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Swatts v. United Steelworkers of America

decided: December 19, 1986.


Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division, 81 C 780 -- S. Hugh Dillin, Judge.

Author: Cudahy

Before CUDAHY and COFFEY, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

CUDAHY, Circuit Judge. Plaintiffs are 59 former employees of Edgcomb Metals Company's ("Edgcomb") Indianapolis plant. In 1980 they accompanied their union, defendant United Steelworkers of America (the "Union"), in a strike against Edgcomb's seven plants. The strike was unsuccessful. Edgcomb hired replacement workers and forced the Union into concessions. Plaintiffs lost their jobs. After the strike plaintiffs filed suit against the Union, alleging, inter alia, that the Union had breached its duty of fair representation by misrepresenting whether plaintiffs could lose their jobs by striking and whether the company could retain replacements hired during the strike. Plaintiffs also alleged that the Union had committed an unfair labor practice and breached its duty of fair representation by bargaining to impasse over the inclusion of two Edgcomb plants in North Carolina in the union-employer "master" collective bargaining agreement. The district court granted the Union summary judgment on the misrepresentation issue and found for the Union after a bench trial on the bargaining to impasse issue. We affirm.

In 1978 Edgcomb acquired five steel service centers from Jones & Laughlin Steel Company, including a service center in Indianapolis, Indiana. The Union was the collective bargaining representative for these plants. At the time of Edgcomb's acquisition, the five plants were covered under a single "master" collective bargaining agreement between the Union and Jones & Laughlin. Edgcomb agreed to honor this contract until it expired in October 1980.

Edgcomb also operated two plants in North Carolina that were not covered under the master contract. Elections at these plants in 1979 made the Union the bargaining agent for these plants as well. In its initial negotiations with Edgcomb regarding a new contract for the five former Jones & Laughlin plants, the Union sought to include the North Carolina plants under the same master contract. Edgcomb, by contrast, not only resisted including the North Carolina plants in a master contract, but sought to eliminate the master contract entirely and instead negotiate separate contracts for the individual plants.

Several meetings between the Union and Edgcomb failed to resolve differences over the scope of the contract. Additionally, the company told the Union it would no longer agree to cost of living allowances. In September 1980, the Union polled its members, who voted to strike if a collective bargaining agreement was not obtained by the expiration date. On September 30, 1980, the day before the termination of the Jones & laughlin contract, the Union advanced a proposal which stated, inter alia,

The Union withdraws any proposals or implied suggestions that the Greensboro and/or the Charlotte, North Carolina operations be covered in any way by the renewal of the Master Agreement. Nor is the Union requiring as a basis for a settlement of the Master Agreement that a separate Agreement be reached at either the Company's Greensboro and/or Charlotte, North Carolina Operations.

Union's Contract Offer to Edgcomb, Sept. 30, 1980, Appellee's Supplemental Appendix at 1.

Edgcomb rejected this offer and on October 1, 1980, the Union commenced a strike at all seven plants. On that day, Edgcomb sent the strikers a letter indicating that it had the right to hire and retain replacements. Soon afterwards, Edgcomb in fact did hire replacements for the Indianapolis plant. During the course of the strike numerous offers were considered and rejected by both sides. The Union sent many letters to its members exhorting them to stand firm. In December 1980, an Edgcomb vice-president sent strikers at the five former Jones & Laughlin plants a letter stating that the Union had rejected an Edgcomb offer, among other reasons, because "any settlement [of the strike at the five Jones & Laughlin plants] was dependent upon a prior settlement of contracts for employees at Edgcomb's Charlotte and Greensboro Plants." Hugh H. Williamson III, Letter to Edgcomb Employees, Appellants' Appendix 2 at 27.

The Union demanded that Edgcomb fire the replacement workers while Edgcomb insisted they be retained. In February 1981, Edgcomb stated that it was making a permanent reduction in force and that strikers returning to work would have to accept the jobs available. Additionally, the company stated that strikers could not use their seniority to bump new employees except in the event of a further reduction in force. The Union rejected these terms.

On March 4 and 5, 1981, 23 strikers at the Indianapolis plant crossed the picket line, leaving 67 employees remaining on strike. Soon after, the Union officials met and concluded that the strike had failed. On March 17, 1981, the Union and Edgcomb agreed upon separate but identical contracts for the five Jones & laughlin plants. The replacement employees were to keep their jobs. Strikers who unconditionally offered to return were to be placed on a recall list. Previous seniority was to mean nothing as to recall unless a layoff occurred after the settlement.

In July 1981, plaintiffs filed a six-count suit against the Union. They claimed the Union: 1) misrepresented the company's right to hire permanent replacements during the strike, 2) misrepresented available strike fund benefits, 3) failed to accept an offer to extend the contract term for 90 days before striking, 4) bargained to impasse over a nonmandatory issue -- including the two North Carolina plants in the master contract, 5) influenced favored workers to cross the picket line and return to work, and 6) improperly agreed to methods of recall following the strike. The Union moved for summary judgment on all six counts. The court granted the Union's motion on the first three counts and found for the Union after a bench trial on the remaining three issues. Plaintiffs appeal only the issues whether the Union misrepresented the company's right to hire replacements and whether the Union bargained to impasse.

I. Misrepresentation

Plaintiffs claim that, when they first received Edgcomb's letter announcing its right and intention to hire replacements, they contacted Union officials who dismissed the letter as "propaganda," "garbage" and "lies" and urged members to "pay no attention." Additionally they note that, in their affidavits, two Union officials admitted never warning members that striking could result in the loss of their jobs. Thus, before the trial court, plaintiffs charged that the Union both actively misled and misinformed members regarding the risks of striking and also that it failed to apprise members of the risks of striking. This, they argued, was a breach of the Union's duty of fair representation under section 301 of the Labor Management Relations Act, 29 U.S.C. ยง 185 (1982). After reviewing over 1,000 pages of depositions and affidavits, the court concluded that the charge of active misrepresentation "seriously exaggerate[s] the union's conduct as shown by all the facts in the record." Swatts v. United Steelworkers of America, No. IP 81-780-C, mem. op. at 10 (S.C. Ind. April 24, 1984). The court noted that only two affidavits claimed active misrepresentations of whether the company could hire permanent replacements. By contrast, 45 affidavits stated that the Union had never said the company could not hire replacements but had only stated that it was likely that such replacements would be dismissed upon the settlement of the ...

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