Industries and United
Steelworkers of America
OPINION AND AWARD
In the matter of Arbitration
Industries, Inc., Employer
Steelworkers of America
Case No. 06-02896
An arbitration hearing was conducted on July 13, 2006 at Augusta, Georgia.
At the hearing the parties jointly submitted the collective bargaining agreement and the grievance trail as joint exhibits. Even though the grievance on its face listed a violation of Article III, the Union asserts a violation of Article IX Section 2. The Union proposed the issue be stated as: “Did the company violate Article IX of the Labor Agreement? If so, what shall the remedy be?” After examination of the Union president Garrett Perry, management agreed to this issue.
In addition to the joint exhibits and verbal testimony, the Union submitted ten documents outlining the chronology of events giving rise to this grievance. Both parties timely submitted post hearing briefs. All materials were reviewed and considered by the Arbitrator in reaching this decision.
Both parties were given full opportunity to examine and cross examine witnesses, pose arguments and present their respective cases. Both sides did so professionally and competently.
The parties agreed that the matter was properly before the Arbitrator for determination. The Arbitrator requested permission to submit the award for consideration for publication and permission was granted.
RELEVANT COLLECTIVE BARGAINING PROVISIONS:
PURPOSE OF AGREEMENT
The general purpose of this Agreement is to promote the mutual interests
of the Company and its employees and to provide for the operation
of the Company's plant under methods which will further,
to the fullest extent possible, the safety and welfare of the employees,
economy and efficiency of operations, elimination of waste, realization
of maximum quantity and quality of output, cleanliness
of the plant and protection of life and property. It is recognized
by this Agreement to be the duty and obligation of the Company
and of its employees to cooperate fully, both individually
and collectively, for the advancement of said purposes and
Company reserves the right to establish new job classifications or to combine
or eliminate jobs for the purpose of plant economy or efficiency. When major changes
are made in the plant which creates a new job or substantially changes
the duties of an existing job, the Company
will carefully evaluate the situation and promptly.
notify the Union of the rate for the new or changed job.
The Union shall then have the
full right and privilege of negotiating
with the Company concerning such new wage rate. However, if the parties cannot
agree on a satisfactory rate for the new or
changed job, the Company may implement its rate and the matter may be the
subject of further negotiations at the
next general Contract negotiations.
Any rate agreed upon between the parties for a
new or changed job during the term of this Agreement shall be made
retroactive to the date of the job change which
occasioned the rate adjustment. The establishment of
wage rates shall not be a subject of arbitration.
May 26, 2005
the company informed the Union president that it intended to reorganize and
combine a number of jobs. President Perry sent a memo to the company on May
27, 2005 requesting more time to consider the issues presented.
General Manager Posey informed the Union the same day that “the
implementation of the organizational changes at Deerfield will be postponed
until June 13, 2005 per the Union’s request.
Meeting with the company and Union to be scheduled the week of June 6,
June 13, 2005 International Representative Thomas requested the company
provide the Union with additional information regarding the proposed changes
and the rates to be paid for the new positions. 
company responded on June 30, 2005 stating that the company estimated saving
to be $300,000 per year. The
company noted that the estimate “is based on the cost of avoidance of hiring
6 people to fill existing vacancies.”
wage rates, the company stated: “the company has considered wages rates for
the job changes and does not believe the changes warrant an adjustment at this
president Perry next filed an unfair labor practice charge with the National
Labor Relations Board (NLRB) asserting “On
June 13, 2005 the Company unilaterally implemented work schedules and dept.
changes and job changes without bargaining with the Union.
This is unfair and breach of our Contract agreement.” 
to the filing of the unfair labor practice charge, the parties entered into a
settlement agreement. In that
agreement the employer agreed to negotiate with the Union on the rates to be
paid to employees who perform the new and revised positions. The settlement
agreement was signed by the company August 23, 2005, by the Union August 29,
2005 and by the Regional Director of the NLRB August 30, 2005.
a memo dated November 23, 2005 Richard Posey, Deerfield General Manager
notified G.H. Perry, Union president, that
“PER ARTICLE IX AGES, ITEM 2, OF THE LABOR
AGREEMENT, WHEN MAJOR CHANGES ARE MADE IN THE PLANT WICH CREATES A NEW JOB
OR SUBSTANTIALLY CHANGES THE DUTIES OF AN EXISTING JOB, THE COMPANY WILL
CAREFULLY EVALUATE THE SITUATION AND PROMPTLY NOTIFY THE UNION OF THE RATE OF
THE NEW OR CHANGED JOB.
Mr. Perry indicated that the Union did not
accept the proposal on November 26, 2005. 
On December 5, 2005 Union president Perry
offered a hand written counter proposal with Beater Engineers receiving $20.00
per hour, Beater Helpers $20.00 per hour, Rewinder Helpers $18.00 per hour and
Janitor $16.00 per hour.
The company countered the next day, December
6, 2005 offering Beater Engineers - $17.955, Beater Helper - $16.710, Rewinder
Helper - $16.125 and Janitor $14.545. The
Union rejected the same day.
February 21, 2006 the company notified
informed the Union president “Bill: unless I hear back from you by Friday
the company will implement wage rate increase.”
The increases were the same as those proposed by the company on
December 5, 2005 with the notation that increases would be retroactive to June
13, 2005. 
The grievance in this matter was actually
filed June 13, 2005. The
requested remedy stated “For the
implementation to be withdrawn and all employees be returned to their normal
Dept. and duties as scheduled in our Contract Agreement. And furthermore stop
violating our Contract Agreement.”
OF THE UNION:
The Union asserts that the Company violated
the Contract when it fair to notify the Union of the new rate for the changed
The Union notes that even though the
reorganization took place on June 13, 2005 the Company did not make an offer
on wage rates until November 23, 2005.
When no agreement was reached on wage rates the Company implemented its
last offer on February 21, 2006 and retroactive payments were not made until
March 29, 2006.
The Union requests the Arbitrator withdraw
the implemented changes, return the employees to their former positions and
make them whole.
OF THE COMPANY:
The Company argues that the Union changed its
position of the alleged violation from Article III – Recognition Clause as
originally stated on the grievance, to Article IX Section 2.
The Company states that both parties agree
the proper issue before the Arbitrator relates to Article IX Section 2.
The Company explains that the actions taken
were in response to two successive years of increasing losses and their desire
to avoid layoffs.
General Manager Posey testified that as early
as November 2004 a meeting was held with all employees outlining the financial
situation of the Plant.
It was felt the combination and elimination
of some classifications might return the Company to profitability.
The Company argues that meetings were held
with the Union and the International Representative keeping the Union informed
of the proposed changes and their motivation.
The Company notes that at the arbitration
hearing, Union President Perry admitted that the Company had the right under
Article IX to implement the changes made to the classifications in question.
It is the position of the Company that the
clear language of Article IX gives them the right to take the actions they did
and that the Union has failed to prove any violation of the Contract.
is unusual for an arbitrator to consider and decide an issue that differs from
that listed in the initial grievance. In
this case the initial grievance cited a violation of Article III of the
Collective Bargaining Agreement, but at the hearing the parties mutually
agreed that the issue before this Arbitrator is “Did
the Company violate Article IX of the Collective Bargaining Agreement? If so,
what shall the remedy be?”
Arbitrators serve at the pleasure of the
parties which select them and thus this award will be limited to the alleged
violation of Article IX.
It is easy to understand the positions of
The Company, in an effort to stem rising losses, entered into a
combination and realignment of classifications.
The Company is to be commended for its desire to avoid layoffs.
The action taken by the Company seemed unfair
to the employees. Their job
duties were being changed, duties were being added to some positions and they
wanted their Union to do something about the situation.
Even though Article III is not at issue in
this arbitration, I feel I must comment on the role it has played in this
proceeding. Someone apparently
reviewed that section of the Agreement and concluded that the process outlined
for negotiating midterm changes to the Collective Bargaining Agreement also
applied to proposed changes in the organization of the work and job system.
In light of the emotions that come to play in
such situations and the shared sense of industrial justice held by many union
members, it is easy to see why such a belief existed.
The language of Article III clearly does not
apply to this situation in that no request to change the language of the
Collective Bargaining Agreement has been made.
The Union, apparently with the advice and
assistance of their International Representative, wisely amended their claim
to deal with the section of the Collective Bargaining Agreement that does
govern in this situation. (Article
IX). The Company and the Union
are to be commended for being willing to go forward with the amended issue
rather than engage in procedural wrangling. All parties will be better served by dealing with this long
It is apparent from the testimony and
evidence that the initial desire of the Union was to reverse this very
unpopular decision made by the Company.
The task of the Arbitrator is to answer the
question posed by the parties. Usually
in contract interpretation cases the parties have a substantial disagreement
about the meaning of a specific clause or article.
The meaning and clarity of the language has to be examined to reach a
I am limited to a consideration of Article
IX, Section 2 and in this case the parties do not appear to disagreement of
the meaning of the first part of that clause.
In this case there is no disagreement among
the parties that the statement: “The Company reserves the right to establish new job classifications
or to combine or eliminate jobs for the purpose of plant economy or
efficiency” grants the Company the right to take the action that it did
even though the Union disagrees with that action.
have to agree, the Collective Bargaining Agreement clearly gives the Company
the right to “combine and eliminate jobs.”
order for the arbitration process to have credibility the arbitrator must
apply clear and unambiguous language as it is written.
other exercise of arbitral authority makes a mockery of the process.
well accepted textbook on arbitration practice, “Fairweather’s Practice
and Procedure in Labor Arbitration” states: “when
contract language is clear and unambiguous, arbitrators will apply its plan
meaning and will not look outside the four corners of the document to
ascertain the intentions of the parties.” 
is a well accept practice among the vast majority of arbitrators
Karyl Elinski, in a very recent case, wrote: “As
in all contract interpretation questions, the arbitrator should look to the
terms of the agreement.” 
dealing with a health care issue, Arbitrator Jack Calhoun wrote: “The
language in this case is plain and clear.
It was carefully drafted to clarify that the Employer would not be
responsible for any amount above the cost of the health insurance premium.” 
reach the same conclusion in this case. The
language of Article IX is clear and unambiguous.
The Contract gives the Company the right to do what it has done
notwithstanding the view of the Union that the action appears wrong and
us turn then to consideration of the establishment of pay rates.
record would indicate that the Company first did not believe the new
configuration of jobs required any pay adjustments.
The June 30, 2005 letter from Mr. Posey to Richard Thomas states “…the
Company has considered wage rates for the job change and does not believe the
changes warrant an adjustment at this time.”
the filing of the Unfair Labor Practice Charge and the settlement of that
matter the parties did enter into bargaining about the pay rates.
Proposals and counter proposals were exchanged and no agreement was
February 2006 the Company unilaterally imposed its final offer and payment was
paid retroactive to June 13, 2005.
IX, Section 2 deals with the possibility of a stalemate in the negotiation of
new pay rates. If agreement cannot be reached, “then
the company may implement its rate and the matter may be subject of further
negotiations at the next general contract negotiations.”
appears to this arbitrator that this process has been properly followed but
even if it has not the issue is clearly barred from consideration by this or
any arbitrator by contract language that states: “The
establishment of wage rates shall not be a subject of arbitration.”
remaining issue relates to the contract provision that states: “When
major changes are made in the plant which creates a new job or substantially
changes the duties of an existing job, the Company will carefully evaluate the
situation and promptly notify (emphasis added)
the Union of the rate for the new or changed job.”
the Company can contend that their letter of June 30 2005 fulfills the
requirements of this section of the Contract when it states “The
Company has considered wages rates for the job changes and does not believe
the changes warrant an adjustment at this time.”
Arbitrator views that as a weak argument.
Apparently at some time the Company reached the same conclusion when
they agreed to settle the pending ULP and enter into negotiations regarding
like “promptly notify” are difficult to decide without further definition. Factors considered in considering such provision include past
practices of the parties or damage caused by the delay.
this case no evidence was presented demonstrating any practice in a similar
situation and any damage caused was remedied by the retroactive payment of the
new pay rates.
does appear to the reasonable observer that a long delay took place before
engaging in negotiations regarding pay rates.
Posey explained that the delay was due, in part, to the pending challenges
filed by the Union (ULP and grievance).
problem is that even if the Union achieves a technical victory regarding the
interpretation of the language in question, there is no effective way to
remedy that alleged violation since the record indicates retroactive payment
has been made.
Union believes this perceived error should lead to a total reversal of the
actions of the Company.
must flow from the collective bargaining agreement.
The Supreme Court, while giving arbitrators broad authority in
fashioning remedies, still places firm restrictions on arbitral authority.
“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 a problem.
This is especially true when it comes to formulation of remedies.
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 contingency. Nevertheless,
an arbitrator is confined to interpretation and application of the collective
bargaining agreement; he does not sit to dispense his own brand of industrial
justice. He may of course look
for guidance from many sources, yet his award is legitimate only so long as it
draws its essence from the collective bargaining agreement.”
this case if I were to determine the Company did not comply with the “prompt
notification provision of the Contract, I would still lack the authority to
reverse the actions taken by management.
Barry J. Baroni, in dealing with a class action case related to drug testing
stated: “It is the arbitrator’s belief that the remedy request is not only
unreasonable, but inappropriate.” 
requested remedy in this matter does not flow from the essence of the
Collective Bargaining Agreement and is unreasonable even though the Company
could have been more timely in its actions to establish and attempt to
negotiate pay rates with the Union.
The Collective Bargaining Agreement permits
the Union to continue the discussion of pay rates at the next general contract
negotiations if it is still in disagreement.
For the reasons herein stated, the grievance
Issued at London, Ohio this third day of October, 2006
 There is some confusion regarding whether this meeting took place on May 25 or May 26.
 Union exhibit 1.
 Union exhibit 2
 Union exhibit 3
 Union exhibit 4
 Union exhibit 6
 Union exhibit 7
 Union exhibit IX
 Fairweather’s Practice and Procedure in Labor Arbitration, 443 (Ray J. Schoonhaven, ed. 4th ed., 1999)
 Olympia School District and Teamsters Local 252, (122 LA 1191), June 19, 2006
 Polson School District Board of Trustees and Polson Classified Employees Association, MEA-MFT, (122 LA 609) May 9, 2006
 Steelworkers v. Enterprise Wheel & Car Corp. 80 S.Ct. 1358, 46 LRRM 2423 (1960).
 In re Metropolitan Transit Authority of Harris County Texas and Transport Workers Union Local 260, (96 LA 655) 1991.
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