Petition for Writ of Certiorari — United Steelworkers of America v. USX Corp.

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DRFICETOPm THE Clink

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Petitioner,

USX CORPORATION,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

CARL B. FRANKEL ROBERT M. WEINBERG

RUDOLPH L. MILASICH, JR. (Counsel of Record)

Five Gateway Center VIRGINIA A. SEITZ

Pittsburgh, PA 15222 MARTIN S. LEDERMAN

Jor R. WHATLEY, JR. ANDREW D. ROTH

Cooper, MITCH, CRAWForD, BREDHOFF & KAISER

KUYKENDALL & WHATLEY 1000 Connecticut Avenue, N.W.

505 20th Street North Washington, D.C. 20036

1100 Financial Center (202) 833-9340

jirmingham, AL 35203

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON, D.C. 20001

® EF «0

QUESTION PRESENTED

Did the Eleventh Circuit err in holding—in conflict

with the Fifth and First Circuits—that a federal district

court is powerless to enforce a labor arbitration award di-

recting a party to a collective bargaining agreement to

cease and desist from continued violations of the

agreement?

(i)

TABLE OF CONTENTS

QUESTION PRESENTED ..............-----.-:.-------:s2eeeeteeees

TABLE OF AUTHORITIBS .............................0...-.--c0000-+-

PTI BRIGLAOA. ............-..---0nnnc0.-nccc..0cnes-eecccnsenoncnoecee

I I cess snsnsnmnnsenacunciecssasernnconssenenasccsnserasscecces

STATUTORY PROVISION INVOLVED .......................

STAT Eman: OF THE CASE. ...............................0..-...-

REASONS FOR GRANTING THE WRIT ..........-.....

SEI os ccskisxvesnxnessederesenssennssanssccevesecnsessevensevsenseenese

APPENDICES:

Opinion of the United States Court of Appeals

for the Eleventh Circuit (July 24, 1992)

Judgment of the United States Court of Appeals

for the Eleventh Circuit (July 24, 1992)

Opinion of the United States District Court for

the Northern District of Alabama (March 15,

oes hs csi duniciistcnnncenneawsnnesecassonese

Injunction Issued by the United States District

Court for the Northern District of Alabama

(March 15, 1990)

Opinion of the United States District Court for

the Northern District of Alabama (April 3,

Neen sss nawsinonannnnncensenes .

Amended Injunction Issued by the United States

District Court for the Northern District of Ala-

bama (April 3, 1990)

25a

27a

33a

35a

TABLE OF CONTENTS—Continued

Page

Award Issued by the USX/USWA Board of

Arbitration (February 7, 1989) ...............2000........ 38a

Order of the United States Court of Appeals

for the Eleventh Circuit Denying Petition for

Rehearing with Suggestion for Rehearing En

Banc (October 14, 1992) _........... semana dermal 47a

Section 2-C of the Agreement Between USX and

the USWA (February 1, 1987) _........... DT yn 49a

TABLE OF AUTHORITIES

Cases Page

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202

(19865) ......-...-----0-a--c-seceesnerornencnsneneenennenaresntnsnnencecesecnen 9,16

Boston Shipping Ass’n v. International Longshore-

men’s Ass’n, 659 F.2d 1 (1st Cir. 1981) ......-------. passim

Derwin v. General Dynamics Corp., 719 F.2d 484

(1st Cir. 1988) -........-..-.--------------s---cscsesesesnee essere 12

International Chemical Workers Local 227 v.

BASF Wyandotte Corp., 774 F.2d 43 (2d Cir.

DOI) accnin encase ssn nttnen sn cinnnnesennenennssonensnesene 12

Oil, Chemical & Atomic Workers v. Ethyl Corp.,

644 F.2d 1044 (5th Cir. Unit A May | 3} passim

United Electrical Workers of America v. Honey-

well, Inc., 522 F.2d 1221 (7th * ae): | er 13

United Mine Workers Local 1545 v. Inland Steel

Coal Co., 876 F.2d 1288 (7th Cir. | nn 12

United Paperworkers v. Georgia Pacific Corp., 798

F.2d 172 (6th Cir. 1986) ............------------------1-- 12

United Paperworkers v. Misco Inc., 484 U.S. 29

(1987) ....n-n.c-c-necesenenensnserosnenenenensnensnensnerensssnenenensnsees 15

United Steelworkers of America v. American Mfg.

Co., 363 U.S. 564 (1960) ..........-------------1eeeee 11

United Steelworkers of America v. Enterprise

Wheel & Car Corp., 363 U.S. 593 (1960) .......--.-- 11,15

United Steelworkers of America v. Warrior &

Gulf Navigation Co., 363 U.S. 574 (1960)........ 11

Statutes

28 U.S.C. § 1254(1) .......--------------eeeeeeeeeees aes 2

QB U.S.C. § 1291 .........-.----------0---ceensensenssenenseesnesnrsenennens 2

28 U.S.C. § 1292 (a) (1).....------2---c-sceeceeceeeeceeeeeeeeee tte 2

29 U.S.C. § 185.........--..-------c---ceeensenseesesnnnnesnensonseseesnees passine

Miscellaneous

Elkouri & Elkouri, How Arbitration Works (4th

Oa I sects cecceneennnnonennerveenstnannncovensvenonssance 16

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

No.

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Petitioner,

USX CORPORATION,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

The United Steelworkers of America, AFL-CIO-CLC,

hereby petitions for a writ of certiorari to enable this

Court to review the judgment of the United States Court

of Appeals for the Eleventh Circuit in United Steelwork-

ers of America, AFL-CO-CLC v. USX Corporation, 966

F.2d 1394 (11th Cir. 1992).

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Eleventh Circuit is reported at 966 F.2d 1394 (11th

Cir. 1992), and is reproduced as Appendix A (1la-24a).

The judgment of the Court of Appeals is reproduced as

Appendix B (25a-26a). The October 14, 1992, order of

the Court of Appeals denying the petition for rehearing

with suggestion for rehearing en banc is reproduced as

Appendix H (47a-48a).

The opinion of the United States District Court for the

Northern District of Alabama, dated March 15, 1990, is

reported at 115 Lab. Cas. 10037 (N.D. Ala. 1990), and

is reproduced as Appendix C (27a-32a). The injunction

issued by the district court, also dated March 15, 1990,

is unreported and is reproduced as Appendix D (33a-

34a). The April 3, 1990, opinion of the district court

granting defendant’s motion to alter, amend, or vacate

the court’s March 15, 1990, injunction is unreported and

is reproduced as Appendix E (35a). The district court’s

amended injunction, also dated April 3, 1990, is unre-

ported and is reproduced as Appendix F (36a-37a).

The Arbitration Award issued by the Board of Arbi-

tration on February 7, 1989, is unreported and is repro-

duced as Appendix G (38a-48a).

JURISDICTION

The opinion and judgment of the United States Court

of Appeals for the Eleventh Circuit were issued ©= July

24, 1992. A timely petition for rehearing with si ;gestion

for rehearing en banc was denied on Octene: 1.4, 1992.

This Court has jurisdiction to review this eas» pursuant

to 28 U.S.C. § 1254(1).

The United States District Court for the Northern Dis-

trict of Alabama had jurisdiction over this case under

section 301(a) of the Labor Management Relations Act

of 1947, 29 U.S.C. § 185. The Eleventh Circuit had juris-

diction of this case pursuant to 28 U.S.C. § 1292(a) (1).

1The Eleventh Circuit was uncertain whether the district court

had issued a “final decision’”—in which case the Eleventh Circuit

had jurisdiction pursuant to 28 U.S.C. § 1291—-or a preliminary

injunction—in which case the Eleventh Circuit had jurisdiction

under 28 U.S.C. § 1292(a)(1). But the court declined to resolve this

question “[s]ince jurisdiction exists under either section 1291 or

1292, and since our resolution of the merits ... makes any differ-

ences in review irrelevant.” App. 12a.

STATUTORY PROVISION INVOLVED

Section $01(a) of the Labor Management Relations

Act of 1947, 29 U.S.C. § 185(a), provides in pertinent

part:

Suits for violation of contracts between an employer

and a labor organization representing employees in

an industry affecting commerce as defined in this

chapter .. . may be brought in any district court of

the United States having jurisdiction of the parties,

without respect to the amount in controversy or with-

out regard to the citizenship of the parties.

STATEMENT OF THE CASE

Respondent USX Corporation (“USX” or “the Com-

pany”) has repeatedly violated a provision in its collec-

tive bargaining agreement with petitioner United Steel-

workers of America (“USWA” or “the Union”), requir-

ing USX to provide prior notice to the Union of the

contracting out of bargaining-unit work. A Board of

Arbitration ordered USX to cease and desist from fur-

ther violations of this provision. When USX failed to

comply with the cease-and-desist order, the Union sought

and obtained an injunction from a federal district court

directing USX to comply with that order. The Eleventh

Circuit held that the district court was without power to

issue that injunction.

The relevant details are as follows:

1. The Union is the exclusive bargaining representa-

tive of all basic steel production and maintenance em-

ployees of respondent USX at the Company’s Fairfield

Works in Jefferson County, Alabama. USX and USWA

were, at all times relevant here, parties to a collective

bargaining agreement known as the 1987 Basic Labor

Agreement (“the Agreement”), covering numerous steel

plants including the Fairfield Works.

Section 2-C of the Agreement governs the contracting

out of bargaining-unit work.’ This section jas two prin-

cipal components. First, section 2-C-A imposes strict sub-

stantive restrictions on the contracting out of work. App.

50a.* Second, and most relevant here, section 2-C-E re-

quires USX to provide the Union with prior notice that

USX has decided to contract out an item of work, unless

an emergency situation does not allow for such prior

notice. App. 55a-57a.

The purpose of the prior-notice provision of section

2-C-E, as stated in the Agreement, is to provide the Union

“a reasonable opportunity to suggest and discuss [with

USX] practical alternatives to contracting out.” App.

57a. To further that end, the parties have established at

each plant a joint Contracting Out Committee, which is

authorized to “attempt to resolve problems in connection

with the operation, application and administration of the

|contracting-out| provisions.” App. 54a. Timely advance

notice is the sine qua non of effective implementation

of the parties’ agreement on the contracting out of bar-

gaining unit work. If the Union does not receive such

notice, the Union has no opportunity to convene a meet-

ing of the Contracting Out Committee, and thus no op-

portunity to persuade the Company in advance that the

Company either is barred by the agreement from con-

tracting out the work in question, or should not contract

out that work even though it has the right to do so under

the agreement. See App. 55a-56a.

2 Section 2-C of the Agreement is reproduced as Appendix I (49a-

6la).

% Specifically, USX may not contract out any work for perform-

ance inside or outside the plant unless it demonstrates that the

work falls within certain specific and narrowly defined exceptions.

App. 50a. The main exceptions to the substantive prohibition on

the contracting out of work require USX to establish “that it is

more reasonable [based on eleven criteria specified in the contract ]

for the Company to contract out such work than to use its own

employees.” App. 50a-52a.

The Union is entitled under the Agreement to arbi-

trate the Company’s failure to provide prior notice of

contracting out. App. 56a-58a. Arbitrations are con-

ducted by a permanent Board of Arbitration jointly se-

lected by the parties. The Agreement authorizes the

Board, upon finding a violation of the notice provision,

“to fashion a remedy, at its discretion, that it deems

appropriate to the circumstances of the particular case.”

App. 57a.

2. This case arose from three grievances in which the

Union alleged that USX improperly failed to provide

prior notice of contracting out work at the Fairfield

Works facility. These grievances were taken to final and

binding arbitration before the Board of Arbitration, in

accordance with Section 2-C-E of the Agreement.

Before the Board of Arbitration, the Union pointed to

the fact, acknowledged in the Board’s opinion, that “this

is not the first time that the Board has been faced with a

failure to give notice in contracting out situations at Fair-

field Works.” App. 42a. Accordingly, the Union urged

the Board to issue a cease-and-desist order “requiring

that the Company hereafter provide notice of contracting

out.” Jd. The Board, per Chairman Alfred C. Dybeck,

found such a remedy to be appropriate in the circum-

stances presented, and thus issued the following award:

The grievances are sustained to the extent set forth

in Findings. The Company is ordered to hereafter

provide notice of contracting out as required by Sec-

tion 2-C. [App. 46a.]

In issuing this award, the Board of Arbitration em-

phasized that the Company’s compliance with the prior-

notice provision was critical under the Agreement:

The notice provisions not only afford the Union

knowledge of the contracting out but also provide the

framework within which the Parties can consider the

contractual issues that may arise under the notice.

With no notice whatsoever, no such framework

exists.... [App. 48a. ]

3. Notwithstanding the Board of Arbitration’s cease-

and-desist order, USX persisted in failures to provide

prior notice of contracting out as required by Section

2-C of the Agreement. The Union brought claims of

failure to provide prior notice to arbitration on numerous

occasions, and obtained at least nine separate rulings

from the Board finding USX in violation of the notice

provision.t In two of those rulings, the Board admonished

the Company for ignoring the Board’s prior cease-and-

desist order.®

Faced with this recidivist behavior by USX, the Union

filed an action in federal court under section 301 of the

Labor Management Relations Act (“LMRA”’), 29 U.S.C.

$ 185, seeking an order in the form of an injunction to

enforce the Board’s cease-and-desist award. On cross-

motions for summary judgment, the district court granted

the Union’s requested order, finding that

USX itself has admitted both in grievance proceed-

ings regarding actions taken after Arbitrator Dybeck

issued his [cease-and-desist] order and in its briefs

and affidavits submitted to this court that it has vio-

lated the requirements of Section 2-C. USX’s ad-

mitted failure to comply with Section 2-C in some cir-

cumstances since Arbitrator Dybeck issued his order

shows that USX has, in fact, violated Arbitrator

Dybeck’s order. [App. 3la (citations to the record

omitted) .] ° |

4 See Eleventh Circuit Record, Document No. R1-10, Adams Affi-

davit (Exhibit C at 6-7; Exhibit D at 2-3; Exhibit E at 3-4; Exhibit

F at 3; Exhibit G at 6; Exhibit H at 8; Exhibit I at 3-4; Exhibit J

at 4-5); Document No. R1-12, Davis Supplemental Affidavit (Exhibit

N at 12-18).

5 See Eleventh Circuit Record, Document No. R1-10, Adams Afii-

davit (Exhibit D at 2; Exhibit E at 3).

®The order issued by the district court essentially tracked

the language of the notice requirement of Section 2-C-E of the

In determining to issue the order, the district court

applied the test developed by the Fifth Cireuit in Oil,

Chemical & Atomic Workers v. Ethyl Corp., 644 F.2d

1044 (5th Cir. Unit A May 1981). App. 30a-32a. In

particular, the district court stated that “this Court will

require the Union to satisfy the Ethyl test before it will

issue any contempt citation pursuant to this injunction.”

App. 32a.

4. On appeal, the United States Court cf Appeals for

the Eleventh Circuit vacated the injunction. In a foot-

note at the outset of its discussion of the propriety of the

injunction, the court purported to distinguish Ethyl Corp.:

In our view, Ethyl Corp. is inapposite. The court,

there, assumed that the arbitrator’s award was legal;

here, as we explain in subpart II.A., the arbitrator’s

award is invalid. Similarly, the court in Ethyl Corp.

assumed that the union had no adequate remedy

at law; here, as we explain in subpart II.B., the rem-

edy at law is adequate. [App. 9a-10a n.13.]

Agreement. See App. 33a-34a. On April 3, 1990, the district court

amended the order, but the amendment simply conformed the lan-

guage of the order more closely to the language of section 2-C-E of

the Agreement. App. 35a-37a. As amended, the court’s order pro-

vides, in pertinent part, as follows:

Before it finally decides to contract out an item of work at

the Fairfield Works, USX will provide notice of such intention

to the Union members of the contracting out committee. Unless

the item of work is one previously identified by the parties as

a shelf item or involves day-to-day maintenance and repair work

and service, such notice will be given not less than 25 days

before the work is to be done, unless emergency situations do

not permit it. Such notice shall be in writing and shall be

sufficient to advise the Union members of the committee of the

location, type, scope, duration and timetable of the work to be

performed so that the Union members of the committee can

adequately form an opinion as to the reasons for such contract-

ing out. Such notice shall generally contain the information

set forth below. ... [App. 36a-37a (footnote and specification

of information required in notice omitted) .]

The court found that the Board of Arbitration’s cease-

and-desist order did not “draw|] its essence” from the

collective bargaining agreement and was therefore “in-

valid,” because the Agreement provides for resort to the

arbitration process rather than the federal courts as

the means for resolving all contracting-out disputes. App.

19a-20a. And, the Eleventh Circuit found that the Union

could obtain “an adequate remedy at law” for future

violations of the notice provision by reason of its right

to initiate new arbitration proceedings. App. 20a-24a.

REASONS FOR GRANTING THE WRIT

Arbitration awards directing a party to a collective

bargaining agreement that has repeatedly violated a par-

ticular provision of the agreement to cease and desist

from future violations of that provision are becoming

increasingly common. The question whether such prospec-

tive awards may be judicially enforced implicates issues

regarding the respective roles of the courts and of arbi-

trators in our system of labor arbitration that go to the

core of the federal labor policy. In the instant case, the

Eleventh Circuit has adopted an approach to this question

that is fundamentally opposed to the approach adopted by

the Fifth Cireuit in Oil, Chemical & Atomic Workers v.

Ethyl Corp., 644 F.2d 1044 (5th Cir. Unit A May 1981),

and by the First Circuit in Boston Shipping Ass’n v.

International Longshoremen’s Ass’n, 659 F.2d 1 (1st

Cir. 1981).

The Fifth and the First Circuits have determined that

the federal labor policy requires that prospective labor

arbitration awards, like other labor arbitration awards,

be judicially enforceable. These circuits have reasoned

that, in the absence of judicial enforcement, the determi-

nation of the arbitrator to issue a cease-and-desist award

would be without practical effect, and the issuance of the

award would be a futile exercise. The Fifth and First

Circuits, therefore, provide for judicial erforcement of

such awards whenever there is an indisputable violation

of the arbitrator’s cease-and-desist order.

The Eleventh Circuit, on the other hand, has deter-

mined that the federal labor policy mandates the opposite

conclusion: viz., that prospective arbitration awards are

not judicially enforceable. The court below reasoned that

judicia] enforcement of an arbitrator’s cease-and-desist

award would effect a judicial usurpation of the arbitra-

tor’s role by allowing a party to a collective bargaining

agreement to bring disputes under the agreement to a

court rather than to an arbitrator.

Not surprisingly, these diametrically opposed under-

standings of the federal labor policy lead to irreconcilable

results. The order of the district court in the instant

case, which was vacated by the Eleventh Circuit, was

carefully and explicitly tailored to meet the standard in

Ethyl Corp.; that order would most certainly have

been upheld under the terms of the rule adopted in the

Fifth and First Circuits.

This absence of uniformity is the very outcome Con-

gress sought to avoid in enacting section 301 of the LMRA.

Section 301 is “a congressional mandate to the federal

courts to fashion a body of federal common law to be

used to address disputes arising out of labor contracts.”

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209 (1985).

It follows that the “interests in interpretive uniformity

and predictability that require that labor-contract dis-

putes be resolved by reference to federal law also require

that the meaning given to a contract phrase or term be

subject to uniform federal interpretation.” Jd. at 211.

The circuit conflict we detail here defeats those statutory

interests.

A. In Ethyl Corp., the Fifth Circuit considered in depth

the dilemma posed by the issue of the judicial enforce-

ability of cease-and-desist orders in labor arbitration

awards. That discussion serves to frame the issue pre-

sented by this petition.

On the one hand, the Ethyl Corp. court recognized that

a federal court’s refusal to issue an injunction requiring

compliance with an arbitrator’s cease-and-desist order

would “convert the previous arbitration in this case—

and, perhaps, the process of arbitration in general—into

a futile and meaningless charade.” 644 F.2d at 1048.

Absent such an injunction, a recidivist employer or union

could continue to violate the collective bargaining agree-

ment even in the face of an arbitrator’s cease-and-

desist order, and in so doing compel the other party

to initiate a new arbitration—with its attendant burdens

and costs—on the occasion of each such violation. Id. at

1049 & n.8. As the court explained:

|The] cycle is as vicious as it is endless; by both its

viciousness and its endlessness, the cycle presents a

grave threat to the survival of the process of labor arbi-

tration. [/d. at 1049 (internal quotations omitted) .]

On the other hand, the Ethyl Corp. court understood

that a federal court injunction requiring compliance with

an arbitrator’s cease-and-desist order could, in certain

circumstances, have the perverse result of “usurping the

role of the arbitrator.” Jd. at 1049. This usurpation

could occur, for example, in circumstances where the con-

tractual provision addressed by the arbitrator’s cease-and-

desist order is subject to agreed-upon exceptions.” In such

circumstances, a court could grant and enforce an injunc-

tion only after determining that the conduct alleged to be

in violation of the arbitrator’s cease-and-desist order did

not fall within any of the contractual exceptions—a deter-

mination that should ordinarily be made by an arbitrator

and not a federal court. 644 F.2d at 1049. This displace-

7In Ethyl Corp., for instance, the collective bargaining agreement

prohibited the placement of supervisors in hourly-rated jobs except

as necessary to preserve plant safety, provide instruction to the

employees, or conduct research and development. Jd. Here, simi-

larly, USX is required by the collective bargaining agreement to

provide prior notice of contracting out in all circumstances except

bona fide emergencies. See supra, p. 4.

ment of the arbitrator by the federal court would “‘pre-

sent|}] a grave threat to the survival of the process of

l»bor arbitration.” Id.

To avoid either rendering an arbitrator’s cease-and-

desist order “a futile and meaningless charade,” or

“ysurping the role of the arbitrator,” the Fifth Circuit

in Ethyl Corp. “devis{ed] a format for judicial inter-

vention which w[ould] best accommodate these compet-

ing interests.” Id. at 1050. Thus, Ethyl Corp. states the

following test: to obtain and enforce an injunction requir-

ing compliance with an arbitrator’s cease-and-desist

order, the plaintiff must establish “that the current con-

duct inarguebly falls within the prohibition that was the

subject of the previous arbitration award.” Jd. at 1052

(emphasis added). As the Fifth Circuit noted, “this new

course best preserves the integrity of the labor arbitra-

tion process and fosters the time-tested wisdom of the

Supreme Court’s Steelworker’s trilogy.” Jd. at 1055."

B. In Boston Shipping, the First Circuit adopted and

followed the Ethyl Corp. rule. After setting forth in de-

tail the facts, the reasoning, and the holding of Ethy!

Corp., the court in Boston Shipping stated:

We think this analysis is instructive in the similar

situation presented here. Unlike the award in the

[Ethyl Corp.] case, the present award was not ex-

pressly directed at future “like” violations. But, be-

cause the subject of the award was not a discrete his-

torical incident but rather the definition of a physical

location, it need not have been so directed; the award

was inherently prospective. .. . The issue, then, to

reformulate the union’s position, is whether the prior

8 The Steelworkers trilogy is United Steelworkers of America v.

American Mfg. Co., 363 U.S. 564 (1960); United Steelworkers of

America v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960) ;

United Steelworkers of America v. Enterprise Wheel & Car Corp.,

363 U.S. 593 (1960). These cases set forth the basic elements of

the federal labor policy favoring arbitration.

award may be enforced [by a federal court] in a fu-

ture situation with a_ single perhaps arguable

difference—a new collective bargaining agreement.

We think so. [659 F.2d at 4.]

The First Circuit reaffirmed Boston Shipping in Der-

win v. General Dynamics Corp., 719 F.2d 484 (1st Cir.

1983). Citing both Boston Shipping and Ethyl Corp., the

First Circuit summarized the legal standard for judicial

enforcement of prospective arbitration awards as follows:

Only where an arbitral award is both clearly intended

to have a prospective effect and there is no colorable

basis for denying the applicability of the existing

award to a dispute at hand, will a court order com-

pliance with the award rather than require the par-

ties to proceed anew through the contract grievance

procedure. [719 F.2d at 491.] ®

® The Sixth and Second Circuits have, in dicta, cited approvingly

to the approach followed by the Fifth and First Circuits in Ethyl

Corp. and Boston Shipping. See United Paperworkers v. Georgia

Pacific Corp., 798 F.2d 172, 173-74 (6th Cir. 1986) (noting that

the Fifth Circuit in Ethyl Corp. “has clarified the judicial role”

in enforcing prospective arbitration awards, and that the First Cir-

cuit in Boston Shipping has made clear that the propriety of such

judicial enforcement “does not depend upon express language in the

award itself”) ; International Chemical Workers Local 227 v. BASF

Wyandotte Corp., 774 F.2d 43, 46 (2d Cir. 1985) (“As the Court of

Appeals for the First Circuit has stated, ‘unless it is beyond argu-

ment that there is no material factual difference between the new

dispute and the one decided in the prior arbitration that would

justify an arbitrator’s reaching a different conclusion, the case must

go to fresh arbitration rather than to the court for judicial enforce-

ment.’”’) (quoting Derwin, supra, and citing Ethyl Corp.).

And the Seventh Circuit, also in dictum, has embraced an approach

to the issue that is substantially similar to that of the Fifth

and First Circuits, without expressly agreeing or disagreeing with

the “inarguable violation” test adopted by those circuits. See United

Mine Workers Local 1545 v. Inland Steel Coal Co., 876 F.2d 1288,

1295 (7th Cir. 1989) (judicial enforcement of prospective labor

arbitration awards is appropriate only where the facts of the arbitra-

tion awards are “ ‘substantially identical’ to the facts in the other

C. In contrast to the decisions of the Fifth and First

Circuits, the decision below is predicated on an under-

standing that the federal labor policy in favor of arbitra-

tion precludes a federal court from enforcing an arbitra-

tor’s cease-and-desist order where—as is generally the case

with respect to collective bargaining agreements, and as

was the case in Ethyl Corp. and Boston Shipping—the

parties to a labor contract have agreed to submit disputes

over violations of that contract to final and binding arbi-

tration. According to the court below, permitting judicial

enforcement of an arbitral order of this type is inappro-

priate because doing so would give “the union the option

of substituting the federal courtroom for the arbitrator’s

hearing room as the forum for resolving [such] disputes.”’

App. 12a-13a."

This conclusion and the rationale by which it is reached

cannot be reconciled with the conclusion and the ra-

tionale of Ethyl Corp. and Boston Shipping. The Elev-

enth Circuit’s efforts to distinguish Ethyl Corp. are not

based on any factual differences between the two cases,

but are a reflection of the different judgments the courts

involved have made about the lessons to be drawn from

the federal labor policy for the issue whether prospective

arbitration awards may be judicially enforced.

grievances not yet submitted to arbitration,” and the contracting

party against whom enforcement is sought has engaged in conduct

that “ ‘constitutes wilful and persistent disregard of the arbitration

awards.’ ”’) (quoting United Electrical Workers of America v. Honey-

well, Inc., 522 F.2d 1221, 1227 (7th Cir. 1975) ).

10 See aiso App. 14a (“the district court’s injunction will effectively

abolish arbitration as the mechanism for resolving future contract-

ing-out disputes”); App. 19a (“what the [district] court has done

fin enforcing the arbitrator’s cease-and-desist order] ... is give

the Union the option of going to arbitration or going to court’) ;

App. 20a (“The arbitrator’s award . . . as interpreted, and enforced,

by the district court, gives the Union the right to ignore the Com-

pany’s demand for arbitration and to sue for injunctive relief.’’).

To be sure, the court below asserted that here, unlike in

Ethyl Corp., the arbitrator’s award is “invalid,” App. 9a-

10a n.13, because the award does not “draw its essence”

from the Agreement. See App. 19a-20a. But, on inspec-

tion, that assertion is erroneous as a matter of law and

cannot serve as the basis for distinguishing Ethyl Corp.

The arbitration award here does no more than direct

the Company to comply with the express terms of the

Agreement: USX is “to hereafter provide notice of con-

tracting out as required by Section 2-C” of the collective

bargaining agreement. See supra, p. 5. And, there can

be no question as to the Board of Arbitration’s authority

to issue such an award: the Agreement empowers the

Board “to fashion a remedy, at its discretion, that it

deems appropriate to the circumstances of the particular

case.” Jd. It is not surprising that the Company con-

ceded in the courts below that the arbitration award

here ‘‘draws its essence” from the Agreement."

In reaching the opposite conclusion, the court below

relied entirely on what it perceived to be the inherent in-

consistency between the grievance-arbitration provision of

the contract, which permits “both parties to demand, and

obtain, the arbitration of contracting-out disputes,” App.

20a, and the Board of Arbitration’s cease-and-desist

award, which, if enforced by a court, would “give[] the

Union the option of going to arbitration or going to court.”

App. 19a. That perception, however, does not serve to dis-

tinguish this case from Ethyl Corp. To the contrary, that

perception serves only to reveal the conflict that in

fact exists between the approach of the court below and the

11Tn its complaint, the Union alleged that the arbitration award

“draws its essence from the collective bargaining agreement and

is a final, binding and valid award.” Eleventh Circuit Record, Docu-

ment No. R1-1, at 4 § 12. That allegation was admitted by the

Company in its answer to the complaint. Document No. R1-2, at 2

{ 12. That allegation was likewise admitted by the Company in its

brief to the Eleventh Circuit. See Brief of Appellant USX Corpo-

ration in Case No. 90-7313, at 3 (“the Company accepts [the arbi-

trator’s award] as final and binding’’).

approach of the Fifth Circuit in Ethyl Corp. By defini-

tion, the latter court found no inherent contradiction

between a final and binding arbitration clause and court

enforcement of an arbitrator’s cease-and-desist award.”

The Eleventh Circuit’s additional assertion that the

Union here had an “adequate remedy at law’—viz., a

backpay remedy through the arbitration process, see

App. 10a n.13, 20a-24a—again does not serve to distin-

guish this case from Ethyl Corp. Indeed, Ethyl Corp.

held directly to the contrary on this point. Ethyl Corp.

found that repeated invocation of the arbitral process is

not an adequate remedy where, as here, one party to the

labor agreement repeatedly and persistently violates the

agreement and flouts an arbitrator’s order to cease and

desist from further violations. See Ethyl Corp., supra,

644 F.2d at 1049 (requiring repeated arbitrations under

such circumstances would create an “endless” and “vi-

cious” cycle that “presents a grave threat to the survival

of the process of labor arbitration”). Again, rather than

provide the basis for distinguishing Ethyl Corp., this

point highlights the conflict in approach between the two

cases.

12J—n this respect, the decision below is also in conflict with

the numerous decisions of this Court holding that labor arbitration

awards are entitled to great deference from the courts, particularly

with regard to the arbitrator’s selection of remedies. This Court

has repeatedly held that ‘where it is contemplated that the arbitrator

will determine remedies for contract violations that he finds, courts

have no authority to disagree with his honest judgment in that

respect.” United Paperworkers v. Misco, 484 U.S. 29, 38 (1987).

See also e.g., United Steelworkers v. Enterprise Wheel, supra, 363

U.S. at 597:

When an arbitrator is commissioned to interpret and apply the

collective bargaining agreement, he is to bring his informed

judgment to bear in order to reach a fair solution of the prob-

lem. This is especially true when it comes to formulating rem-

edies. There the need is for flexibility in meeting a wide variety

of situations. The draftsmen may never have thought of what

specific remedy should be awarded to meet a particular con-

tingency.

Il.

The issue of the proper scope of a federal court’s

power in an action under section 301 of the LMRA to

enforce a cease-and-desist order in a labor arbitration

award is a recurring one on which, as we have shown,

the circuit courts are in conflict. Because such arbitral

cease-and-desist orders are becoming increasingly com-

mon, see Elkouri & Elkouri, How Arbitration Works 291

& n.298 (4th ed. 1985), the resolution of this conflict is

of considerable practical importance.

Uncertainty in the law as to this issue results in in-

stability in the processes for enforcing and fer negotiat-

ing collective bargaining agreements. It is common for

unions to negotiate nationwide contracts that cover all

of an employer’s facilities throughout the country or a

number of different employers’ facilities throughout the

country, or simply to negotiate different contracts con-

taining standard provisions with employers in various

sections of the country. For example, the contracting-out

provision at issue here (or a close variant of that pro-

vision) is applicable in numerous plants of numerous

employers across the country. Unless the conflict between

the circuits described herein is resolved, arbitral cease-

and-desist orders covering certain plants will be enforced

by courts, and the same or identical orders covering other

plants will not be so enforced.

Such a situation is precisely what Congress intended to

avoid by enacting section 301. That section, as we stated

at the outset, stands as a “congressional mandate to the

federal courts to fashion a body of federal common iaw

to be used to address disputes arising out of labor con-

tracts.” Allis-Chalmers Corp. v. Lueck, supra, 471 U.S.

at 209. The conflict among the circuits on the issue

presented here is inimical to the statutory interest in

uniformity.

17 |

CONCLUSION

For the foregoing reasons, the petition for certiorari

should be granted.

Respectfully submitted,

CARL B. FRANKEL ROBERT M. WEINBERG

RUDOLPH L. MILASICH, JR. (Counsel of Record) |

Five Gateway Center VIRGINIA A. SEITZ

Pittsburgh, PA 15222 MARTIN S. LEDERMAN |

ANDREW D. ROTH

BREDHOFF & KAISER

1000 Connecticut Avenue, N.W.

JoE R. WHATLEY, JR.

CooPER, MITCH, CRAWFORD,

KUYKENDALL & WHATLEY

506 20th Street North Washington, D.C. 20036

1100 Financial Center

3irmingham, AL 35203

(202) 833-9340

APPENDICES

arenes

fo EERO OES

ees

APPENDIX A

UNITED STATES COURT OF APPEALS

KLEVENTH CIRCUIT

No. 90-7313

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff-Appellee,

USX CORPORATION,

Defendant-A ppellant.

Appeal from the United States District Court

for the Northern District of Alabama

July 24, 1992

Michael L. Lucas, Burr & Forman, Birmingham, Ala.,

S.G. Clark, Law Dept., USX Corp., Pittsburgh, Pa., for

defendant-appellant.

Jerome A. Cooper, Joe R. Whatley, Jr., Cooper, Mitch,

Crawford, Kuykendall & Whatley, Birmingham, Ala.,

Carl B. Frankel, Rudolph L. Milasich, Jr., Legal Dept.,

United Steelworkers, Pittsburgh, Pa., for plaintiff-

appellee.

Before TJOFLAT, Chief Judge, DUBINA, Circuit

Judge, and PECK *, Senior Circuit Judge.

* Honorable John W. Peck, Senior US. Circuit Judge for the

Sixth Circuit, sitting by designation.

TJOFLAT, Chief Judge:

This appeal is from an injunctive order enforcing an

arbitration award entered under a collective bargaining

agreement. The award, and therefore the injunction, di-

rects the employer to comply with the provision of the

collective bargaining agreement that requires the em-

ployer to notify the union before contracting out work

to be performed in the employer’s shop. We vacate the

injunction because the award it enforces is not “drawn

from the essence” of the labor contract as required by

law, see United Steelworkers v. Enterprise Wheel & Car

Corp., 363 U.S. 598, 597, 80 S.Ct. 1858, 13861, 4 L.Ed.2d

1424 (1960), and, alternatively, because an adequate

remedy exists at law.

The employer in this case, USX Corporation (USX

or the Company), is a manufacturer of steel products.

The union, United Steelworkers of America (the Union),

is a labor organization that represents employees in the

steel industry. On February 1, 1987, USX and the Union

entered into a collective bargaining agreement (the labor

agreement or the agreement) that governs USX’s em-

ployment of production and maintenance workers at the

Company’s steel-manufacturing and by-product coke

facilities.’

The labor agreement requires USX to employ the

Union’s members in the performance of the Company’s

production and maintenance work at these facilities;

this ban does not apply, however, to maintenance work

1 The collective bargaining agreement defines “employees” as

all individuals occupying production [and] maintenance . . . jobs

employed in and about the Company’s steel-manufacturing and

by-product coke plants for which units the Union is, or may be

during the life of this Agreement, certified by the National

Labor Relations Board as the exclusive collective-bargaining

representative.

a ele a at aR

Itt in tat i Ait iS Wick Ph ws 8

that, prior to March 1, 1988, USX had, as a “consistent

practice,” contracted out.2 When USX decides to let a

contract for the performance of work at a covered fa-

cility, the Company must provide the Union with notice

of the work unless an emergency situation exists, in

which case the Company is exempt from providing prior

notice.’ The purpose of the notice is to give the Union

an opportunity to determine whether the noticed con-

tract is for production and maintenance work that the

Union’s members should perform. If the Union concludes

that the proposed contract calls for such work, it may

object and, if the matter is not resolved to its satisfac-

tion, file a grievance and invoke the agreement’s expe-

dited grievance procedure.* Under that procedure, if the

* Under the labor agreement, the production and maintenance

work does not include the following: (1) production and mainte-

nance work contracted out with the Union’s consent: (2) major

construction projects; and (3) the acquisition of “parts and sup-

plies.”

3 Paragraph E of section 2-C of the labor agreement provides in

pertinent part:

E. Notice and Information

Before the Company finally decides to contract out an item

of work, the Union . . . will be notified... . [S]uch notice will be

given in sufficient time to permit the Union to invoke the Expe-

dited Procedure described in paragraph G below [see infra note

4], unless emergency situations do not permit it. Such notice

shall be in writing and shall be sufficient te advise the Union

. of the location, type, scope, duration and timetable of the

work to be performed so that the Union .. . ean adequately

form an opinion as to the reasons for such contracting out.

(Emphasis added.)

* Paragraph G of section 2-C of the labor agreement provides in

pertinent part:

G. Expedited Procedure

In the event that either the Union or Company ... request(s]

an expedited resolution of a grievance arising under this sec-

tion .. ., it shall be submitted to the Expedited Procedure in

accordance with the following:

parties cannot settle the dispute within five days, either

side may demand arbitration.

To compensate Union members for wages lost when

USX contracts out production and maintenance work

(that presumably should be performed by Union men:-

bers) without notifying the Union, the labor agreement

authorizes the arbitrator® to fashion any remedy “ap-

propriate to the circumstances of the particular case...

includ{ing the award of] earnings and benefits to the

1. In all cases except those involving day-to-day maintenance

and repair work and service, or emergencies, the Expedited

Procedure shall be implemented prior to letting a binding

contract.

Unless the parties agree otherwise, within five (5) days

(excluding Saturdays, Sundays and Holidays) after the filing

of a grievance, if either the Union or Company determines

that the grievance cannot be resolved, either party ... may

advise the other party in writing that it is invoking arbi-

tration under this Expedited Procedure and shall notify the

Board [of Arbitration]. The party invoking arbitration

shall include with its written notice a summary of the facts

and arguments relied upon. Within five (5) days (exclud-

ing Saturdays, Sundays and Holidays) following receipt of

such notice the responding party shall provide the moving

party with a written summary of the facts and arguments

that it relies upon.

3. An expedited arbitration must be scheduled within five (5)

days (excluding Saturdays, Sundays and Holidays) of such

notice to the Board [of Arbitration] and heard at a hearing

commencing within ten (10) days (excluding Saturdays,

Sundays and Holidays) thereafter. The Board, or its ap-

pointee, shall hear the dispute.

4. The Board must render a decision within five (5) days

(excluding Saturdays, Sundays and Holidays) of the con-

clusion of the hearing, which decision need only succinctly

explain the basis for the findings.

5 The arbitrator is the Board of Arbitration. We sometimes use

the term arbitrator in referring to the Board, its chairperson, or

members.

grievants who would have performed the work... .”°

The sums USX might have to pay if it breaches its duty

to notify could be substantial. First, USX must pay the

contractor hired to do the work. Second, it may have

to pay Union employees the wages they would have

earned if permitted to do the work. Third, it may have

to pay the expenses incurred by the Union in prosecut-

ing its members’ grievances. Finally, the arbitrator has

discretionary authority to impose additional sanctions

“appropriate to the circumstances of the particular

case’; we need not speculate, however, as to what such

additional sanctions might be.

The incident leading to the arbitration award the

district court enforced in this case began in early Sep-

tember 1988, at USX’s Fairfield Works, located in Bir-

mignham, Alabama. A _ blast furnace—which recently

had been the subject of a major rebuilding project—

malfunctioned, causing “gummy slag,” a molten debris

that is a byproduct of the smelting process, to run out

of the furnace. Because this gummy slag threatened

to “freeze up” the furnace, workers were needed immedi-

ately to repair and clean-up the furnace and its “run-

ners,” i.e., channels through which molten debris travels.

* The “Notice” prevision contained in paragraph E of section 2-C

of the labor agreement provides, in pertinent part:

Should it be found in the arbitration of a grievance alleging a

failure of the Company to provide the notice .. . required

under this paragraph . . . that such notice . . . was not provided,

that the failure was not due to an emergency requirement, and

that such failure deprived the Union of a reasonable opportunity

to suggest and discuss practical alternatives to contracting out,

the Board [of Arbitration] shall have the authority to fashion

a remedy, at its discretion, that it deems appropriate to the

circumstances of the particular case. Such remedy, if afforded,

may include earnings and benefits to the grievants who would

have performed the work, if they can be reasonably identified,

(Emphasis added.)

On September 11, USX, without notifying the Union,

directed a contractor to perform the needed repair and

clean-up work. By September 17, the furnace was fully

operational; a number of the contractor’s workers re-

mained on the site after this date, however, performing

clean-up work. The Union, on September 21, filed three

grievances challenging the use of outside labor on the

repair and clean-up work. The Union interpreted the

Company’s use of outside workers as a violation of the

agreement’s ban on contracting out production and main-

tenance work. When the parties failed to resolve the

grievances, USX invoked arbitration.

On January 25, 1989, an arbitrator convened a hear-

ing.’ The Union, to demonstrate that the contracted-out

work constituted production and mainenance work for

which notice should have been given, produced evidence

that, in the past, similar spills had been cleaned up by

Union laborers. USX, characterizing most of the dis-

puted repair work as part of the rebuilding of the blast

furnace, as opposed to production and maintenance work,

defended its use of outside labor as permissible under

the agreement.* USX also cited the emergency nature

of the gummy slag runout as exempting the Company

from the notice requirement.”

On February 7, 1989, the arbitrator sustained the

Union’s grievances and issued an award. In his opinion

accompanying the award," the arbitrator found that al-

7 USX and the Union have developed their own rules of procedure

for arbitration of disputes. All Board decisions are subject to ap-

proval by the Board’s Chairman. The Chairman conducted the

January 25, 1989, hearing mentioned in the text.

* USX treated the work as a “major construction project,” which

could be contracted out. See supra note 2.

® See supra note 3.

10 The arbitration award contains three sections entitled “Back-

ground,” “Findings,” and “Award.” The “Award” section, sets

forth the relief granted. The “Background” section contains a brief

AANA one a

» 7a

though an emergency excused USX from notifying the

Union when the runout began, the emergency soon abated

and USX should have notified the Union of the work it

planned to contract out. The arbitrator had insufficient

evidence, however, to determine whether any Union mem-

bers should be compensated for lost wages; accordingly,

he left the issue with the parties, granting them leave

to return to arbitration if they could not reach a settle-

ment.'' (The parties subsequently agreed upon an appro-

priate remedy.) The arbitrator imposed no fine, nor did

he give the Union the expenses it incurred in prosecuting

its grievance. Apparently, USX’s conduct did not war-

rant such relief. He did, however, order USX ‘to here-

after provide notice of contracting out as required by

Section 2-C” of the labor agreement.

The Union contends that USX has ignored the arbi-

trator’s admonition to comply with section 2-C of the

labor agreement and has been contracting out work that

description of the facts of the dispute. The “Findings” section con-

tains the arbitrator’s interpretation of the labor agreement as it

applies to the facts of the case. To avoid confusion between the

“arbitration award” as a whole and the “Award” section, we refer

to the former as the opinion of the arbitrator and to the latter as

the award. )

11 Although the arbitrator did not explicitly state that he would

determine the damages figure if the parties could not, he implied

as much in his stated reason for sending the issue back to the

parties; he did not think that enough evidence had been presented

to allow him to assess a damages figure. As he explained in his

opinion:

There remains the matter of whether a monetary remedy is

appropriate in this case. The evidence seems clear that all

available employees were fully employed at the time and work-

ing some overtime. Although some overtime figures were sub-

mitted in evidence they were not complete. Thus, the matter

of remedy will be returned to the Parties to review the avail-

ability of employees to have performed the work assigned to

the contractor.

should be performed in the plant by Union members. To

stop this practice, the Union brought this suit in the

United States District Court for the Northern District

of Alabama; invoking section 301 of the Labor-Manage-

ment Relations Act of 1947, 29 U.S.C. § 185 (1988)

(the LMRA),” the Union asked the district court to

enforce the arbitrator’s award—that is, to enjoin USX,

in the words of the arbitrator, “to hereafter provide

notice of contracting-out as required by Section 2-C” of

the labor agreement. The Union also sought money dam-

ages for the wages its members would have earned had

they been permitted to perform certain contracted out

work occurring after the arbitration award. USX an-

swered the Union’s complaint, denying the Union’s alle-

12 Section 301 of the LMRA, 29 U.S.C. §$ 185 provides, in relevant

parts:

(a) Venue, amount, and citizenship

Suits for violation of contracts between an emplover and a

labor organization representing employees in an industry affect-

ing commerce ... may be brought in any district court of the

United States having jurisdiction of the parties, without re-

spect to the amount in controversy or without regard to the

citizenship of the parties.

(ec) Jurisdiction

For the purposes of actions and proceedings by or against

labor organizations in the district courts of the United States,

district courts shall be deemed to have jurisdiction of a labor

organization (1) in the district in which such organization

maintains its principal office, or (2) in any district in which

its duly authorized officers or agents are engaged in repre-

senting or acting for employee members.

The complaint also alleged jurisdiction under 28 U.S.C. § 133

(1988), which provides district courts of the United States with

original jurisdiction over civil actions “arising under the Constitu-

tion, laws, or treaties of the United States/,]” and 28 U.S.C.

§ 1337(a) (1988), which provides district courts of the United States

with original jurisdiction over civil actions or proceedings “arising

under any Act of Congress regulating commerce or protecting trade

and commerce against restraints and monopolies.’

gations and contesting its right to any relief. Thereaf-

ter, both parties moved for summary judgment.

In support of its motion, the Union argued that it was

entitled to an injunction as a matter of law because

USX had demonstrated an unwillingness to abide by

section 2-C of the labor agreement; the Union’s motion

did not address its damages claim. USX, in turn, argued

on several grounds that the court should deny the in-

junction and dismiss the case. First, the Union had met

none of the traditional prerequisites for injunctive re-

lief: for example, the Union failed to show that its

legal remedy was inadequate, or that it needed an in-

junction to avoid irreparable harm. Second, the Union

had not satisfied the other requirements for an injunc-

tion laid down by the Norris-LaGuardia Act, ch. 90,

$7, 47 Stat. 71, 29 U.S.C. §107 (1988). Lastly, USX

argued that the granting of an injunction or money

damages would in effect eliminate arbitration as the

mechanism chosen by the parties to resolve contracting-

out disputes and thus would rewrite their labor agree-

ment.

On March 15, 1990, the district court entered an order

granting the Union’s motion for summary judgment and

the injunctive relief it had requested, denied USX’s mo-

tion in which it had asked that the complaint be dis-

missed, and taxed costs against USX. The court found,

from the affidavits and other exhibits submitted by the

parties, that USX had been disregarding the arbitrator’s

order to give the Union notice of contracting out in

accordance with section 2-C of the labor agreement; the

court observed that USX had not given notice, as re-

quired, “100% of the time.’ '* The court thus rejected

13Tn the opinion accompanying its order granting the Union in-

junctive relief, the district court cited Oil, Chemical & Atomic Work-

ers International Union v. Ethyl Corp., 644 F.2d 1044 (5th Cir.

1981), as supporting the action the court took. In our view, Ethyl

Corp. is inapposite. The court, there, assumed that the arbitrator’s

10a

the Company’s argument that arbitration provided the

Union and its members adequate relief and that an in-

junction was not needed to protect their rights under the

agreement. As for USX’s argument that the Union had

not satisfied the requirements of the Norris-LaGuardia

Act, the court, citing Textile Workers Union v. Lincoln

Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957),

held that these requirements were of no moment; the

Act simply did not apply in the circumstances at hand.

After the March 15 order was entered, USX moved

the court, pursuant to Fed.R.Civ.P. 59(e),’* to alter,

amend, or vacate the March 15 order, or, in the alterna-

tive, to modify certain language in the order. On April

3, 1990, the court granted USX the alternative relief it

requested, and modified its injunctive order to read as

follows:

Before it finally decides to contract out an item

of work at the Fairfield Works, USX will provide

notice of such intention to the Union. ... Unless

the item of work .. . involves day-to-day mainte-

nance and repair work and service, such notice will

be given not less than 25 days before the work is to

be done, unless emergency situations do not permit

it. Such notice shall be in writing and shall be suffi-

cient to advise the Union .. . of the location, type,

scope, duration and timetable of the work to be

performed so that the Union . . . can adequately

form an opinion as to the reasons for such contract-

ing out. Such notice shall generally contain the in-

formation set forth below:

award was legal; here, as we explain in subpart IJ.A., the arbitra-

tor’s award is invalid. Similarly, the court in Ethyl Corp. assumed

that the union had no adequate remedy at law; here, as we explain

in subpart II.B., the remedy at law is adequate.

14 Fed.R.Civ.P. 59(e) states that ““A motion to alter or amend the

judgment shall be served not later than 10 days after entry of the

judgment.”

Cas ha Ral

lla

1. Location of work

2. Type of work:

a. Service

b. Maintenance

ce. Major Rebuilds

d. New Construction

3. Detailed description of the work

4. Crafts or occupations involved

5. Estimated duration of work

6. Anticipated utilization of bargaining unit

forces during the period

—~]

Effect on operations if work not completed

in timely fashion.

(Emphasis added. )”°

The appeal now before us is from the district court’s

order of April 3, 1990, amending its injunctive order of

March 15, 1990.'° The parties, in their briefs, state

that we have jurisdiction pursuant to 28 U.S.C. § 1291

(1988), to review a “final decision” of the district

court." As noted, the Union moved for, and the court

granted relief on, only the Union’s claim for injunctive

relief, while USX’s summary judgment motion, which

addressed both the injunction and damages claims, was

denied. Furthermore, while the court taxed costs against

USX, no entry of judgment appears in the record. The

—

15 The April 3 order simply added the emphasized text.

16Tn its notice of appeal, USX states that it is appealing from

both the order of March 15, 1990, and the order of April 3, 1999.

1798 U.S.C. § 1291 (1988) provides:

The courts of appeals ... shall have jurisdiction of appeals

from all final decisions of the district courts of the United

States ..., except where direct review may be had in the Su-

preme Court.

12a

record reveals no other disposition of the Union’s dam-

ages claim, suggesting that a “final decision” may not

have been reached in the court below.

It is possible that the Union abandoned the damages

claim. If so, the court’s March 15 order, as amended,

“clearly evidences its intent that the . . . order repre-

sent!s] the final decision in the case” necessary for juris-

diction under section 1291. Bankers Trust Co. v. Mallis,

435 U.S. 381, 387, 98 S.Ct. 1117, 1121, 55 L.Ed.2d 357

(1978). Alternatively, the parties may have left the

matter of damages for a later day. If such is the case,

the court granted a preliminary injunction reviewable

under 28 U.S.C. § 1292(a) (1) (1988),’8 and subject to

less stringent procedural hurdles than those for a per-

manent injunction reviewable under section 1291. See

11 Charles A. Wright & Arthur R. Miller, Federal Prac-

tice & Procedure, § 2941, at 361 (1973).

Since jurisdiction exists under either section 1291 or

1292, and since our resolution of the merits in part II,

infra, makes any differences in review irrelevant, it is

not necessary to address whether a final decision was

reached.

II.

As noted, after finding for the Union on its grievances,

the arbitrator, in his award, ordered the Union “to here-

after provide notice of contracting out as required by

Section 2-C” of the labor agreement.’® In enforcing this

18 28 U.S.C. § 1292(a)(1) (1988) creates jurisdiction from:

Interlocutory orders of the district courts . .. granting, con-

tinuing, modifying, refusing or dissolving injunctions, or refus-

ing to dissolve or modify injunctions. .. .

19 As noted in the text supra, p. 1395, the labor agreement covers

only specific types of work. The district court’s injunction, however,

if taken literaily, expands the labor agreement’s coverage to include

any “item of work at the Fairfield Works.” We assume that the

court did not intend to reach such additional work and that, if

RY) EAE mM es aos Mic

13a

aspect of the award, the district court, in effect, gave the

Union the option of substituting the federal courtroom

for the arbitrator’s hearing room as the forum for re-

solving contracting-out disputes. The labor agreement,

however, does not give the Union this option; rather, the

agreement forecloses federal forums by mandating the

arbitration of all contracting-out disputes. We conclude,

in subpart A, that even if the arbitrator intended that

his award rewrite the parties’ agreement in this fashion,

the award is illegal and unenforceable, for it has not

been “drawn from the essence” of the labor agreement.

See Enterprise Wheel & Car Corp., 363 U.S. at 597, 80

S.Ct. at 1361. Accordingly, the district court’s injunc-

tion cannot stand.

The court’s injunction must be set aside for another,

independent reason as well. As we explain in subpart

B, the prerequisites for injunctive relief are not present

in this case; indeed, the principles of equity preclude

such relief.*°

called upon to enforce its injunction, would restrict the injunction

to conform with the agreement.

The injunction, while tracking for the most part the language of

section 2-C, made one significant change. The labor agreement re-

quires the Company to notify the Union of contracting-out “in suffi-

cient time to permit the Union to invoke the Expedited [Grievance]

Procedure, unless emergency situations do not permit it.” The in-

junction, however, requires that such notice be given “not less than

25 days before the work is to be done.” Given our disposition of

the case, we do not consider the propriety of this change.

20On appeal, USX contends that the district court disregarded

section 7 of the Norris-LaGuardia Act, 47 Stat. 71, 29 U.S.C. § 107

(1988) by, among other things, entering the injunction on summary

judgment. Given the grounds on which we dispose of this appeal,

we find it unnecessary to consider whether the Norris-LaGuardia

Act barred the entry of the injunction on summary judgment and,

if not, whether the presence of genuine issues of material fact did

so.

14a

That the district court’s injunction will effectively

abolish arbitration as the mechanism for resolving future

contracting-out disputes becomes clear when one considers

what will transpire the next time the Union claims that

the Company has let a contract for production and main-

tenance work without notice, in violation of section 2-C.

Posit a situation in which, as here, USX hires a con-

tractor to do clean-up work after a blast furnace mal-

functions. USX believes that an emergency exists and

therefore does not immediately notify the Union that it

has let the contract.*! In time, the Union discovers the

contractor’s employees on the job, or receives notice

thereof, and, believing that USX has violated the district

court’s injunction, moves the court to issue an order

requiring the Company to show cause why it should not

be held in contempt and sanctioned.2*? The Union’s mo-

tion, the allegations of which the court accepts as true,

demonstrates a violation of the injunction; hence, the

court issues a show cause order and sets a hearing.

At the hearing, the Union’s evidence establishes that

USX let a contract for production and maintenance

“favork without notifying the Union as required by the

labor agreement, and the court, rejecting USX’s argu-

ment that the situation constituted an emergency requir-

ing no notice, holds the Company in contempt. At this

point, what sanction could the court impose? What rem-

edy could the court fashion to make the Union and its

members whole?

21 As noted, under the district court’s injunctive order, as in sec-

tion 2-C of the labor agreement, USX need not give the Union

advance notice when “emergency situations do not permit it.” See

supra note 3.

22 The Union takes this action because a civil contempt proceeding

is the only lawful means available for enforcing an injunction. See

Mercer v. Mitchell, 908 F.2d 763, 769 n.10, 770-71 (11th Cir. 1990) ;

Blalock v. United States, 844 F.2d 1546, 1558-60 (11th Cir. 1988)

(Tjoflat, J., specially concurring).

sa 5 eet

AD ae ee telnet 4 nik tal A. 00s clit Oe La

15a

If, on the one hand, the contracted-out work is not

finished, the court could, at least in theory, require USX

to give the balance of the work to the Union’s members.**

At the same time, the court could order USX to compen-

sate the Union members who could have done the work

already performed for any wages they may have lost.

On the other hand, if the work has been finished, or cir-

cumstances otherwise preclude the substitution of Union

members for the contractor’s employees at the job site,

the court could require the Company to make whole any

Union members who were deprived of the opportunity

to do the clean-up work in violation of the agreement.**

Could the court require the Company to compensate the

Union for the attorneys’ fees it has incurred in prosecut-

ing the civil contempt proceeding, or, if the law fore-

closed such relief, could the court fine USX and direct

it to pay the fine to the Union?

An award of attorneys’ fees would be highly problem-

atical. The labor agreement makes no provision for the

granting of such fees in judicial proceedings to enforce

arbitration awards, and we know of no statutorily or

judicially created authority that would authorize the

court to grant them.» To be sure, an arbitrator, if he

23 Due process, however, would probably require that the court

first make the contractor a party to the proceedings and accord it

an opportunity to be heard.

24 See, e.g., Local 28 of Sheet Metal Workers v. EEOC, 478 US.

421, 443, 106 S.Ct. 3019, 3033, 92 L.Ed.2d 344 (1986).

25 The “‘American Rule’ prohibits fee-shifting in most cases,”

Chambers v. Nasco, Inc., U.S. ; , 111 S.Ct. 2123, 2133,

115 L.Ed.2d 27 (1991); thus, the Union could not recover its attor-

neys’ fees merely because it prevailed at the civil contempt hearing.

There are, however, “narrowly defined circumstances” in which

federal courts, in the exercise of their inherent power, can assess

fees against counsel or the parties they represent. Jd. For example,

a district court “may assess attorneys’ fees for the ‘willful dis-

obedience of a court order,’” id. (quoting Alyeska Pipeline Serv.

Co. v. The Wilderness Soc’y, 421 U.S. 240, 258, 95 S.Ct. 1612, 1622,

16a

believes that an award of attorneys’ fees would be “ap-

propriate to the circumstances of the case,” ** may re-

quire the Company to reimburse the Union for such ex-

penses; the parties, however, in drafting their agreement,

gave this authority to the arbitrator, not to the court.

As for a fine, the court could impose a fine and order

it paid to the Union; the court could not do so, how-

ever, if the purpose of the fine is to punish USX for vio-

lating the injunction.*7 A fine levied to punish a con-

temnor is a criminal, not a civil, contempt sanction, and,

in our hypothetical case, USX has not been charged with

criminal contempt. Could the court fine USX as a means

of coercing its future compliance with the injunction?

Arguably, the court could, but it would be a close ques-

tion whether, in truth, the purpose of the fine is, in-

stead, to punish USX for its past transgression.

It therefore appears that, in the circumstances we

posit, the district court, depending on the status of the

contracted-out work, might not be able to make the

Union and its members as whole as could an arbitrator—

because, as we have observed, supra at 1395-98, the dis-

cretion the parties have given the arbitrator to fashion

an award is much broader than the discretion the law

gives the district court to fashion a civil contempt sanc-

tion. The question thus arises: could the court, after

concluding that USX violated section 2-C’s notice pro-

vision and holding it in contempt, “remand” the case to

44 L.Ed.2d 141 (1975)), or “when a party has ‘acted in bad faith,

vexatiously, wantonly, or for oppressive reasons.’” Jd. (quoting

Alyeska, 421 U.S. at 258-59, 95 S.Ct. at 1622-23). Thus, the Union

probably could recover its attorneys’ fees if it established that USX’s

conduct—in failing to give notice of contracting out—fell within

these exceptions.

26 See supra note 6.

27 See Gompers v. Buck’s Stove & Range Co., 221 U.S. 418, 441-42,

31 S.Ct. 492, 498, 55 L.Ed. 797 (1911) (when purpose of sanction is

punishment, contempt is criminal contempt).

A decAhane tai 0 8 Mera

6 Le NL RAED Ml, RN a RA Nit RPT ID

ONE Fest, Wee were

17a

an arbitrator ** and instruct the arbitrator, drawing on

his authority under the labor agreement, to consider the

remedies that might be “appropriate to the circumstances

of the particular case” and to fashion whatever remedies

he deemed appropriate? In theory, the court could do

so; but we know of no legal precedent for such a

remand.

Assume, nonetheless, that the law would permit the

court to remand the task of fashioning a remedy to an

arbitrator. Would the arbitrator be bound by the court’s

conclusion that USX had contracted out production and

maintenance work without the requisite notice of the Un-

ion? That would depend on the court’s instructions to

the arbitrator. If the court bound the arbitrator to its

conclusion that USX had violated section 2-C’s notice

provision, would the arbitrator still have discretion to

*8 The court, acting on a motion to refer the case to arbitration,

could place the case in the hands of an arbitrator by compelling the

parties to arbitrate, as provided in their labor agreement, the mat-

ter of remedies.

29 We say that the district court could, in theory, take such action

because it has the power to compel arbitration at the behest of

either party at any stage of a proceeding. See generally, Textile

Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972

(1957). In the situation we posit, however, the court might have a

difficult time reconciling its earlier holding (when it issued the

injunction )—that arbitration provided the Union no adequate rem-

edy at law—with its instant holding (following the civil contempt

proceeding )—-that arbitration did provide the Union an adequate

remedy at law, a better remedy, in fact, than any remedy, whether

legal or equitable, the court could possibly fashion. The district

court might also have a difficult time explaining why the arbitrator

should be bound by the court’s determination that USX violated

section 2-C by not giving the Union notice of the contracting-out.

Given the arbitrator’s expertise in interpreting the parties’ labor

agreement in the light of the conditions of the workplace, and the

broad license the parties have granted him to fashion appropriate

remedies, an expertise and license the district court does not enjoy,

one could argue that no explanation the court could give for binding

the arbitrator to the court’s decision on the notice issue could pass

muster on appellate review.

18a

deny the Union and its members relief on the ground

that, in the arbitrator’s view, the “circumstances of the

particular case” warranted no relief?

For example, suppose the arbitrator, after hearing the

evidence adduced by the parties on the remedy issue—

in particular, evidence the district court had not con-

sidered—-concluded that the district court had erred; the

contracted-out work was not production and maintenance

work after all, or, if it was, an emergency excused USX

from giving notice. In such a case, the arbitrator would

reject the Union’s grievance and make no award. The

Union, in turn, would have nothing to enforce in the

district court. True, the Union could bring suit, but the

district court would be powerless to substitute its judg-

ment for that of the arbitrator and grant relief. See

United Paperworkers Int'l Union v. Misco, Inc., 484 U.S.

29, 38, 108 S.Ct. 364, 371, 98 L.Ed.2d 286 (1987).

We do not know, of course, what path the district

court will follow if, at some future date, the Union seeks

a show cause order, the order issues, and, following a

hearing, the court holds USX in contempt for violating

the injunction. Presumably, the court (1) could decide

all of the issues, leaving nothing for resolution by ar-

bitration as provided in the labor agreement, or (2)

could decide the question of whether USX violated the

injunction and, if the Union prevailed, direct the parties

to submit the matter of remedy to arbitration. If the

court chose the latter course, it would have to decide

whether, on the one hand, to bind the arbitrator to its

conclusion that USX failed to give notice as required by

section 2-C or, on the other hand, to permit the arbitra-

tor to exercise in full the authority conferred on him by

the labor agreement, meaning that the arbitrator could

reject the court’s conclusion that USX had violated sec-

tion 2-C. If the court permitted the arbitrator to exer-

cise in full the authority conferred on him by the labor

agreement, the injunction served no purpose; for when

called to enforce it, the court simply transferred the

i ecienceeeniemeniieeasaneieeianmiasiimsiliialll

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19a

controversy to the arbitrator for decision. In this scen-

ario, then, the court is a mere conduit—an expensive, un-

needed conduit.

Neither of these courses of action has any support in

the law; consequently, the court’s injunction cannot

stand. Consider the first alternative. The court, follow-

ingy the show cause hearing, decides all of the issues; it

holds USX in contempt, concluding that it should have

notified the Union before letting the contract for the

clean-up work, and fashions the remedy, leaving noth-

ing for arbitration. In this scenario, the court arrogates

entirely unto itself the role the parties gave the arbitra-

tor when they drafted their labor agreement; thus, the

court in effect rewrites the parties’ labor agreement. Ad-

mittedly, the court has not explicitly stricken the ar-

bitration provision from the agreement; that provision

remains extant as a dispute resolution mechanism. What

the court has done, however, is give the Union the option

of going to arbitration or going to court. The court’s

stated reason for giving the Union these options is that

it is dutifully enforcing an arbitration award.

Federal courts routinely enforce with injunctive or-

ders arbitration awards in labor cases. See, e.g., Enter-

prise Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. at

1361. They do so, however, only if the award draws its

essence from the labor agreement. United Paperworkers

Intl Union, 484 U.S. at 38, 108 S.Ct. at 371. As the

Supreme Court has cautioned, the

arbitrator is confined to interpretation and applica-

tion of the collective bargaining agreement; he does

not sit to dispense his own brand of industrial jus-

tice. ... |HJis award is legitimate only so long

as it draws its essence from the collective bargaining

agreement. When the arbitrator’s works manifest

an infidelity to this obligation, courts have no choice

but to refuse enforcement of the award.

Enterprise Wheel & Car Corp., 363 U.S. at 597, 80S. Ct.

at 1361. Accordingly, we will not enforce an award that

i al

20a

“directly contradicts the express language of the collective

bargaining agreement.” Bruno’s, Inc. v. United Food

& Commercial Workers Int’l Union, 858 F.2d 1529, 1531

(llth Cir. 1988). In the case at hand, the express lan-

guage of the labor agreement gives both parties the right

to demand, and to obtain, the arbitration of contracting-

out disputes. The arbitrator’s award, however, as inter-

preted, and enforced, by the district court, gives the

Union the right to ignore the Company’s demand for

arbitration and to sue for injunctive relief; thus, the

award “directly contradicts” that express language.*® If

this is how the arbitrator intended his award to be read,

it is obvious that he did not draw the award from the

essence of the contract.

The second, alternative course of action available to

the court—in which it decides the notice issue and sends

the remedy issues to the arbitrator—fails for the same

reason: the court enforces an arbitrator’s award that

has effectively rewritten, and contradicted, the labor

agreement.

The district court entered the injunction in this case

without giving due deference to the traditional prerequi-

sites for such relief.“ The principal prerequisite for

30 The arbitrator’s award does not explicitly give the Union the

right to ignore the Company’s demand for arbitration. Rather, the

award simply admonishes USX to comply with section 2-C of the

labor agreement; nothing in the language of the award, or the

opinion accompanying it, indicates that the arbitrator contemplated

judicial enforcement of the award through the federal court’s civil

contempt power. The district court, however, in entering the injunc-

tion at issue, necessarily concluded that the arbitrator intended such

enforcement.

31 In Boys Markets, Inc. v. Retail Clerk’s Union, 398 U.S. 235, 254,

90 S.Ct. 1583, 1594, 26 L.Ed.2d 199 (1970), a suit by an employer

for injunction in a labor dispute also committed to arbitration by

the collective bargaining agreement made with the union, Justice

2la

injunctive relief is the absence of an adequate legal

remedy. In most cases, the applicant establishes this

prerequisite by showing that it “will suffer irreparable

harm if the court does not intervene... .” 11 Wright &

Miller, supra, § 2944, at 399; see also supra note 31;

Kowalski v. Chicago Tribune Co., 854 F.2d 168, 171

(7th Cir. 1988). Here, the Union made no such showing

since an adequate remedy exists at law.*

Arbitration takes much less time than litigation, and

it is considerably less expensive.** Under section 2-C of

Brennan, writing for the Court, set forth some of the factors a

federal district court must consider in deciding whether to enter an

injunction in such a case:

[T]he District Court must, of course, consider whether is-

suance of an injunction would be warranted under ordinary

principles of equity—-whether breaches [of the collective bar-

gaining agreement] are occurring and will continue, or have

been threatened and will be committed; whether they have

caused or will cause irreparable injury to the employer; and

whether the employer will suffer more from the denial of an

injunction than will the union from its issuance.

Id. (quoting Sinclair Refining Co. v. Atkinson, 370 U.S. 195, 228,

82 S.Ct. 1328, 1346, 8 L.Ed.2d 440 (1962) (Brennan, J., dissenting),

overruled by Boys Markets, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d

199 (1970) ). The same considerations should counsel a federal court

in deciding whether to grant a union’s application for an injunction

compelling the employer to arbitrate a dispute the parties’ labor

agreement commits to arbitration.

32 In fact, as the following discussion makes clear, by applying for

and obtaining the injunction at issue, the Union has subjected itself,

and the Company as well, to great harm— in the form of substantial

litigation expenses and considerable delay in the resolution of con-

tracting-out disputes.

33 Before they settled on arbitration rather than litigation as the

mechanism for resolving contracting-out disputes, the parties pre-

sumably performed a cost benefit analysis and concluded that arbi-

tration would be far more efficient and less expensive. Moreover, as

the Supreme Court has observed,

the parties’ objective in using the arbitration process is pri-

marily to further their common goal of uninterrupted produc-

22a

the parties’ labor agreement, if a controversy does not

settle within five days of the filing of a grievance, either

party can demand arbitration; once arbitration is in-

voked, the other side has five days to respond—with “a

written summary of the facts and arguments that it

relies upon.” Within the same five-day period, an arbi-

tration hearing, to commence within ten days, must be

scheduled. Then, after the hearing is concluded, the

arbitrator has five days to decide the case. Arbitration

under section 2-C was designed to take no more than

twenty days—from the demand for arbitration to the

arbitration decision.**

A federal district court colud not be expected to dis-

pose of a contracting-out dispute in anywhere near the

time the parties have allotted for arbitration. Posit, for

example, a situation in which the Union discovers that

USX has let a contract for production and maintenance

work. The contractor is already on the job site, and

the Union, believing that USX has breached the labor

agreement, wants to stop the work. The labor agree-

ment contains no arbitration provision, however, so the

Union has to take its breach of contract claim to court.

The Union sues and asks the district court for prelimi-

nary and permanent injunctive relief (and for damages—

the wages its members, who could have performed the

work, have lost to date). The Union immediately seeks

a temporary restraining order (TRO) to halt the work,

but a TRO does not issue because, the court concludes,

the Union’s members will not suffer irreparable injury;

damages will make them whole. The Union, having failed

tion under the agreement, to make the agreement serve their

specialized needs. The ablest judge cannot be expected to bring

the same experience and competence to bear upon the determina-

tion of a grievance, because he cannot be similarly informed.

United Steelworkers v. Warrior & Gulf Navig. Co., 363 U.S. 574,

582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960).

34 See supra note 4.

23a

to obtain a TRO, now asks for a preliminary injunction.

A considerable amount of time passes, because the Union

has to obtain service of process on the contractor” as

well as USX; meanwhile, the work continues unabated.

After service of process is effected and due notice is

given, see Fed.R.Civ.P. 65(a), a hearing on the Union’s

application for a preliminary injunction is held. The

injunction does not issue, however, because the Union

fails to establish two of the four prerequisites for a pre-

liminary injunction: (1) “a substantial threat that [the

Union] will suffer irreparable injury if the injunction

is not granted” and (2) “that the threatened injury to

[the Union] outweighs the threatened harm the injunc-

tion may do to [USX].” United States v. Lambert, 695

I'.2d 536, 539 (11th Cir. 1983) (quoting Canal Auth. v.

Callaway, 489 F.2d 567, 572 (5th Cir. 1974) ).*° The

Union also fails to obtain a permanent injunction; the

contracted-out work is finished and, in any event, the

Union has an adequate remedy at law in the form of

money damages for the wages its members lost. The

Union therefore seeks money damages. Whether the case

's tried to the court or to a jury, further delay ensues

before the matter is resolved.

In sum, it is clear that the parties’ expedited grievance

procedure, with its provision for arbitration, provides a

far better mechanism for resolving contracting-out dis-

35 Due process would require the court to bring the contractor to

the proceeding before enjoining it from finishing the contracted-out

work.

86 The other two prerequisites for preliminary injunctive relief

are (3) “a substantial likelihood that [the Union] will prevail on

the merits” and (4) “that granting the preliminary injunction will

not disserve the public interest.” Lambert, 695 F.2d at 539 (quoting

Canal Auth. v. Callaway, 489 F.2d 567, 572 (5th Cir. 1974)). The

later of these prerequisites may also be violated in this case. See

Norris-LaGuardia Act, 47 Stat. 71, 29 U.S.C. § 108 (1988) (stating

public policy favors arbitration of labor disputes).

24a

putes than the district court’s civil contempt proceeding.”

Requiring the Union to resort to arbitration instead of

civil contempt will certainly cause the Union no irrep-

arable injury; on the contrary, the Union should receive

considerable benefit—a greater benefit than it could ever

receive from a civil contempt adjudication. As the parties

contemplated when they entered into the labor agree-

ment, the Union cannot repair to the courthouse unless,

following arbitration and the receipt of an award calling

for the payment of money or the performance of a spe-

cific act by USX, the Company fails to honor the arbi-

trator’s decision. If the Company fails to comply, the

Union can sue and enforce the award—-by obtaining a

money judgment or an injunctive order.”

ITI.

In conclusion, we set aside the district court’s injunc-

tive order because (1) it enforces an arbitration award

(if, indeed, it is an arbitration award) that is illegal,

and (2) the Union has an adequate remedy at law. The

case is REMANDED for proceedings in accordance with

this opinion.

IT IS SO ORDERED.

37 The district court chose the civil contempt proceeding as the

mechanism for resolving contracting-out disputes when it entered

the injunction at issue; the civil contempt proceeding is the only

lawful means available for enforcing injunctive orders. See supra

note 22.

38 This discussion, in subpart B, reinforces our conclusion, in

subpart A, that the arbitrator’s award—which orders USX “to

hereafter provide [the Union] notice of contracting out as required

by Section 2-C” of the labor agreement—was not drawn from the

essence of the labor agreement. In other words, it cannot reasonably

be said that the parties, having chosen the most efficient and in-

expensive means of resolving contracting-out disputes—arbitration

—meant to subject themselves to the financially burdensome and

time-consuming means—the civil contempt proceeding—the district

court considers the arbitrator to have chosen.

25a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 90-7313

D.C. Docket No. CV89-1483-S

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff-A ppellee,

versus

USX CORPORATION,

Defendant-A ppellant.

Appeal from the United States District Court

for the Northern District of Alabama

Before TJOFLAT, Chief Judge, DUBINA, Circuit Judge,

and PECK *, Senior Circuit Judge.

JUDGMENT

[Filed July 24, 1992]

This cause came to be heard on the transcript of the

record from the United States District Court for the

Northern District of Alabama, and was argued by

counsel ;

* Honorable John W. Peck, Senior U.S. Circuit Judge for the

Sixth Circuit, sitting by designation.

26a

ON CONSIDERATION WHEREOF, it is now hereby

ordered and adjudged by this Court that the order of the

District Court appealed from in this cause be and the

same is hereby REMANDED to said District Court for

further proceedings in accordance with the opinion of

this Court;

IT IS FURTHER ORDERED THAT plaintiff-appellee

pay to defendant-appellant, the costs on appeal to be

taxed by the Clerk of this Court.

Entered: July 24, 1992

For the Court:

MIGUEL J. CORTEZ

Clerk

By: /s/ David Maland

Deputy Clerk

Issued as Mandate: Oct. 26, 1992

27a

APPENDIX C

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

Southern Division

Case No. CV 89-P-1483-S

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff,

-VS.-

USX CORPORATION,

Defendant.

OPINION

{Entered March 15, 1990]

United Steelworkers of America, AFL-CIO-CLC, (“the

Union”) filed this action against USX Corporation

(“USX”) on August 28, 1989, alleging USX failed to

comply with the Collective Bargaining Agreement entered

into by the parties in 1987. Specifically, the Union

asserts USX has not obeyed a February 7, 1989 order of

Arbitrator Dybeck “to hereafter provide notice of con-

tracting out as required by Section 2-C [of the Collective

Bargaining Agreement]” at its Fairfield Works. The

Union seeks injunctive and monetary relief.

Both parties have filed motions for summary judg-

ment. The Union asserts that if an injunction does not

issue the power of arbitration will be lost and our whole

system of labor-management relations will collapse. USX

asserts the issue of whether it has complied with Arbi-

trator Dybeck’s award at the Fairfield Works and, if not,

what the remedy should be,_is an issue that should be

28a

decided in arbitration—for the same reasons. In addi-

tion, USX argues that (1) an injunction would place a

heavy burden on this court by allowing the Union to

bring numerous requests for contempt citations; (2) the

injunction requested is too broad to satisfy the require-

ments of Fed. R. Civ. P. 65; and (3) the Norris-La-

Guardia Act requires a hearing before an injunction can

issue. The court will address the last three arguments

first.

1. Necessity for an Evidentiary Hearing pursuant to

the Norris-LaGuardia Act

Section 7 of the Norris-LaGuardia Act, 29 U.S.C. § 107

(1932), provides:

No court of the United States shall have jurisdic-

tion to issue a temporary or permanent injunction

in any case involving or growing out of a labor dis-

pute, as defined in this chapter, except after hearing

the testimony of witnesses in open court (with op-

portunity for cross-examination) in support of the

allegations of a complaint made under oath, and

testimony in opposition thereto, if offered.

USX asserts this section precludes issuance of an in-

junction for the Union as part of a summary judgment

because there has been no evidentiary hearing. In 1957,

however, the Supreme Court held “[t]he Congressional

policy in favor of the enforcement of agreements to

arbitrate grievance disputes being clear, there is no rea-

son to submit them to the requirements of §7 of the

Norris-LaGuardia Act.” Textile Workers Union v. Lincoln

Mills of Alabama, 77 S.Ct. 912, 919 (1957). In Lincoln

Mills, the company had refused to go to arbitration de-

spite the Union’s request that it do so and the provision

in the Collective Bargaining Agreement requiring the

parties to submit to arbitration. Here, the union alleges

not that USX refused to go to arbitration, but rather

that, having gone through arbitration and lost, USX

29a

failed to comply with the order of the arbitrator. While

there is some difference between the two situations, this

court is of the opinion that the holding in Lincoln Mills

applies here: where a party to an agreement to arbitrate

is charged with failure to abide by the arbitrator’s de-

cision, the congressional policy in favor of arbitration obvi-

ates the need to comply with § 7 of the Norris-LaGuardia

Act.

2. Compliance with Rule 65(d)

Rule 65(d) of the Federal Rules of Civil Procedure

requires that an order granting an injunction “be spe-

cific in its terms” and “describe in reasonable detail,

and not by reference to the complaint or other docu-

ment, the act or acts sought to be restrained.” USX

argues that the Union’s proposed order is not sufficiently

specific to satisfy Rule 65(d) and suggests that it is im-

possible to draft an injunction which would satisfy the

requirements of Rule 65(d) in this circumstance. The

Union has proposed an order which states in part:

[I]t is ORDERED, ADJUDGED and DECREED as

follows:

1. The Court is hereby confirming and enforcing

the award in Arbitration Case Nos. 26,733, 26,734

and 26,735 which award was made by Alfred C.

Dybeck, Chairman, Board of Arbitration, on Febru-

ary 7, 1989. Accordingly, USX is ORDERED to

hereafter provide notice of contracting out at the

Fairfield Works as required by Section 2-C of the

Collective Bargaining Agreement between the par-

ties

The court is concerned that by incorporating by refer-

ence the terms of Section 2-C such an injunction would

run afoul of the requirements of Rule 65(d). The court

is of the opinion, however, that an injunction which itself

includes the provisions of Section 2-C would not run afoul

of Rule 65(d).

30a

3. Burden on the Court

USX argues the court should not issue an injunction

because to do so would allow the Union to bring numer-

ous actions for contempt, placing a heavy burden on the

court. While the burden imposed on the court is of some

concern, it is a problem properly dealt with by limiting

the scope of the injunction rather than by denying the

injunction.

4. Whether an Injunction Should Issue

USX couches its remaining arguments in terms of

jurisdiction. The real issue, however, is not whether the

court has the power to issue the requested injunction,

but whether it should do so in these circumstances. See

Oil, Chemical & Atomic Workers International Union v.

Ethyl Corp., 644 F.2d 1044 (5th Cir. 1981) (hereinafter

“Ethyl’),

In 1987, USX and the Union entered into a Collective

Bargaining Agreement which, by its terms, remains in

effect through February 1, 1991. Section 2-C of this

agreement requires USX to provide the Union with

notice of its intention to hire outside contractors to per-

form work which normally could be done by union mem-

bers. Although there are exceptions, “‘such notice will be

given in sufficient time to permit the Union to invoke

the Expedited Procedure described in paragraph G [of

the Collective Bargaining Agreement]’’. Since the Col-

lective Bargaining Agreement went into effect, the Union

has filed several grievances asserting that USX con-

tracted out jobs at the Fairfield Works which should have

been given to Union members and failed to comply with

the notice requirement of Section 2-C at the Fairfield

Works. In many, but not all, of these grievances, the

arbitrators found for the Union. Finally, in 1989, the

Union asked Arbitrator Dybeck to issue an order requir-

ing the company to comply with Section 2-C. The request

was made when Arbitrator Dybeck had before him three

sla

grievances in which the Union asserted that USX had

not complied with section 2-C. Arbitrator Dybeck con-

cluded that in all three grievances USX had failed to

comply with the requirements of section 2-C and ordered

that USX “hereafter provide notice of contracting out

as required by Section 2-C.”

The Union contends USX has not complied with Arbi-

trator Dybeck’s order. USX itself has admitted both in

grievance proceedings regarding actions taken after Ar-

bitrator Dybeck issued his order and in its briefs and

affidavits submitted to this court that it has violated

the requirements of Section 2-C. See Arbitration Award

in Grievance No. SFS-89-208 (exhibit L to Supplement

Affidavit of Jackie Davis); Affidavit of Jerry L. Fuller.

USX’s admitted failure to comply with Section 2-C in

some circumstances since Arbitrator Dybeck issued his

order shows that USX has, in fact, violated Arbitrator

Dybeck’s order.

USX’s violations of Arbitrator Dybeck’s order do not,

however, automatically entitle the Union to an injunction.

The Union must also show that an injunction is necessary

—that the harm in refusing to issue the injunction is

greater than the harm in issuing the injunction. USX

argues it complies with Section 2-C (and thus Arbitrator

Dybeck’s award) 98% of the time and that its “good

faith” effort to comply makes an injunction unneces-

sary. Arbitrator Dybeck did not order USX to try to

comply with Section 2-C. Arbitrator Dybeck ordered

USX to comply—100% of the time. As both parties have

argued in their briefs, the arbitration process is central

to effective labor-management relations. It is, further-

more, a process strongly favored by Congress. See Lin-

coln Mills, supra. The failure of either party to comply

with the award of an arbitrator strikes at the heart of

the whole arbitration (and therefore labor-management)

system. Where, as here, the failure appears to go beyond

a single instance of non-compliance, the danger to the

32a

system is increased. Thus, it appears the harm in issuing

an injunction is significantly less than the potential harm

in refusing to issue an injunction.'

USX argues, however, that balancing the harm is not

sufficient to justify issuing an injunction in this case.

In a very similar action, the Fifth Circuit concluded

that the policy of non-interference with arbitration re-

quires that before issuing an injunction in this context

the court must satisfy a three-part test. First, the party

seeking the injunction must show that the agreement has

been violated. Second, the party opposing the injunction

must be given the opportunity to show that an exception

exists which justifies its conduct. Third, the party seek-

ing the injunction must show that the alleged exception is

merely a pretext. Ethyl, supra. The evidence shows that

in at least one instance, USX failed to comply with Sec-

tion 2-C, and thus with Arbitrator Dybeck’s award,

without any; justification for doing so.* Furthermore,

this court will require the Union to satisfy the Ethyl test

before it will issue any contempt citation pursuant to

this injunction. Plaintiff’s Motion for Summary Judg-

ment is therefore GRANTED,’ defendant’s Motion for

Summary Judgment is DENIED.

This the 15th day of March, 1990.

s/ Sam C. Pointer, Jr.

United States District Judge

1In this regard, it is important to note that if, indeed, USX com-

plies with Arbitrator Dybeck’s award in the future, USX will not

be harmed by the existence of an injunction requiring it to comply.

2 Negligence apparently is not a justification for failure to comply

under the Ethyl standard.

3 The Union has not pursued its original claim for damages, choos-

ing to rely only on the injunctive relief sought.

33a

APPENDIX D

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

Southern Division

Case No. CV 89-P-1483-S

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff ;

-VS.-

USX CORPORATION,

Defendant.

—_—_

ORDER

[Entered March 15, 1990]

For the reasons stated in the accompanying opinion,

plaintiff's Motion for Summary Judgment is GRANTED;

defendant’s Motion for Summary Judgment is DENIED.

USX Corporation is hereby ENJOINED and DIRECTED

as follows:

Before it finally decides to contract out an item of

work at the Fairfield Works, USX will provide notice of

such intention to the Union members of the contracting

out committee. Unless the item of work is one previously

identified by the parties as a shelf item, such notice will

be given not less than 25 days! before the work is to be

done, unless emergency sitautions do not permit it. Such

notice shall be in writing and shall be sufficient to advise

1 Twenty-five days’ notice is necessary to give the Union sufficient

time to permit the Union to invoke the Expedited Grievance

Procedure described in paragraph G of the Collective Bargaining

agreement.

34a

the Union members of the committee of the location, type,

scope, duration and timetable of the work to be performed

so that the Union members of the committee can ade-

quately form an opinion as to the reasons for such con-

tracting out. Such notice shall generally contain the in-

formation set forth below:

Pr Pr

Location of work

Type of work:

a. Service

b. Maintenance

ce. Major Rebuilds

d. New Construction

Detailed description of the work

Crafts or occupations involved

Estimated duration of work

Anticipated utilization of bargaining unit forces

during the period

Effect on operations if work not completed in

timely fashion.

Completion of a form notice agreed to by the parties will

satisfy the content component of this order.

Costs taxed against defendant.

This the 15th day of March, 1990.

/s/ Sam C. Pointer, Jr.

United States District Judge

35a

APPENDIX E

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

Southern Division

Case No. CV 89-P-1483-S

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff ;

-VS.-

USX CorRPORATION,

Defendant.

OPINION

[Entered April 3, 1990]

Defendant has filed a Motion to Alter, Amend, or Va-

cate the Judgment entered by this court on March 15,

1990. As written, the March 15 Order requires USX to

provide notice of its intention to contract cut day-to-day

maintenance and repair work and service at least 25

days before the work is to be done. USX argues, and

plaintiff concedes, that the contract does not require 25

days notice for day-to-day maintenance and repair work

and service. Plaintiff argues that the contract requires

at least 20 days notice for these items. Defendant ar-

gues the court should not impose a separate timing re-

quirement for these items, but should place them in the

same category as shelf items and emergency work for

which notice is required but the timing of such notice

is not set. The court agrees. Defendant’s Motion to

Alter, Amend or Vacate Judgment is GRANTED.

This the 3rd day of April, 1990.

‘S/ Sam C. Pointer, Jr.

United States District Judge

36a

APPENDIX F

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

Southern Division

Case No. CV 89-P-1483-S

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff ;

-VS.-

USX CORPORATION,

Defendant.

AMENDED ORDER

[Entered April 3, 1990]

For the reasons stated in the accompanying opinion,

defendant’s Motion to Alter, Amend or Vacate Judg-

ment is GRANTED. This court’s March 15, 1990 order

is hereby AMENDED. USX Corporation is ENJOINED

and DIRECTED as follows:

Before it finally decides to contract out an item of

work at the Fairfield Works, USX will provide notice of

such intention to the Union members of the contracting

out committee. Unless the item of work is one previously

identified by the parties as a shelf item or involves day-to-

day maintenance and repair work and service, such notice

will be given not less than 25 days! before the work is

to be done, unless emergency situations do not permit it.

1 Twenty-five days’ notice is necessary to give the Union sufficient

time to permit the Union to invoke the Expedited Grievance

Procedure described in paragraph G of the Collective Bargaining

agreement.

37a

Such notice shall be in writing and shall be sufficient to

advise the Union members of the committee of the loca-

tion, type, scope, duration and timetable of the work to

be performed so that the Union members of the com-

mittee can adequately form an opinion as to the reasons

for such contracting out. Such notice shall generally

contain the information set forth below:

mee

Location of work

Type of work:

Service

b. Maintenance

ce. Major Rebuilds

d. New Construction

Detailed description of the work

Crafts or occupations involved

Estimated duration of work

Anticipated utilization of bargaining unit forces

during the period

Effect on operations if work not completed in

timely fashion.

Completion of a form notice agreed to by the parties will

satisfy the content component of this order.

Costs taxed against defendant.

This the 3rd day of April, 1990.

/s/ Sam C. Pointer, Jr.

United States District Judge

38a

APPENDIX G

BOARD OF ARBITRATION

Case No. USS-26,733;

-26,734;

-26,735

February 7, 1989

ARBITRATION AWARD

Grievance No. SF-88-118

-88-119

-88-120

UNITED STATES STEEL CORPORATION

SOUTHERN STEEL DIVISION,

Fairfield Works

and

\ UNITED STEELWORKERS OF AM ERICA,

Local Union No. 1013

Subject: Expedited Procedure Contracting Out Case

Statement of the Grievance :

“WE PROTEST MANAGEMENT CONTRACTING

OUT M.E.0O. WORK TO OUTSIDE CONTRAC-

TORS (BMI) CEASE AND DESIST. PAY ALL

MONIES AND [BENEFITS] LOST TO ALL AF-

FECTED EMPLOYEES. RETURN ALL WORK

TO 1013 BARGAINING UNIT. NO CONTRACT-

ING OUT NOTICE ISSUED.”

39a

Grievance Data: Date

Grievance Filed: September 21, 1988

Appeal to Arbitration: October 13, 1988

Received by Board: October 17, 1988

Case Scheduled: December 19, 1988

Case Heard: January 25, 1989

Contract Provision Involved:

Section 2-C of the February 1, 1987 Agreement.

Statement of the Award:

The grievances are sustained to the extent set forth

in Findings. The Company is ordered to hereafter

provide notice of contracting out as required by Sec-

tion 2-C. The matter of the spraying of troughs is

returned to the Parties for further consideration as

is the matter of monetary remedy.

BACKGROUND

In these grievances from Fairfield Works, appealed to

Arbitration by the Company pursuant to Section 2-C-G

of the Agreement, the Union protests the Company’s

use of contractor’s Laborers and Mobile Equipment Op-

erators to work in the Blast Furnace beginning Septem-

ber 11, 1988 as a violation of Section 2-C-A of the Feb-

ruary 1, 1987 Agreement.

On September 6, 1988 the Company commenced blow-

ing in the No. 8 Blast Furnace which had been under

extensive rebuild for most of 1988. Several malfunctions

occurred during this initial blow-in. Apparently some’

iron was produced because one of the problems was that

several derailments occurred causing the loss of several

ladles. More importantly for instant purposes, first one

and then a second turbo-blower malfunctioned causing

a thermal imbalance in the furnace. This resulted in

gummy slag running out that first gummed everything

40a

up and then broke loose and ran out. This was viewed

as a crisis of major importance requiring that the run-

ners be cleaned out immediately; otherwise, the furnace

itself might freeze up. On September 11, 1988, pursu-

ant to Management’s instructions, B.M.I., a contractor,

brought in a crew consisting of basically Laborers and

Operating Engineers (Equipment Operators) who com-

menced cleaning up the area. The slag and iron had

solidified but was still quite hot. The contractor’s employ-

ees utilized picks, bars and other tools to loosen the slag

and “grab buckets” and shovels to remove it.

According to the testimony of Mr. Cooper, Area Man-

ager of Blast Furnace Operations, his initial thought was

to use the contractor’s employees, about 12 to 15 in num-

ber, for a couple of days. He stated that after 48 con-

tinuous hours the Blast Furnace was operational again

but he kept a smaller number of contractor’s employees

there to clean up drain pipes and perform other func-

tions. By September 17, 1988, the Blast Furnace was

fully operational.

Mr. Cooper testified that the break out was an emer-

gency and that he viewed the work involved as being part

and parcel of the rebuild of the Furnace since the mal-

function occurred during the initial blow-in and before

the furnace was fully operational. He testified that all

the experienced employees in the Biast Furnace were fully

employed and maintenance personnel were working over-

time. Not all the personnel were acquainted with hot

side work. This was particularly true in the Stockhouse

where personnel new to Blast Furnace operations were

employed. The employees in the Q-BOP and Caster areas

were themselves fully occupied in the blow-in of their

equipment. No Labor Gang had been employed in the

Blast Furnace since the 1984 start-up after a lengthy

shutdown.

Evidence was adduced to show that during the period

from September 11 through Friday, September 16 the

4la

contractor employed Brickmason Tenders to the extent

of 471 hours and Operating Engineers for 38.5 hours.

Another Company witness testified that during the week

in issue commencing September 11, 1988, the Blast Fur-

nace Maintenance forces averaged 14.6 hours of overtime

with refusals of overtime averaging 2.7 hours.

The Union adduced testimony to show that over the

dates of September 11 through September 14, 1988 from

8 to 15 contractor’s employees worked cleaning up the

skimmers, slag troughs and runners. They were there

one turn on the 11th, two turns on the 12th and 13th

and three turns on the 14th. Thereafter, a lesser number

of contractor’s employees worked. On the 15th, 6 contrac-

tor’s employees worked on B turn and 7 on C turn clean-

ing runners. On Friday the 16th, 7 contractor’s employ-

ees worked on each of the B turn and C turn. On Mon-

day the 19th, contractor’s employees worked on two turns

—5 on B turn and 8 on C turn. On the 20th, three men

worked on C turn spraying troughs. On September 21

and 22, 4 or 5 contractor’s employees worked on B turn

using a jackhammer to remove a brick wall.

The Union contends that this is not just a protest

against the use of the contractor to clean up the spiilage

as a result of the break out but also what it views as

ongoing contracting out of essentially Laborer and Mobile

Equipment Operator work through to time of hearing.

It is noted that even after the alleged emergency was

over the contractor remained on the premises performing

work on the runners and troughs. It is stressed that since

1984 the Company has refused to employ Laborers. Testi-

mony was adduced of meetings with Blast Furnace Super-

vision at or just prior to the filing of the instant griev-

ances in which the Union noted to Management the fail-

ure to provide notice of the instant contracting out and

the failure to have Laborers available and employed to

perform the contracted out work.

The Union adduced further evidence that there have

been spills in the past at the Blast Furnaces and on no

42a

occasion has the Company called in a contractor to per-

form the clean-up work. In the past the work has been

performed by Laborers or by Blast Furnace personnel

and others such as employees from the Stockhouse if

necessary.

Finally, the Union stresses that no notice was ever

given the Union of the contracting out involved here. It

notes that this is not the first time that the Board has

been faced with a failure to give notice in contracting

out situations at Fairfield Works. Therefore, the Union

seeks a cease and desist order requiring that the Com-

pany hereafter provide notice of contracting out.

The Company argues first that the instant work, at

least that performed on September 11, 12, 13 and 14,

should be viewed as work covered by the major rebuild

of the furnace which was properly contracted out. It

notes that the breakout occurred as a direct consequence

of the failure of the two turbo blowers which had been

reconstructed during the outage. At the time of the fail-

ure and the breakout, the Blast Furnace was on its initial

blow-in and not really operational. Thus, in light of the

timing of the breakout and the circumstance under which

it occurred, the Company urges that the work in issue

be found to be part of the total rebuild of the furnace.

Assuming the Board should not agree with the above

analysis, the Company argues that the work performed

up through the 14th was clearly under emergency circum-

stances. The work had to be performed at that time and

consumed a large number of manhours at a time when

the Bargaining Unit was fully employed, working over-

time and even refusing overtime. Thus, under any cir-

cumstances, no remedy would be available for the period

through the 14th. For the period thereafter up through

September 22, 1988 during which a lesser number of con-

tractor’s employees continued to work, the Company

seems to concede that an overtime remedy might be

available should the Board find that work was not part

of the major rebuild.

43a

FINDINGS

At the hearing a problem arose as to the extent that

evidence should be received and considered of the pres-

ence of contractor’s employees in the Blast Furnace after

September 11, 1988. The Union asserts that this has been

an ongoing problem and noted that the Complaint, dated

September 21, 1988, stated the date of the alleged viola-

tion as “September 11, 1988 and continuing.” The Arbi-

trator limited the Union’s evidence to the period up to

September 30, 1988, the date of the Company Summary

of Facts and Arguments simply because it was apparent

that any contracting out incidents after that date could

not be adequately responded to or discussed by either

Party.

One of the problems causing this sort of problem is

that no contracting out notice was issued relating to the

protested work involved herein. It is true that at least

for the first several days after the breakout the clean-up

work required was of an emergency nature. That fact,

however, does not absolve the Company from providing

notice to the Union. Under Section 2-C-E, an emergency

situation may well absolve the Company from giving

advance notice of the contracting out but that does not

mean written notice is not required even under such cir-

cumstances. The notice provisions not only afford the

Union knowledge of the contracting out but also provides

the framework within which the Parties can consider the

contractual issues that may arise under the notice. With

no notice whatsoever, no such framework exists and, as

here, the Parties from the outset were at odds as to how

extensive the face presentation should be with the Union

seeking to bring within the scope of this grievance all

the contacting out of labor work that has allegedly oc-

curred over the period of months at the Blast Furnace

much of which the Parties clearly had not discussed un-

der these grievances. At the other extreme, the Company

sought to restrict the scope of the grievances to that

period immediately around September 11, 1988.

44a

Initially, the Company seeks to place the [sic] these in-

stances of contracting out under the overall umbrella of

the contracting out of the rebuild of the No. 8 Blast Fur-

nace. It is true that the breakout occurred during the ini-

tial blow-in of the furnace and was a direct consequence of

the malfunction of two turbo-blowers rebuilt during the

outage. These facts, however, do not persuade that the

work of cleaning up the spill should be viewed as part

of the contracting out of the rebuild. It seems clear that

the commencement of operations, as occurred here, could

occur only after the contractor responsible for the rebuild

had turned the furnace over to the Company for opera-

tion. A Company witness testified that he had been as-

sured that the turbo-blowers were in operable condition.

The fact that they apparently were not does not mean

that the contracting out of the rebuild, presumably as a

major reconstruction job under Section 2-C-B-c, somehow

continued over to cover a breakout caused by a faulty

repair. Furthermore, it was the Company, not the rebuild

contractor, who took the responsibility for finding per-

sonnel to perform the cleanup. Under these circum-

stances, it cannot be concluded that the work in issue

here was a part of the rebuild.

There can be no issue that the need to clean up the

slag and iron from the breakout as quickly as possible

represented an emergency situation. As noted above,

however, this fact provides no excuse for failing to give

any notice whatsoever under the Agreement. Under Mar-

ginal Paragraph 2.31 it simply excused giving advance

notice of that portion of the work. Nor was any notice

given for the portion of the work when some of the con-

tractor’s employees were retained to perform further

clean-up work after the emergency had passed. Thus, the

Company violated the notice provisions of Section 2-C of

the Agreement.

All of the work involved here, with the possible excep-

tion of the spraying of troughs said to have been per-

formed by the contractor on September 20, 1988, was

45a

work capable of being performed by the Bargaining Unit

as that term in Section 2-C-A has been interpreted by the

Board. The exceptions to the basic prohibition make no

reference to emergency work. There is no claim here

that any of the work involved, except the spraying of

troughs and some work on a brick wall was subject to a

consistent practice under either Section 2-C-B-l-a or 2-

C-B-1-b. Thus, it can only be concluded that the contract-

ing out in issue violated the Agreement. The matter of

the spraying of troughs is returned to the Parties for

further discussion.

Also, there exists an issue related to work performed

by the contractor on a brick wall. The Board is not per-

suaded that this was part of the rebuild. It appears from

the testimony that the contractor removed the wall using

pneumatic jackhammers. This more closely resembles

Laborers’ work than that of Bricklayers so the fact that

the Bricklayers may have been at “bogey” under the Fair-

field Works Agreement is viewed as irrelevant. The use

of the contractor to perform this work on September 21

and 22 violated the Agreement.

There remains the matter of whether a monetary rem-

edy is appropriate in this case. The evidence seems clear

that all available employees were fully employed at the

time and working some overtime. Although some over-

time figures were submitted in evidence they were not

complete. Thus, the matter of remedy will be returned to

the Parties to review the availability of empioyees to have

performed the work assigned to the contractor. To the ex-

tent it may be important to the Parties’ discussions, it is

the opinion of the Board that the emergency period ex-

tended no later than September 14, 1988. Consideration

should be given to the Board’s Award in USS-23,431 et al

which discussed the monetary remedy problems that exist

with respect to work contracted out under somewhat simi-

lar circumstances.

46a

AWARD

The grievances are sustained to the extent set forth in

Findings. The Company is ordered to hereafter provide

notice of contracting out as required by Section 2-C. The

matter of the spraying of troughs is returned to the

Parties for further consideration as is the matter of

monetary remedy.

BOARD OF ARBITRATION

/s/ Alfred C. Dybeck

ALFRED C. DYBECK

Chairman

47a

APPENDIX H

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 90-7313

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC,

Plaintiff-A ppellee,

versus

USX CORPORATION,

Defendant-A ppellant.

On Appeal from the United States District Court

for the Northern District of Alabama

ON PETITION(S) FOR REHEARING AND

SUGGESTION (S) OF REHEARING EN BANC

[Filed October 14, 1992]

Before: TJOFLAT, Chief Judge, DUBINA, Circuit

Judge, and PECK *, Senior Cireuit Judge.

PER CURIAM:

() The Petition(s) for Rehearing are DENIED and

no member of this panel nor other Judge in regular ac-

* Honorable John W. Peck, Senior Circuit Judge for the Sixth

Circuit, sitting by designation.

48a

tive service on the Court having requested that the Court

be polled on rehearing en banc (Rule 35, Federal Rules

of Appellate Procedure; Eleventh Circuit Rule 35-5), the

Suggestion(s) of Rehearing En Bane are DENIED.

ENTERED FOR THE COURT:

/s/ Gerald B. Tjoflat

United States Circuit Judge

49a

APPENDIX [

AGREEMENT

between

USS

DIVISION OF USX CORPORATION

and the

UNITED STEELWORKERS

OF AMERICA

Production and Maintenance Employees

February 1, 1987

Pittsburgh, Pennsylvania

50a

SECTION 2-C—CONTRACTING OUT

The parties have existing rights and contractual un-

derstandings with respect to contracting out. In addition,

the following provisions shall be applicable to all con-

tracting out issues arising on or after May 1, 1987.

A. Basie Prohibition

In determining whether work should be contracted

out or accomplished by the bargaining unit, the guiding

principle is that work capable of being performed by bar-

gaining unit employees shall be performed by such em-

ployees. Accordingly, the Company will not contract out

any work for performance inside or outside the plant

unless it demonstrates that such work meets one of the

following exceptions.

B. Exceptions

1. Work in the Plant

a. Consistent Practice Established Prior to March 1,

1983

Production, service, all maintenance and repair

work, all installation, replacement and _ recon-

struction of equipment and productive facilities,

other than that listed in subparagraph B-1-c be-

low, all within a plant, may be contracted out

if the consistent practice, established prior to

March 1, 1988, has been to have such work per-

formed by employees of contractors.

b. Consistent Practice Established On or After

March 1, 1983

Production, service, all maintenance and repair

work, all installation, replacement and _ recon-

struction of equipment and productive facilities,

other than that listed in subparagraph B-1-c be-

low, all within a plant, may be contracted out if

5la

(i) the consistent practice, established on or af-

ter March 1, 1988, has been to have such work

performed by employees of contractors and (ii)

it is more reasonable (within the meaning of

paragraph C below) for the Company to con-

tract out such work than to use its own em-

ployees.

e. Major new construction, including major installa-

tion, major replacement and major reconstruc-

tion of equipment and productive facilities, at

any plant may be contracted out subject to any

rights and obligations of the parties which, as of

the beginning of the period commencing August

1, 1963, are applicable at that plant.

As regards the term “new construction” above,

except for work done on equipment or systems

pursuant to a manufacturer’s warranty, work

that is of a peripheral nature to major new con-

struction, including major installation, major re-

placement and major reconstruction of equipment

and productive facilities and which does not con-

cern the main body of work shall be assigned to

employees within the bargaining unit when it is

more reasonable to do so taking into considera-

tion the factors set forth in paragraph C or it is

otherwise mutually agreed.

2. Work Outside the Plant

a. Should the Company contend that maintenance

or repair work to be performed outside the plant

or work associated with the fabricating of goods,

materials or equipment purchased or leased from

a vendor or supplier should be excepted from the

prohibitions of this Section, the Company must

demonstrate that it is more reasonable (within

the meaning of paragraph C below) for the Com-

pany to contract for such work (including the

52a

purchase or lease of the item) than to use its own

employees to perform the work or to fabricate

the items.

Notwithstanding the above, the Union recognizes

that as part of the Company’s normal business,

it may purchase standard components or parts

or supply items, produced for sale generally

(“shelf items’). No item shall be deemed a

standard component or part or supply item if its

fabrication requires the use of prints, sketches or

detailed manufacturing instructions supplied by

the Company or at its behest or it is otherwise

made according to detailed Company specifica-

tions. With respect to such items, the Company

may also purchase goods, materials, and equip-

ment, where the design or manufacturing exper-

tise involved is supplied by the vendor as part

of the sale.

b. Production work may be performed outside the

plant only where the Company demonstrates that

it is unable because of lack of capital available

in its USS Division to invest in necessary equip-

ment or facilities. In determining whether there

is capital to invest in particular equipment or fa-

cilities, the Union recognizes the Company’s right

to make reasonable judgments about the alloca-

tion of scarce capital resources among its plants

represented by the Union and their supporting

facilities.

3. Mutual Agreement

Work contracted out by agreement of the parties

pursuant to paragraph F below.

C. Reasonableness

In determining whether it is more reasonable for the

Company to contract out work than use its own em-

ployees, the following factors shall be considered:

58a

Whether the bargaining unit will be adversely im-

pacted.

The necessity for hiring new employees shall not be

deemed a negative factor except for work of a tem-

porary nature.

Desirability of recalling employees on layoff.

Availability of qualified employees (whether active

or on layoff) for a duration long enough to complete

the work.

Availability of adequate qualified supervision. Bar-

gaining unit employees in team leader positions

shall be considered in applying this factor.

Availability of required equipment either on hand

or by lease or purchase, provided that either the

capital outlay for the purchase of such equipment,

or the expense of leasing such equipment, is not an

unreasonable expenditure in all the circumstances at

the time the proposed decision is made.

The expected duration of the work and the time

constraints associated with the work.

Whether the decision to contract out the work is

made to avoid any obligation under the collective

bargaining agreement or benefits agreements asso-

ciated therewith.

Whether the work is covered by a warranty neces-

sary to protect the Company’s investment. For pur-

poses of this subparagraph, warranties are intended

to include work performed for the limited time nec-

essary to make effective the following seller guar-

antees:

a. Manufacturer guarantees that new or rehabili-

tated equipment or systems are free of errors in

quality, workmanship or design.

10.

11,

54a -

b. Manufacturer guarantees that new or rehabili-

tated equipment or systems will perform at stated

levels of performance and/or efficiency subsequent

to installation.

Warranties are commitments associated with a par-

ticular product or service in order to assure that

seller representations will be honored at no addi-

tional cost to the Company. Long-term service con-

tracts are not warranties for the purposes of this

subparagraph.

In the case of work associated with leased equip-

ment, whether such equipment is available without

a commitment to use the employees of outside con-

tractors or lessors for its operation and maintenance.

Whether, in connection with the subject work or

generally, the local union is willing to waive or has

waived restrictive working conditions, practices or

jurisdictional rules (all within the meaning of

“local working conditions’ and the authority pro-

vided by this Agreement).

Contracting Out Committee

At each plant a regularly constituted committee con-

sisting of not more than four persons (except that

the committee may be enlarged to six persons by

local agreement), half of whom shall be members of

the bargaining unit and designated by the Union in

writing to the plant management and the other half

designated in writing to the Union by the plant man-

agement, shall attempt to resolve problems in connec-

tion with the operation, application and administra-

tion of the foregoing provisions.

In addition to the requirements of paragraph E

below, such committee may discuss any other cur-

rent problems with respect to contracting out

brought to the attention of the committee.

55a

3. Such commitee shall meet at least one time each

month.

E. Notice and Information

Before the Company finally decides to contract out

an item of work, the Union committee members will be

notified. Except as provided in paragraph H_ below

(Shelf Item Procedure), such notice will be given in

sufficient time to permit the Union to invoke the Expe-

dited Procedure described in paragraph G below, unless

emergency situations do not permit it. Such notice shall

be in writing and shall be sufficient to advise the Union

members of the committee of the location, type, scope,

duration and timetable of the work to be performed so

that the Union members of the committee can adequately

form an opinion as to the reasons for such contracting

out. Such notice shall generally contain the information

set forth below:

1. Location of work.

2. Type of work:

a. Service

b. Maintenance

ce. Major Rebuilds

d. New Construction

Detailed description of the work.

Crafts or occupations involved.

Estimated duration of work.

Anticipated utilization of bargaining unit forces

during the period.

7. Effect on operations if work not completed in timely

fashion.

No later than May 1, 1987, Headquarters represen-

tatives of the parties shall develop a form notice for the

56a

submission of the information described above. Either

the Union members of the committee or the Company

members of the committee may convene a prompt meet-

ing of the committee. Should the Union committee mem-

bers believe a meeting to be necessary, they shall so re-

quest the Company members in writing within five (5)

days (excluding Saturdays, Sundays and Holidays) after

receipt of such notice and such a meeting shall be held

within three (3) days (excluding Saturdays, Sundays and

Holidays) thereafter. The Union members of the com-

mittee may include in the meeting the Union representa-

tive from the area in which the matter arises. At such

meeting, the parties should review in detail the plans for

the work to be performed and the reasons for contracting

out such work. Upon their request, the Union members

of the committee will be provided relevant information in

the Company’s possession relating to the reasonableness

factors set forth in paragraph C above. Included among

the information to be made available to the committee

shall be an opportunity to review copies of any relevant

proposed contracts with the outside contractor. This in-

formation will be held in complete confidence by each in-

volved Union representative. The Management members

of the committee shall give full consideration to any com-

ments or suggestions by the Union members of the com-

mittee and to any alternate plans proposed by Union

members for the performance of the work by bargaining

unit personnel. Except in emergency situations, such dis-

cussions, if requested, shall take place before any final

decision is made as to whether or not such work will be

contracted out.

Should the Company committee members fail to give

notice as provided above, then not later than thirty (30)

days from the date of the commencement of the work a

grievance relating to such matter may be filed under the

complaint and grievance procedure, except in the case of

production, service or maintenance work contracted for

performance outside the plant the thirty (30) day period

7 57a

shall begin running when the Union becomes aware or

reasonably should have known that such work has been

contracted out. Should it be found in the arbitration of

a grievance alleging a failure of the Company to pro-

vide the notice or relevant information in the Company’s

possession required under this paragraph E that such

notice or information was not provided, that the failure

was not due to an emergency requirement, and that such

failure deprived the Union of a reasonable opportunity

to suggest and discuss practicable alternatives to con-

tracting out, the Board shall have the authority to fashion

a remedy, at its discretion, that it deems appropriate to

the circumstances of the particular case. Such remedy,

if afforded, may include earnings and benefits to the

grievants who would have performed the work, if they

can be reasonably identified.

F. Mutual Agreement and Disputes

The committee may resolve the matter by mutually

agreeing that the work in question either shall or shall

not be contracted out. Any such resolution shall be final

and binding but only as to the matter under consideration

and shall not affect future determinations under this

Section. In addition, an agreement, including a grievance

settlement, reached prior to July 31, 1986 will continue

in full force and effect provided that such agreement ex-

pressly permits future contracting out and in exchange

for which the Company granted pensions under mutually

satisfactory conditions or other substantial consideration

(but excluding amounts expressly identified as backpay

for loss of earnings or other benefits).

If the matter is not resolved, or if no discussion is

held, the dispute may be processed further in accordance

with either of the following:

1. By filing a complaint relating to such matter under

the complaint and grievance procedure described in

58a

Section 6 within thirty (30) days from the date of

the Company’s notice, or

2. By filing a grievance relating to such matter within

five (5) days (excluding Saturdays, Sundays and

Holidays) from the date of the Company’s notice or

the date of the contracting out meeting, whichever

is later, and thereafter submitting that grievance to

the Expedited Procedure as set forth in paragraph

G, below.

G. Expedited Procedure

In the event that either the Union or Company mem-

bers of the committee request an expedited resolution of

a grievance arising under this Section, except paragraph

H (Shelf Item Procedure), it shall be submitted to the

Expedited Procedure in accordance with the following:

1. In all cases except those involving day-to-day main-

tenance and repair work and service, or emergencies,

the Expedited Procedure shall be implemented prior

to letting a binding contract.

2. Unless the parties agree otherwise, within five (5)

days (excluding Saturdays, Sundays and Holidays)

after the filing of a grievance, if either the Union or

Company determines that the grievance cannot be

resolved, either party (chairman of the grievance

committee in the case of the local union and the

manager of labor relations in the case of the Com-

pany) may advise the other party in writing that it

is invoking arbitration under this Expedited Proce-

dure and shall notify the Board. The party invoking

arbitration shall include with its written notice a

summary of the facts and arguments relied upon.

Within five (5) days (excluding Saturdays, Sundays

and Holidays) following receipt of such notice the

responding party shall provide the moving party

with a written summary of the facts and arguments

that it relies upon.

pee

59a

An expedited arbitration must be scheduled within

five (5) days (excluding Saturdays, Sundays and

Holidays) of such notice to the Board and heard at a

hearing commencing within ten (10) days (exclud-

ing Saturdays, Sundays and Holidays) thereafter.

The Board, or its appointee, shall hear the dispute.

The Board must render a decision within five (5)

days (excluding Saturdays, Sundays and Holidays)

of the conclusion of the hearing, which decision need

only succinctly explain the basis for the findings.

Shelf Item Procedure

No later than June 1, 1987, and annually thereafter,

the Company shall provide the Union members of the

committee with a list and description of anticipated

ongoing purchases of each item which the Company

asserts to be a shelf item within the meaning of para-

graph B-2-a above. Either the Union members or the

Company members may convene a prompt meeting

of the committee to discuss and review the list of

items and, if requested, the facts underlying the Com-

pany’s assertion that such items are shelf items.

The committee may resolve the matter by mutually

agreeing that the item in question either is or is not

a shelf item. With respect to any item as to which

the Union members of the committee agree with the

Company’s assertion that it is a shelf item, the Com-

pany shall be relieved of any obligation to furnish a

contracting out notice until the next review following

such agreement.

If the matter is not resolved, any dispute may be

processed further by filing, within thirty (30) days

of the date of the last discussion, a grievance in Step

2 of the complaint and grievance procedure described

in Section 6. Such a grievance shall include all items

in dispute.

60a

4. An item which the Company asserts to be a shelf

item, but which was not included on the list referred

to above because no purchase was anticipated, shall

be listed and described on a contracting out notice

provided to the Union not later than the regularly

scheduled meeting of the contracting out committee

next following purchase of the item. Thereafter, the

parties shall follow the procedures set forth in para-

graphs 2 and 3 above.

I. Annual Review

Commencing on or before May 1, 1988 and annually

thereafter, the Company committee members shall meet

with the Union committee members for the purpose of

(i) reviewing all work whether inside or outside the

plant which the Company anticipates may be performed

by outside contractors or vendors at some time during

the following calendar year and for which no mutual

agreement under paragraph F exists, (ii) determining

such work which should be performed by bargaining unit

employees and (iii) identifying situations where the

elimination of restrictive practices or conditions would

promote the performance of any such work by bargaining

unit employees. The Union committee members shall be

entitled in conducting this study to review any current or

proposed contract concerning items of work performed by

outside contractors and vendors and shall keep such in-

formation in complete confidence.

By no later than June 15 of each year these local

union and Company members shall jointly submit a writ-

ten report to the Union Chairman of USX Negotiating

Committee and the Vice President of Employee Relations

of USS Division or their designees. The report shall list

those items on which the parties disagree. The report will

state the reason for such disagreements.

As to individual items of work in dispute, the review-

ing parties may (i) resolve the dispute, (ii) refer their

6la

dispute to arbitration under a procedure to be established

by the parties and the Board of Arbitration or (iii) refer

the matters back to the plant without resolution in which

event the specific disputes will be handled under the pro-

visions of this section at the time they may arise.

J. District Director/Company Labor Relations Repre-

sentative

It is the intent of the parties that the members of the

joint plant contracting out committee shall engage in dis-

cussions of the problem involved in this field in a good-

faith effort to arrive at mutual understanding so that

disputes and grievances can be avoided. If either the

Company or the Union members of the committee feel that

this is not being done, they may appeal to the District

Director of the Union who has jurisdiction of the plant

in question and the appropriate representative of the

Company Headquarters for review of the complaint about

the failure of the committee to properly function. Such

appeal shall result in a prompt investigation by the Dis-

trict Director or his designated representative and the

Company’s labor relations representative designated for

such review. This provision should in no way affect the

rights of the parties in connection with the processing of

any grievance relating to the subject of contracting out.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.