The opinion of the court was delivered by: Bua, District Judge.
This case is brought under Section 301 of the Labor-Management
Relations Act, 29
395 U.S.C. § 185. Jurisdiction is based on Section 301(a). Venue is
proper under 28 U.S.C. § 1391.
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
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 ...