicus curiae supports the position of the

petitioner urging the Court to review the decision of

the Court of Appeals for the First Circuit. The interest

of the amicus is predicated upon the far-reaching

significance of this case which will profoundly affect

the continuing validity of the premise that “the basic

policy of national labor legislation (is) to promote the

arbitral process as a substitute for economic warfare.”

Local 174, Teamsters v. Lucas Flour Co., 369 U.S.

95.105 (1962). That precept will be dangerously eroded

if the Court permits the decision below to stand.

Boys Markets v. Retail Clerks Union, 398 U.S. 235

(1970), allows injunctive relief when a union engages in

concerted interference with operations in direct abroga-

tion of its no-strike commitment pending arbitration of

a contractually-authorized work rule.

The importance or the intrinsic significance of the

work rule that gave rise to the dispute is not an issue in

this litigation. The Court of Appeals’ droll comment

that ‘“(t)his tempest has been brewed in a very small

teapot” is a facile but misleading characterization of the

real issue submitted to it for decision. The present case

will determine whether, pending the outcome of the

arbitration process, management will retain the right to

effectively direct the manner in which production will

be carried out in its plant. In fact, the Court of

Appeals’ opinion has turned the “teapot” into a

“Pandora’s box” which has the potential of severely

disrupting the constructive evolution of the nation’s

labor relations policy.

For this reason the case is a critical one warranting a

presentation of our Association’s view.

3

I. National Labor Policy Recognizes that

Management Has and Must Retain the Right

to Establish and to Enforce Reasonable Plant

Rules Not Inconsistent with the Law or the

Collective Bargaining Agreement.

Management has the fundamental responsibility of

running its business efficiently and profitably. The

consequences of unprofitable and inefficient operations

are fatal to the economic interest of both management

and labor. The right to manage includes the corollary

prerogative to establish reasonable plant rules not

inconsistent with law or the collective bargaining

agreement. In United Steelworkers of America vy.

Warrior and Gulf Navigation Company, 363 U.S. 574

(1960), the Court expressed the moder view of

management’s rights with respect to the collective

bargaining agreement:

“Collective bargaining agreements regulate or

restrict the exercise of management functions; they

do not oust management from the performance of

them. Management hires and fires, pays and

promotes, supervises and plans. /d. at 583; Cf.

Local 1098, Street, Elec. Ry. & Motor Coach

Employees v. Easiern Greyhound Lines, 48 CCH

LC 918,633 (D.D.C. 1963).

Similarly, arbitrators have consistently held that

Management retains all named rights of management

not given direct or ceded by the terms of the Collective

Bargaining Agreement. Owens-Illinois Inc., 70-2 CCH -

ARB 48606 (Stouffer, Arb. 1970). If managements

right to manage is unenforceable, then that right may as

well not exist.

4

All collective bargaining agreements of our brewer

members contain broad “no strike” clauses and equally

broad “grievance-arbitration” procedures similar to

those at issue in this case. That is, the employer is

obligated to arbitrate in return for union’s promise not

to strike or otherwise disrupt production. Local 1/74,

Teamsters v. Lucas Flour Co., supra. These provisions

are intended to ensure that production continues even

when an employee is given an order he feels is unfair,

discriminatory, or in violation of the agreement. The

employee may challenge the employer’s order through

the grievance procedure established by the collective

bargaining agreement, but not through self-help. By

agreement, it is the arbitrator, not the employee, who is

to determine the contractual validity of the employer’s

order or rule. Pending arbitration, the employee must

obey the order or rule unless it presents an objective

threat to his health or safety.' Cf. Gateway Coal v.

United Mine Workers, 414 U.S. 368 (1974).

The continuing application of this principle has

recently been illustrated in circumstances similar to

those presently before the Court. An employer

unilaterally posted a work rule requiring employees to

wear white tee shirts under their uniform shirts during

the summer, and the employees responded by refusing

to obey rather than by filing a grievance. The arbitrator

upheld disciplinary suspensions, saying:

'The pleadings and court decisions in this controversy have

shown no such threat to an employee’s health or safety.

5

“The grievant’s self-help response to the work rule

was not justified by any threat to his health or

safety, and cannot be condoned. While the work

rule must itself fail as being unreasonably

overbroad, the insubordination of the grievant

prevents his recovery of the wages lost.” City of

Janesville, 64 LA 783, 787 (Schurke, Arbitrator)

Arbitration in the brewing industry, as in others, is

hardly immediate. It is not uncommon for three

months or more to elapse between the time a grievance

is filed and the arbitrator’s final decision. If an

employee is permitted to ignore an order or rule

pending arbitration, management’s right to direct its

enterprise will be frustrated for several months. The

prejudicial effects of the delay in implementing a work

rule may be compounded by the fact that the

employer’s need for the work rule may have passed by

the time its right to implement it has been approved by

an arbitrator. For example, disputes often arise over the

question of whether an employer has the right under

the collective bargaining agreement to require his

employees to work overtime. Under the reasoning of

the Court of Appeals’ decision, the employees could

refuse to accept overtime assignments pending arbitra-

tion of the dispute. However, if the employer’s

interpretation ultimately prevails, he will have lost

many days of production to which he was entitled

under the contract.

6

The District Court recognized that Anheuser-Busch’s

fundamental right to manage was being threatened by

the concerted employee disregard of a company work

rules pending arbitration, and enjoined this conduct. As

the Court noted in Boys Markets v. Retail Clerks

Union, supra, an injunction was necessary because no

other remedy would suffice:

“Any incentive for employers to enter into such

an arrangement is necessarily dissipated if the

principal and most expeditious method by which

the nostrike obligation can be enforced is

eliminated. While it is of course true, as

respondent contends, that other avenues of redress,

such as an action for damages, would remain open

to an aggrieved employer, an award of damages

after a dispute has been settled is no substitute for

an immediate halt to an illegal strike. Furthermore,

an action for damages prosecuted during or after a

labor dispute would only tend to aggravate

industrial strife and delay an early resolution of the

difficulties between employer and union.” /d. at

248 (footnote omitted).

If the Court of Appeals’ decision is permitted to stand,

management will be deprived of the right, which it has

not bargained away, to effectively direct the manner in

which production will be carried out in its plant.

The decision of the Court of Appeals violates the

basic national labor policy that substantive terms and

conditions of employment shall be left to private

negotiations by effectively incorporating in every

collective bargaining agreement a provision that the

employer must receive the union’s consent before

changing a company work rule. Our nation’s evolving

labor relations law has provided a framework for

collective bargaining. The National Labor Relations

7

Board, under the Taft-Hartley Act, enforces the

fundamental right to organize and the duty to bargain.

This process has created a body of decisional law which

requires employers to negotiate upon mandatory

subjects and regulates the manner in which negotiations

are conducted. But the NLRB and the courts have

continually refused to dictate the substantive provisions

of the collective bargaining agreement. See generally, A.

Cox, Law and the National Labor Policy (1960). In

1947, Congress recognized the temptation for the

NLRB to “seek to control more and more of the terms

of collective bargaining agreements,” and so amended

Section 8(d) to provide:

“For the purposes of this section, to bargain

collectively is the performance of the mutual

obligation of the employer and the representative

of the employees to meet at reasonable times and

confer in good faith with respect to wages, hours,

and other terms and conditions of employment, or

the negotiation of an agreement, or any question

arising thereunder, and the execution of a written

contract incorporating any agreement reached if

requested by either party, but such obligation does

not compel either party to agree to a proposal or

require the making of a concession,” 29 U.S.C.

158(d). (Emphasis Added) See H.R. Rep. No. 245,

80th Cong., Ist Sess., 20 (1947)

Recently the Court reaffirmed the vitality of this

provision in H.K. Porter Co., Inc. v. National Labor

Relations Board, 397 U.S. 99 (1969):

“. [Wle hold that while the Board does have

power under the National Labor Relations Act, 61

Stat. 136, as amended, to require employers and

employees to negotiate, it is without power to

compel a company or a union to agree to any

Bern GOTRKIO EDIE ERIN IB DLA LE CLIC OTE ES A FE AR, PL OM

8

substantive contractual provision of a collective

bargaining agreement.” Jd. at 102.

And yet, the Court of Appeals has in effect imposed

upon the employer an obligation to refrain from

making and enforcing any work rules pending arbitra-

tion in virtually every situation. The vast majority of

Brewers and other unionized employers proceed from

the assumption that the employer has the reserved right

to unilaterally implement changes in the company’s

work rules. By contract, the union has the right to

challenge the reasonableness of the rule or its

application ‘through the grievance and arbitration

procedure. A rrovision requiring the employer to obtain

the union’s consent before changing a company work

rule, commonly known as a “status quo” clause, is

found in a small minority of collective bargaining

agreements. A study by the Bureau of National Affairs

disclosed that approximately 2 percent of the contracts

surveyed contained provisions that mention changes in

the company work rules and required the union’s prior

consent. Bureau of National Affairs, Basic Patterns in

Union Contracts, 1975, p. 95:7.

Indeed, in the contract underlying the dispute at

issue in this case, the employer and unicn have agreed

to a limited “status quo” clause rzlating to the

discipli..c of shop stewards. See, Collective Bargaining

Agreement, Article 5, Section 2. Obviously, this is a

subject either party may broach in collective bargaining.

If a union seeks the right to require its approval of

management’s rules before implementation, it should

bargain for this right. It should be emphasized that by

including a limited “status quo” clause relating to

steward discipline, the union recognized a particular

9

need and through the bargaining process limited

management’s rights to unilaterally impose discipline

with regard to stewards. The effect of the Court of

Appeals’ decision is to modify the party’s agreement by

expanding the “‘status quo” clause from the narrow area

of steward discipline to cover virtually all changes in

working conditions. This is clearly contrary to the proper

role of the judiciary in the collective bargaining process.

The Court must not allow the Court of Appeals

decision to circumvent the collective bargaining process

and deprive management of its fundamental right to

establish reasonable plant rules not inconsistent with the

law or the collective bargaining agreement.

II.The Decision of the Court of Appeals

Seriously Undermines the Holding of Boys

Markets v. Retail Clerks and Must Not be

Allowed to Stand.

The Court, in a series of decisions starting with Textile

Workers v. Lincoln Mills, 353 US. 448

(1957), through Boys Markets v. Retail Clerks Union,

supra, and Gateway Coal Co. v. United Mine Workers,

supra, has achieved and maintained a delicate balance

between the interests of management and labor by

modifying the type and use of economic weapons

available to parties in a labor dispute. The Court in

Boys Markets recognized that the only practical way to

carry out a promise not to strike is not to strike, and

the only practica way to enforce the promise is

through an injunction. The no-strike clause encompasses

- eee eee SS SL.aQQIEINeaeaeeeeen— LEE

10

not only formal work stoppages, but also concerted

interference with normal operations. The decision of

the Court of Appeals circumscribes the Court’s holding

in Boys Markets v. Retail Clerks Union, supra, by

restricting use of a court injunction to concerted

activity constituting a formal strike — a restriction

inconsistent with the Court’s opinion in Boys Markets:

““... the very purpose of arbitration procedures is

to provide a mechanism for the expeditious

settlement of industrial disputes without resort to

strikes, lockouts, or other self-help measures. This

basic purpose is obviously largely undercut if there

is no immediate, effective remedy for those very

tactics that arbitration is designed to obviate.” /d.

at 249. (Emphasis Added)

There is a serious question whether under the

applicable collective bargaining agreement the employer

is permitted io initiate a grievance proceeding. Cf. Ed

Friedrick v. I.U.E., F.2d , 89 LRRM 2847

(Sth Cir., 1975). But assuming arguendo that an

employer may have the right to file a grievance over

employee disobedience of a work rule, the necessity for

an injunction in cases where employees engage in a

concerted refusal to obey a work rule remains. In fact,

in Boys Markets, supra, access to arbitration procedures

was equally available to both sides. Jd. at 239. It is not

clear in that case if the employer took formal steps to

initiate grievance proceedings; however, the Court’s

opinion did not hold or intimate that the availability of

the grievance procedure to the employer would be a reason

for withholding an injunction.? There is no relation

2Indeed, some courts considered mutuality of access to the

grievance procedure a prerequisite to a Boys Market injunction.

Avco Corp. v. Local 787, UAW, 325 F. Supp. 588 (M.D. Pa.

1971) rev'd 459 F.2d 968 (3d Cir. 1972).

CPE RELO NNER?

— PEREIRA IE BR Gin ARETE ENE DRL ITE Me MT TL ITED Ot

1]

between employer access to the grievance procedure

and the propriety of an injunction prohibiting self-help

pending arbitration. Even if the employer could and did

initiate grievance proceedings, the underlying issue in

this case would not be resolved: whether the employees

may engage in concerted disobedience of a work rule

pending arbitration.

The First Circuit was of the opinion that the closing

of the plant was self-inflicted. In fact, the employer had

no practical alternative to the course of action it

adopted short of suspending the work rule. Arbitrators

have held that disciplinary demotions, transfers, with-

holding of benefits, and forcing public apologies are

improper forms of discipline. See, e.g., Thompson Bros.

Boat Mfg. Co., 55 LA 69, 72-73 (Moberly, Arb., 1970);

Parkside Manor, 53 LA 411 (Belcher, Arb., 1969);

Celotex Corp., 36 LA 517 (Dworkin, Arb., 1961). As

the record in this case indicates, warnings proved

ineffective and discharge would have been even more

severe. Additionally, imposition of the discipline under

these circumstances cannot be construed as a lockout.

Indeed, the record below is devoid of any contention

that management had engaged in a lockout.

It is the position of the United States Brewers

Association that the Court of Appeals decision

encourages precisely what the Court sought to avoid in

Boys Markets. If the Court of Appeals decision is

permitted to stand, it will subvert the balance created

in Boys Markets, by rewarding inventive, but equally

disruptive, alternatives to a formal strike, and will

frustrate the peaceful settlement of labor disputes so

carefully pursued by the Court.

aE eo AIRS

12

CONCLUSION

For the reasons stated herein, as well as for those

stated by petitioner, the United States Brewers

Association prays the Court to grant the Petition for a

Writ of Certiorari and to reverse the decision of the

Court below.

Respectfully submitted,

ALLAN A. RUBIN

MICHAEL B. ALLDERDICE

1750 K Street, N.W.

Washington, D.C. 20006

Counsel for Amicus Curiae

— RIE LI ERLE SORE ST LOOSE BOOLIAN ORR Ei EM PBN ERIE