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Roadmaster Corp. v. Production and Maintenance Employees' Local 504

decided: July 1, 1988.

ROADMASTER CORPORATION, PLAINTIFF-APPELLEE,
v.
PRODUCTION AND MAINTENANCE EMPLOYEES' LOCAL 504, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Southern District of Illinois, No. 87-4032--James L. Foreman, Chief Judge.

Flaum, Manion, and Kanne, Circuit Judges.

Author: Kanne

KANNE, Circuit Judge.

Roadmaster Corporation ("Roadmaster") brought this suit in the district court to vacate an arbitration award in favor of the Production and Maintenance Employees' Local 504 ("Local 504"). The district court granted Roadmaster's motion for summary judgment and vacated the arbitration award, 655 F. Supp. 1460. Local 504 appeals that decision. The issue presented is whether an arbitrator, when resolving a grievance arising under a contract, may consider outside "positive law" in making his decision. We hold that, absent contractual authority to the contrary, an arbitrator may not so rely upon positive law. Therefore, we affirm the district court.

I. BACKGROUND

Roadmaster operates a bicycle manufacturing plant in Olney, Illinois. The employees at this plant were covered by a collective bargaining agreement and were represented by the United Employees' Union Number One. The term of this agreement was from December 1, 1982 through February 28, 1986.

In 1985, a strike resulted from Roadmaster's request for wage concessions. Two items of significance occurred during this strike. First, Roadmaster hired over 500 permanent replacement employees. Second, the membership of the United Employees' Union Number One voted to merge with Local 771 of the Laborers' International Union of North America. Before the merger was finalized, the officers from both unions informed Roadmaster that they would accept Roadmaster's most recent offer.

Roadmaster replied that the unions' employees had been replaced permanently and therefore were not entitled to return to work. Subsequently, the members of United Employees' Union Number One voted to form their own local affiliated with the Laborers' Union. This local was chartered as Local 504, the appellant herein.

Roadmaster refused to recognize Local 504 due in part to confusion over which union actually represented Roadmaster's employees.*fn1 Roadmaster wanted the collective bargaining agreement to terminate on February 28, 1986, the last effective date of the contract. The contract, however, contained a "rollover" provision in Article 34 that read:

DURATION

A. This Agreement made and entered into and executed at Olney, Illinois, shall remain in full force and effect as of December 1, 1982, and terminating at 12 o'clock midnight February 28, 1986. This Agreement shall continue in full force from year to year thereafter, unless either party desiring to amend or terminate this Agreement shall serve upon the other party written notice, by certified mail, at least sixty (60) days prior to the date it desires to amend or terminate the Agreement. Consistent with Article 34, Roadmaster sent a letter dated December 16, 1985 to all three unions. This letter stated:

Pursuant to Article 34 of the current collective bargaining agreement between United Employees Union Local No. 1 and Roadmaster Corporation, and pursuant to Section 8(d) of the National Labor Relations Act, this letter constitutes notice of the intent of Roadmaster Corporation to terminate the collective bargaining agreement between Roadmaster Corporation and United Employees Union Local No. 1 at 12 o'clock midnight, February 28, 1986.

This letter and notice is not to be construed as recognition of Production and Maintenance Employees Local 504 as the collective bargaining representative of the Production and Maintenance Employees at Roadmaster Corporation. Further, this notice does not constitute a waiver and is without prejudice of any rights the employer has or may have to assert that Production and Maintenance Employees Local 504 is not the collective bargaining representative of Roadmaster Corporation's Production and Maintenance Employees under the National Labor Relations Act. This ...


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