Appeal from the United States District Court for the Central District of Illinois. No. 83-1268 - Michael M. Mihm, Judge.
Before CUMMINGS, Chief Judge, WOOD, Circuit Judge, and WYATT, Senior District Judge.*fn*
In this appeal, we are asked to determine whether the district court correctly concluded that a grievance filed by the Teamsters, Chauffeurs, and Helpers Local Union No. 627 (the "Union") is not subject to arbitration under the collective bargaining agreement between R.J. Distributing Company ("R.J.") and the Union.
On May 1, 1983, the Union executed, as it had for the preceding twenty years, a collective bargaining agreement with a number of companies, collectively, the Beer and Liquor Distributors of the Peoria, Illinois area. R.J. is a member of this multiemployer bargaining group. The Union represents the employees of the signatory companies. Pabst Brewing Company, which had been a member of this multiemployer bargaining group since at least 1971, withdrew in 1977. Since 1977, Pabst has negotiated and executed separate agreements with the Union.
In 1971, the Union and the Beer and Liquor Distributors negotiated "Sale of Assets" provisions which have been included in substantially the same form in all subsequent agreements between the parties. The "Sale of Assets" provisions of the 1983 agreement between the Union and the Beer and Liquor Distributors read as follows:
In the event the Company, party to this Agreement, acquires work or performs services previously performed by a company not party to this Agreement, then in that event, the employees of such company not party to this Agreement shall have no rights under this Agreement, including, specifically, the right to go with the work and acquire seniority under the terms and provisions of this Agreement, except as new employees.
In the event that this Company, party to this Agreement, acquires work or performs services previously performed by another company who is also a party to this Agreement, then in that event, the employee so affected shall have the right to follow the work, and shall retain benefits and rights previously in effect with their former Company.
The corresponding sections of the 1983 agreement between the Union and Pabst are identical.
On August 9, 1983, Pabst and R.J. entered into an agreement whereby R.J. agreed to purchase Pabst's distribution operation in the Peoria area. On August 25, 1983, the Union filed a grievance against R.J., claiming that under section 21.2 of the 1983 agreement between the Union and the Beer and Liquor Distributors, the Pabst employees were entitled to employment with R.J. and to retain the benefits and seniority they had acquired during their employment with ...