Coordinating Committee Steel Companies v. United Steelworkers of America (436 F. Supp. 208, 1977)

OPINION

SNYDER, District Judge.

Plaintiff Steel and Iron Ore Companies have brought this action for a Temporary Restraining Order, Preliminary and Final Injunction, and money damages against the United Steelworkers of America (Steelworkers) with whom the Companies have negotiated Basic Labor Agreements (BLAs) covering approximately 330,000 employees in the steel industry and approximately 17,-500 employees in the iron ore industry. Through the Coordinating Committee Steel Companies (CCSC) the Steel and Iron Ore Companies bargained with the Steelworkers regarding wages, hours of work, and other terms and conditions of employment for employees represented by the Steelworkers. Jurisdiction of this Court is asserted under Section 301 of the Labor Management Relations Act of 1947, as amended (29 U.S.C. § 185). Hearing was held on the Preliminary Injunction.

In 1974, the Steel Companies entered into BLAs with the Steelworkers which continue unchanged until August 1, 1977. The parties also agreed to continue until 1977 an Experimental Negotiating Agreement (ENA-77) which provided for binding interest arbitration as the substitute for the right to strike or lockout as the terminal method of resolving collective bargaining matters, except those defined as local collective bargaining issues in Section D-5-a or those excluded from strike or lockout by Section D-6. In effect, ENA-77 looked forward to a resolution of all contract issues by April 15, 1977, and such issues not so resolved would be submitted to final and binding arbitration. On March 1, 1977, CCSC, on behalf of the Iron Ore Companies, made the ENA-77 and the Basic Steel Settlement Agreement (Settlement-77) binding upon the Iron Ore Companies under the terms of the “Memorandum of Agreement, 1977 Iron Ore Negotiations”. The expressed purpose and intent of ENA-77 was to prohibit industry-wide strikes, to achieve stability in the steel industry and to avert the strike-hedge steel inventory buildup and increased foreign steel imports which had preceded negotiations in the steel industry from 1959 (when the last industry-wide strike occurred) until 1973 (when the parties first utilized the Experimental Negotiation Agreement approach as a means of resolving collective bargaining issues).

An examination of the ENA-77 reveals that there was to be no strike, work stoppage or concerted refusal to work in support of the Union’s collective bargaining demands in the 1977 negotiations and the Plaintiff Companies agreed not to lockout their employees to support their contract bargaining positions; each party agreed that binding arbitration, rather than economic warfare, would be the method used for resolving disputes. An important exception to the express provision against strikes, stoppages or concerted refusals, however, is the provision in Subsection D-5. This exception relates to issues denominated as “local collective bargaining issues” which are defined as “an issue entered at plant level, proposing establishment of or change in a condition of employment at that particular plant” which would not (1) be inconsistent, involve any additions to, or modifications ch. the company agreement, (2) be an arbitrable grievance under the applicable basic labor agreement, and (3) relate to a grievance settlement or arbitration award (pertaining only to arbitrable grievances).

ENA-77 then provided in Section D-5b-(3) a requirement that the parties make every effort to settle the local bargaining issue by negotiation, but absent agreement by June 10, 1977, and if not withdrawn by the Union Co-Chairman, the issue would be submitted to a secret ballot strike vote of all employees at the involved plant. If the Local votes to strike, the Co-Chairman submits the matter to the International President, who must decide whether or not to authorize the strike by July 15, 1977.

The Union strongly urges that this “local issue” exception was a quid pro quo for its acceptance of interest arbitration. Before ENA, the Union could not strike at the plant level in support of local bargaining issues. Either the Union would strike industry-wide, or it could not strike at all. Consequently, pursuit of many local issues was frustrated by the bargaining structure because the Locals could not succeed in generating nation-wide enthusiasm for local problems. Thus, while on one hand ENA protects against industry-wide strikes and the disastrous consequences incident thereto, on the other hand it creates a new concept of local strikes to support local bargaining issues.

Pursuant to the terms of ENA-77, CCSC and the Steelworkers engaged in separate negotiations with the local representatives of the Union on local issues. Further, each Iron Ore Company was represented on an “Iron Ore Committee” of the CCSC which negotiated with the Steelworkers to resolve matters related primarily to the iron ore operations of such Company.

On April 9, 1977, an agreement was reached on all basic collective bargaining agreement issues and the Steelworkers and the CCSC entered into the Settlement-77, pursuant to which the 1974 BLAs between the Steelworkers and the Companies were, by incorporating negotiated changes, modified to become the new BLAs dated August 1, 1977. Part of the Settlement-77 provided for renewal of the binding interest arbitration agreement through the 1980 negotiations (ENA-80). Pursuant to the Settlement-77, some of the negotiated changes took effect May 1, 1977.

As contemplated by ENA-77, after settlement of all of the industry-wide issues, the negotiations continued on a multitude of local issues. By June 10, 1977, the date by which local unions were either to withdraw unresolved local demands or call a strike vote under ENA-77, all but 38 plants had completely settled their differences. Of the 38 plants taking strike votes, 33 Locals voted to strike in support of their still unresolved demands and were authorized to strike by Lloyd McBride, President of the International. The strike date for most plants is August 1, 1977. Of these 33 locations, 12 were basic steel plants or steel subsidiaries and 21 were ore mining operations. Since the strike votes and authorizations, negotiations have continued and all of the basic steel plants and all but three of the steel subsidiaries have reached agreements. Although negotiations are still in progress, Union officials believe there is little doubt that most of the remaining Locals will strike on August 1, 1977.

Thus, ENA-77 has effectively accomplished successful negotiations involving all but about 17,000 of the 350,000 employees at CCSC members’ facilities without economic warfare, and the threat of an industry-wide strike has been averted in 1977. From the outset of negotiations, however, one dispute has stymied the complete success of ENA-77. The local unions have entered demands at the local level and pursued them even after Settlement-77, which the Companies strongly assert are not properly “local collective bargaining issues” as defined in D-5 of ENA-77. They argue that some issues pressed at the local level would either be inconsistent with, modify or add to, Settlement-77, and that others are susceptible to arbitration under the existing applicable BLAs. They fear that if such issues can be pushed at the local level, the steel industry will be subjected to a “double jeopardy” in bargaining issues; first at the industry-wide level and then be required to deal with the same issues at the local level. Also, if non-local issues become strike matters in 1977, other Locals will be less restrained from striking over non-local issues in the 1980 negotiations, and the Companies’ customers will lose faith in the ability of ENA to avoid nationwide strikes in the steel industry and will once again build up steel inventories with foreign steel in “strike” years, to the detriment of CCSC members. Thus, the whole purpose of ENA would be defeated, injuring the interests of both the Companies and the Union.

The Steelworkers just as strongly urge that they have entered only local issues into the local plant negotiations and that the Companies are attempting to deprive them of their right to strike over issues to which they are entitled under ENA-77. They insist that their right to strike over such issues is fundamental to their participation in ENA and that any restraint of this right will lead to the demise of ENA.

The negotiation process has failed to resolve this dispute, and the Union has declined the Companies’ offer to arbitrate the question of which matters are local and which are not. Hence, the Companies have turned to the Court to enjoin the authorization of strikes and order the Union to arbitrate.

DISCUSSION

At the outset, the Court notes that its jurisdiction to enjoin union strikes is severely limited by the Norris-LaGuardia Act, Section 4 (29 U.S.C. § 104), which provides:

“No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent injunction in any case involving or growing out of any labor dispute to prohibit any person or persons participating or interested in such dispute (as those terms are herein defined) from doing, whether singly or in concert, any of the following acts: (a) Ceasing or refusing to perform any work or to remain in any relations of employment; * * * (e) Giving publicity to the existence ch. or the facts involved in, any labor dispute, whether by advertísing, speaking, patroling, or by any other method not involving fraud or violence; (f) Assembling peaceably to act or to organize to act in promotion of their interests in labor disputes; . . .”

The Act reflects the realization that court interference at such a critical stage very often would destroy the Union’s momentum and permanently settle the issue, even if the court decision later proved to be erroneous.

However, Section 301(a) of the Labor Management Relations Act (29 U.S.C. § 185(a)) demands an accommodation with Section 4 above, as defined in Boys Markets v. Retail Clerks Union, Local 770, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970), recently interpreted in Buffalo Forge Company v. United Steelworkers, 428 U.S. 397, 96 S.Ct. 3141, 49 L.Ed.2d 1022 (1976). This accommodation is based on the federal labor policy favoring arbitration and enforcement of a bargain between the parties to submit certain disputes to arbitration. Thus, under Boys Markets and Buffalo Forge, in addition to the general principles of equity, before an injunction can issue the court must first be satisfied that:

1. A collective bargaining agreement binds the parties and that the strike is in breach of a no-strike obligation in that agreement; and

2. The strike is over a dispute which the parties are bound to arbitrate under the agreement.

Buffalo Forge, supra.

Clearly, then, not all strikes may be enjoined, even if they are in violation of the collective bargaining agreements and the union may ultimately be liable in damages for its breach. Furthermore, the NorrisLaGuardia Act requires full testimony and specific findings before entry of injunction whenever the circumstances permit (See 29 U.S.C. § 107), and if the court does determine the strike is enjoinable and the equities require its injunction, the court’s injunction order must be coupled with an order that the company arbitrate the dispute forthwith. Boys Markets, supra.

The Companies here argue that this matter falls within the Boys Markets exception, and the Court therefore has jurisdiction to provide the equitable relief sought. They claim that the applicable BLAs in each instance contain mandatory grievance-arbitration provisions and unqualified no-strike clauses, and that these negotiation disputes are susceptible to arbitration under those provisions in the existing contracts. The Steelworkers contend they are not in violation of the contracts, and, even if they were, the underlying disputes are not arbitrable under the existing contracts and the Court lacks jurisdiction to enjoin the strikes.

The crux of the jurisdictional question, then, is whether the strikes authorized would be “precipitated by a dispute between union and management that was subject to binding arbitration under the provisions of the contract.” Buffalo Forge, supra, 428 U.S. at 406, 96 S.Ct. at 3146, 49 L.Ed.2d at 1030. The grievance-arbitration provisions of the various plant contracts here involved are typified by the provisions in the 1974 BLA applicable to United States Steel Corporation. The agreement states in pertinent part:

“. . . The provisions of this Agreement constitute the sole procedure for the processing and settlement of any claim by an employee or the Union of a violation by the Company of this Agreement. As the representative of the employees, the Union may process complaints and grievances through the complaint and grievance procedure, including arbitration, in accordance with this Agreement or adjust or settle the same. [Paragraph 0.2]

“The Union (its officers and representatives, at all levels) and all employees are bound to observe the provisions of this Agreement.” [Paragraph 4.2]

“There shall be no strikes, work stoppages or interruption or impeding of work. No officer or representative of the Union shall authorize, instigate, aid, or condone any such activities. No employee shall participate in any such activities.” [Paragraph 4.7]

“The applicable procedures of the Agreement will be followed for the settlement of all complaints or grievances.” [Paragraph 4.8]

“There shall be no lockouts.” [Paragraph 4.14]

“All complaints or grievances shall be considered carefully and processed promptly in accordance with the applicable procedures of this Agreement.” [Paragraph 4.15]

The Companies contend that these grievance-arbitration provisions are broad enough that many of the demands raised at the local level were susceptible to this mandatory procedure. The difficulty with their position is that the agreement, in reference to the grievance arbitrator’s jurisdiction, also provides:

“The Board shall have jurisdiction and authority only to interpret, apply or determine compliance with the provisions of this Agreement and such local working conditions as may hereafter be in effect in the mines of the Company, insofar as shall be necessary to the determination of grievances appealed to the Board. The Board shall not have jurisdiction or authority to add to, detract from, or alter in any way the provisions of this Agreement.”

The grievance-arbitration procedure in the BLAs is designed to resolve disputes about existing rights arising out of that contract, and the disputes herein question arise out of demands for new rights in future contracts.

The Companies attempt to get around this problem by arguing that the Court cannot say with positive assurance that these demands would “add to, detract from, or alter in any way” the existing agreement. Therefore, the complaints must be processed through the grievance-arbitration procedure (Citing United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 283 F.2d 93 (3rd Cir. I960)), even though at each stage of the process the Company would argue as a defense that the complaint would alter the existing contract, is not a proper grievance, and must be dismissed.

An example of an issue asserted by the Companies to be arbitrable under the BLAs is the demand for incentive coverage in the iron ore operations, the issue most adamantly pressed by the Locals and apparently a central issue in this lawsuit. Pursuant to a previous interest arbitration decision, 85% of the Steelworkers were included under incentive coverage, creating a disparity in the amount of pay between covered and non-covered employees. Non-covered employees were given bonuses of 10 $ per hour in the steel industry and 20$ per hour in the iron ore industry in their 1974 contracts, but this did not approach the approximated 85