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BEER, ETC., LOCAL NO. 744, ETC. v. VIERK CORP.

October 21, 1982

BEER, SOFT DRINKS, WATER, CARBONIC GAS & LIQUOR SALES DRIVERS, HELPERS, INSIDE WORKERS, BOTTLERS, WAREHOUSEMEN & GENERAL PROMOTIONAL REPRESENTATIVES, LOCAL NO. 744, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, PLAINTIFF,
v.
VIERK CORPORATION, DEFENDANT-COUNTERPLAINTIFF, V. BEER, SOFT DRINKS, WATER, CARBONIC GAS & LIQUOR SALES DRIVERS, HELPERS, INSIDE WORKERS, BOTTLERS, WAREHOUSEMEN & GENERAL PROMOTIONAL REPRESENTATIVES, LOCAL NO. 744, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, COUNTERDEFENDANT.



The opinion of the court was delivered by: Bua, District Judge.

OPINION AND ORDER

This case is brought under Section 301 of the Labor-Management Relations Act, 29 West Page 395 U.S.C. § 185. Jurisdiction is based on Section 301(a). Venue is proper under 28 U.S.C. § 1391.

FACTS

Plaintiff (the "Union") is an unincorporated labor organization whose principal office is located in Chicago, Illinois. Defendant (the "Employer") is an Illinois corporation having its offices in Harvey, Illinois. Defendant's business is the distribution of beer, primarily by the case.

Plaintiff and Defendant entered into a collective bargaining contract (the "agreement") effective from May 1, 1979 to April 30, 1982. The agreement sets out, inter alia, a detailed grievance procedure to be followed in the event that a grievance should arise. Under this procedure, set out in Article 47, any grievances relating to the discharge of an employee must be presented within five working days after the grievance arises. Upon notice of the grievance, the Employer and the Union have five working days to meet and reach a settlement regarding the matter. Should such a settlement not be reached within the time allotted, the matter is to be submitted to a Joint Committee comprised of two representatives of the Employer and two representatives of the Union. The Joint Committee is required to meet within seven days of notification of the matter and is required to reach a decision within three days thereafter. If the Joint Committee is deadlocked, the matter is, on election of either party, submitted to an arbitrator selected according to agreed upon procedures. The conclusions of the Joint Committee and the arbitrator are final and no strike or lockout is permitted pending a final determination.

The agreement further provides in Article 33, § 1(e), that no assigned distributor route shall be discontinued where an average of at least 1,000 cases per week have been sold during the preceding four-week period.

Vierk Corporation was formed in 1977 when Vierk Distributing acquired the rights to distribute additional brands of beer in the south suburbs of Chicago. Employees who previously had worked at Vierk Distributing were employed by Vierk Corporation to handle the new routes.

The makeup of Vierk Corporation is very similar to that of Vierk Distributing. The two have common physical facilities and within such facilities do not segregate their operations except by brand of beer. Further, numerous individuals, including the General Manager, the Warehouse Supervisor, and various clerical workers and mechanics hold identical positions with both companies. Finally, both companies are owned by the same individuals, the Vierk family, and share corporate officers.

It was decided that Vierk Corporation would shut down operations and transfer its routes to Vierk Distributing in late October, 1981. Apparently, having two separate entities was not as profitable as had been hoped. However, at no time did any of the seven Vierk Corporation routes fall below a delivery rate of 1,000 cases per week.

Before Vierk Corporation was closed, company and union officials met to discuss the proposed closing and the assumption of Corporation's routes by Distributing. At this time the Union refused to consent to any such action as Vierk Corporation's volume on the routes had not fallen below the base amounts specified in the agreement. In the meantime, Vierk Corporation employees were notified of the impending shutdown and that Distributing would be holding interviews for positions there.

The parties again conferred on October 28, 1981. Again, no agreement was reached. On the same day, a grievance was filed against Vierk Corporation for terminating the employees in violation of the agreement. As the Employer and the Union had been unable to reach an agreement in the prior meetings, a meeting of the Joint Grievance Committee was called and was held on October 30, 1981. At the meeting, Thomas Higgins, General Manager of both Vierk entities, presented the case for the company. In accord with general Committee policy, no attorneys were present at this meeting. Furthermore, no transcript of the proceedings was made.

At issue at the meeting was whether termination of the fourteen Vierk Corporation employees was in violation of Article 33, § 1(e) of the agreement. The Union argued that the agreement had been violated and that the closing of the Vierk Corporation was a subterfuge to circumvent the agreement. The company admitted that no routes had fallen under 1,000 cases per week as required by the agreement and that Vierk Distributing intended to assume the routes then held by Vierk Corporation as well as the distribution rights to the latter's brands. Finally, the company stated that it would hire six of Vierk Corporation's employees to cover Distributing's new business.*fn1

By unanimous decision, the Joint Committee decided to uphold the grievance, thereby determining that should Vierk Corporation follow through with the terminations of the employees, it would be in violation of the agreement. Notwithstanding this determination, however, no remedy was stated in the decision. By letter of November 2, 1981, Vierk was formally notified of the Committee's decision. Prior thereto, on October 30, 1981, at the end of business hours, the layoffs were effective and the business of Vierk Corporation was terminated.

The parties have filed cross motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff, in its motion, urges the Court to rule that the determination of the Joint Grievance Committee is valid, complete, and must be enforced by the reinstatement of the terminated employees and the payment of back pay. Defendant, on the other hand, requests the Court to uphold the determination of the Committee as written, that is, without remedy, or in the alternative, to vacate the decision of the Joint Grievance Committee. It is argued by ...


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