Phelps Dodge Magnet Wire Corp.

PHELPS DODGE MAGNET WIRE CORP. 346 NLRB No. 84 949 Phelps Dodge Magnet Wire Corporation and Interna- tional Union, United Automobile, Aerospace, and Agricultural Implement Workers of Amer- ica (UAW) and its Local 1807. Cases 26–CA– 18913–1 and 26–CA–19133–1 April 19, 2006 DECISION AND ORDER BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN AND SCHAUMBER The General Counsel of the National Labor Relations Board issued a consolidated complaint and notice of hearing dated January 17, 2002, upon charges filed by the International Union, United Automobile and Aero- space Workers of America (UAW) and its Local Union 1807 (the Union), alleging that Respondent Phelps Dodge Magnet Wire Corporation violated Section 8(a)(5) and (1) of the National Labor Relations Act by failing to bargain with the Union prior to laying off union officials pursuant to a super seniority provision contained in the parties’ governing employment terms. The complaint specifically alleges that the Respondent unlawfully laid off union bargaining committee members Donna Parker and Etherd Blake and Steward Jason C. Sumner without bargaining with the Union. The Respondent filed an answer denying the commission of unfair labor practices. On August 22, 2002, the parties entered into a stipula- tion of facts, and on August 27, 2002, the parties submit- ted a motion to transfer proceedings to the Board. The parties waived a hearing before an administrative law judge and agreed to submit the case directly to the Board for findings of fact, conclusions of law, and a Decision and Order, based on a record consisting of the charges, the consolidated complaint, the answer to the complaint, the Order postponing the hearing, the stipulation of facts, and the accompanying exhibits. On September 12, 2003, the Board approved the stipulation and transferred the proceeding to the Board. Thereafter, the General Coun- sel, the Union, and the Respondent filed briefs. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the entire record stipulated to by the parties and the parties’ briefs, and makes the following FINDINGS OF FACT I. JURISDICTION The Respondent is a division of Phelps Dodge Indus- tries, Inc., a Delaware corporation. At all material times, the Respondent maintained a facility in Hopkinsville, Kentucky, where it manufactures wire products. During the calendar year ending December 31, 1999, the Re- spondent, in conducting its business operations, pur- chased and received at its Hopkinsville, Kentucky facil- ity goods valued in excess of $50,000 directly from points located outside the State of Kentucky, and sold and shipped from its Hopkinsville facility goods valued in excess of $50,000 directly to points located outside the State of Kentucky. It is stipulated and we find that the Respondent is an employer engaged in commerce within the meaning of Section 2 (2), (6), and (7) of the Act, and that the Union is a labor organization within the meaning of Section 2 (5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. Facts The Union has represented a unit of production and maintenance employees at the Hopkinsville plant for many years, and the parties have negotiated a series of collective-bargaining agreements. Effective July 1, 1997 —following a good-faith impasse in bargaining for a successor contract to the parties’ 1993–1997 bargaining agreement—the Respondent lawfully implemented uni- laterally its final proposal. The implemented employ- ment terms included, among other things, a change with respect to the application of super seniority for union officials. Under the former super seniority provision, all mem- bers of the Union’s bargaining committee (who were directly involved in grievance handling and contract ad- ministration) possessed super seniority for purposes of layoff and recall, as did three stewards per shift. Under the newly implemented employment terms, “up to five” bargaining committee members and only one steward per shift possessed super seniority. The applicable provision is article 16.5. It states: Up to five members of the Bargaining Committee, and one Steward per shift, shall have top seniority in their respective areas for layoff and recall purposes only, and shall be retained or recalled provided they are qualified to perform an available job. Respective areas as used in this paragraph means the area that a Bargaining Committee member or a steward is elected to represent. Article 16.5 is part of the “Reduction and Recall” section of the employment terms contained in section 16. Section 16 sets forth terms concerning the application of seniority, bumping, recall from layoff and temporary layoffs, among other things. In November 1998, the Respondent notified the Union that it intended to curtail operations at the Hopkinsville plant and that there would be a permanent shutdown of some of the plant’s production equipment. Between No- vember 10 and 12, 1998, the Respondent laid off 92 unit employees. Among the laid-off employees were Donna DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 950 Parker, the Union’s recording secretary/bargaining com- mittee member; Etherd Blake, the Union’s financial sec- retary/bargaining committee member; and Jason Sumner, a third shift steward. All were qualified to perform jobs made available to retained senior employees. Prior to implementing the layoff, the Respondent did not notify the Union that Parker, Blake, and Sumner were being laid off or provide the Union with the names of employ- ees affected by the layoff. The Respondent did not dis- cuss with the Union any aspect of the application of arti- cle 16.5 in connection with these layoffs. Five union bargaining committee members were re- tained after the layoffs. These five had sufficient regular seniority to avoid being affected by the layoff without having to use “top seniority” as provided above in article 16.5. Chief Steward Kenneth Bates was among those retained. He formerly worked on the second shift, but displaced a junior employee on the third shift. Swing Shift Steward Albert Gold was also retained. Gold dis- placed a junior employee on the third shift, but did not serve as the third shift steward. On November 13, 1998, the Union objected to the Re- spondent’s selection of union officers for layoff. The Respondent replied that it complied fully with article 16.5 because, under its terms, five union committee members were retained, as required under that provision. On March 1, 1999, the parties entered into a new col- lective-bargaining agreement. The new agreement states that all of the “members of the [Union’s] bargaining committee, and one steward per shift” shall have top sen- iority for layoff and recall and shall be retained or re- called if qualified to perform an available job. On March 8, 1999, Parker and Blake were recalled. The Respon- dent offered Sumner reinstatement on November 19, 1999, but he declined the offer. B. The Arbitration On November 17, 1998, and January 25, 1999, the Un- ion filed grievances concerning the layoffs of the union officers and the failure to recall Blake. The Union did not seek arbitration of the Respondent’s denial of these grievances. On February 26, 1999, the Union filed a grievance alleging that the Respondent breached article 16.5 of the employment terms by selecting Parker, Blake, and Sumner for layoff. Thereafter, arbitrator Frank Keenan sustained the Union’s grievance. The arbitrator found that the Respondent erred when it construed article 16.5 as simply a declaration that, after a layoff situation, the Union was guaranteed up to five bargaining commit- tee members still working in the work force. He found that article 16.5 meant that if a layoff succeeded in reach- ing up to five members of the bargaining committee, each could use super seniority to avoid layoff. Here, the layoff reached only two bargaining committee members and, therefore, both were entitled to exercise super sen- iority. As to Steward Sumner, the arbitrator found that he was entitled to “hold” his shift and that the Respon- dent was not entitled to replace Sumner with a steward from another shift. In sustaining the grievance, the arbi- trator found that the layoffs were implemented in good faith and in accordance with the Respondent’s perception of what the employment terms required. He found that the case “is essentially about the rectitude of that percep- tion.” In fashioning a remedy, the arbitrator awarded back- pay to Blake and Parker only from February 26, 1999— the date the grievance was filed—to March 1, 1999, the date of recall. As to Sumner, the arbitrator awarded backpay from February 26, 1999, to March 6, 2000, the date the arbitrator found was the due date for his award. The award was rendered on September 15, 2000. The arbitrator found that had the grievance been filed earlier in relation to the underlying events, the Respondent would have been on notice of its alleged violation and would have had an opportunity to mitigate its potential liability. C. Contentions of the Parties The General Counsel contends that this case does not involve a dispute over contract language. According to the General Counsel, article 16.5 does not identify which bargaining committee members will receive super senior- ity and the Respondent had a duty to bargain over the provision’s application. The General Counsel also con- tends that the arbitrator’s award is palpably wrong and repugnant to the Act because the arbitrator’s remedy tolled backpay based on arbitrary considerations. The Union contends that the Respondent unilaterally changed the employment terms applicable to seniority and super seniority. Additionally, the Union contends that the Respondent unlawfully failed to furnish informa- tion when it did not provide the Union with a list of laid- off employees before the layoffs occurred. The Respondent contends that the dispute at issue turns on the interpretation of the layoff provisions set forth in section 16 of the employment terms. It contends that it had a sound arguable basis to interpret the provi- sion as it did and that the General Counsel’s theory de- pends on a contrary plausible interpretation. The Re- spondent contends that there is not a statutory bargaining violation in such circumstances. It also contends that, because there is no unfair labor practice, there is no rea- son to address the arbitrator’s remedy. PHELPS DODGE MAGNET WIRE CORP. 951 D. Discussion As noted, the General Counsel contends that this case does not involve a dispute over contract language. Thus, the General Counsel argues that there has never been any bargaining between the parties as to how the five officers entitled to super seniority were to be chosen and, there- fore, the Respondent was obligated to bargain over the application of super seniority prior to the layoffs. It is true that the employment terms were unilaterally implemented by the Respondent, after a lawful impasse in bargaining was reached, and were not consented to by the Union. Thus, the employment terms do not consti- tute a collective-bargaining agreement. Nevertheless, no party to this proceeding disputes that the employment terms lawfully were in effect, and served as the govern- ing terms and conditions of employment for the unit em- ployees, at the time of the Respondent’s actions in this case. Indeed, the Union filed a grievance, and invoked arbitration, based on those terms. Thus, for purposes of this proceeding, we believe that it is appropriate to treat the employment terms as if they were a contract and to regard the dispute here as essentially one of contract in- terpretation. This matter was arbitrated under the grievance- arbitration procedure set forth in the employment terms1 and no party contested the arbitrability of the instant dis- pute. Indeed, this matter was deferred to contract arbitra- tion by the Board’s Regional Office under Dubo Mfg. Corp., 142 NLRB 431 (1963), and the arbitrator found that the union officers at issue were contractually entitled to super seniority under the provisions of the governing employment terms. The General Counsel contends that the present case is similar to Fritz Cos., 330 NLRB 1296 (2000), but that case is distinguishable. There the Board found that an employer violated Section 8(a)(5) and (1) when it failed to bargain prior to implementing layoffs, rejecting the employer’s claim that it was privileged to undertake the layoffs pursuant to a previous letter of understanding. But, as the Board found, the letter of understanding in Fritz did not address layoff procedures or the application of seniority to layoffs. 330 NLRB at 1297. Accordingly, the parties were obligated to bargain anew over matters not previously bargained. Here, in contrast, section 16 of 1 Sec. 16 of the governing employment terms sets forth a detailed mechanism for layoffs, reductions in force, and recalls from layoff. Art. 16.5 expressly governs the application of super seniority. Further, the governing employment terms set forth a procedure for resolving disputes regarding sec. 16. Under sec. 17, the parties are subject to a grievance procedure “with respect to the interpretation or application of the provisions of these employment terms in connection with an alleged violation of these employment terms,” culminating in arbitration. the employment terms addresses layoff procedures and the application of seniority and article 16.5 addresses the application of super seniority. Section 17, in turn, sets forth a grievance-arbitration procedure for resolving dis- putes regarding section 16. The Respondent and the Un- ion followed those provisions. The Union contends that the Respondent unilaterally modified the employment terms. But, as stated, it is ap- propriate to treat the employment terms as if they were a contract and to regard the dispute here as essentially one of contract interpretation. In such cases, the 8(a)(5) alle- gation turns on whether the employer has a sound argu- able basis for its interpretation of the contract. See, e.g., Crest Litho, 308 NLRB 108, 110 (1992); Vickers, Inc., 153 NLRB 561, 570 (1965). “Where . . . the dispute is solely one of contract interpretation, and there is no evi- dence of animus, bad faith, or an intent to undermine the Union, we will not seek to determine which of two equally plausible contract interpretations is correct.” Atwood & Morrill Co., 289 NLRB 794, 795 (1988). Here, the Respondent interpreted article 16.5 to mean that up to five union bargaining committee members and one steward per shift shall be retained in the event of a layoff. The initial clause of article 16.5 refers to “up to five” committee members and one steward per shift, and the final clause of the same sentence states that those members and stewards “shall be retained or recalled.” The Respondent interpreted article 16.5 as literally re- quiring retention of that number of members and stew- ards. Because a sufficient number of officers was re- tained based on the officers’ regular seniority, the Re- spondent determined that article 16.5 was satisfied, that is, up to five committee members and one steward per shift were still at work following the layoffs. The arbitrator rejected that interpretation. He found that the Respondent’s interpretation gave inadequate weight to the clause in article 16.5 that links the five members and one steward per shift to “top seniority in their respective areas.” The arbitrator found that “up to five” meant that up to five (plus one steward per shift) are entitled to super seniority—not simply the right to retention under normal seniority. Although he found that the Respondent’s interpretation was incorrect, the arbitra- tor specifically found that the Respondent did not act in bad faith. We find that, although the Respondent’s construction of article 16.5 may have been erroneous, its interpreta- tion had a sound arguable basis. As the arbitrator noted, the Respondent acted in good faith, based on its interpre- tation of the employment terms. Further, as the arbitrator found, the Respondent “simply erred” when it construed article 16.5 as a declaration that the Union was guaran- DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 952 teed the retention of up to five bargaining committee members (and stewards) after a layoff, rather than as a statement that up to five committee members could exer- cise top seniority. In our view, article 16.5 is not a model of clarity and either interpretation was plausible, even if the latter interpretation ultimately prevailed in arbitration. In these circumstances, we find that the General Coun- sel has failed to prove that the Respondent modified the employment terms within the meaning of Section 8(d) of the Act, in violation of Section 8(a)(5) and (1). Finally, because the Respondent’s interpretation does not rise to the level of a statutory violation, it is unnecessary to con- sider the propriety of the arbitrator’s remedy. That rem- edy pertains only to a breach of contract and not to the commission of unfair labor practices. 2 ORDER The complaint is dismissed. 2 The complaint does not allege that the Respondent failed to furnish information in violation of Sec. 8(a)(5). Accordingly, we find it unnec- essary to address the Union’s contention that the Respondent violated the Act by failing to furnish information.