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MONTGOMERY WARD & CO. v. WAREHOUSE

December 8, 1995

MONTGOMERY WARD & CO., INCORPORATED, Plaintiff,
v.
WAREHOUSE, MAIL ORDER, OFFICE, TECHNICAL and PROFESSIONAL EMPLOYEES UNION, AFFILIATED WITH THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO, LOCAL 743, Defendant.



The opinion of the court was delivered by: CASTILLO

 Plaintiff Montgomery Ward & Co. ("Montgomery Ward") seeks to vacate an arbitration award -- or more precisely, a portion of that award -- that was issued in its favor against defendant Warehouse, Mail Order, Office, Technical and Professional Employees Union, Affiliated With The International Brotherhood Of Teamsters, AFL-CIO, Local 743 ("Local 743"). Local 743 moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), contending that this Court lacks subject matter jurisdiction because Montgomery Ward's complaint fails to allege a violation of a labor contract as required by 29 U.S.C. § 185. Alternatively, Local 743 moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), arguing that Montgomery Ward's complaint is not ripe for adjudication.

 BACKGROUND

 Montgomery Ward is an Illinois corporation engaged in the retail sales and services industry. Compl. P 1. Montgomery Ward maintains its corporate headquarters in Chicago, Illinois, and has numerous places of business throughout Illinois and throughout the country. Id. Local 743, a labor organization with offices across the country and throughout Illinois, has been the exclusive bargaining representative for Montgomery Ward's product service technicians in Illinois since at least 1988. Id. P 2. There is no dispute that Montgomery Ward is an "employer" as defined by the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 152(2), and Local 743 is a "labor organization" as defined by the LMRA, 29 U.S.C. § 152(5). Montgomery Ward and Local 743 are parties to a Collective Bargaining Agreement ("CBA") that governs the wages, hours and working conditions of employees covered by the agreement. The instant lawsuit arises out of a grievance initially filed by Wilfredo Valle ("Valle") pursuant to the grievance provisions of the CBA. *fn1"

 Valle is employed by Montgomery Ward as a product service technician involved in the "Doctronics" program -- a service that permits customers to bring in small appliances and have them repaired on the spot. In April or May of 1993, in accordance with certain notice provisions of the CBA, Montgomery Ward notified Valle that his hours of work were being changed and that he would be required to work some Saturdays and Sundays. Compl. P 8. At the time of this notification, Valle worked at Montgomery Ward's Addison Street facility. Id. Upon receiving this notification, Valle requested to displace or "bump" an employee in Montgomery Ward's Schaumburg facility who had less seniority than Valle so that Valle could obtain the less senior employee's more favorable work schedule. Id. P 9. Montgomery Ward refused Valle's request because, under the terms of the CBA, an employee is not entitled to "bump" another employee based on seniority absent a "vacancy" at the facility. Id. P 9; Compl. Ex. B § 4.6. *fn2"

 On May 10, 1993, Valle timely filed a grievance with Local 743. Id. P 10. Valle's grievance noted that his schedule had been changed and that he wanted to transfer to the Schaumburg facility. Compl. P 10. In accordance with the CBA, Local 743 presented Valle's grievance to Montgomery Ward management. Id. P 11. Montgomery Ward denied the grievance in the first two stages of the grievance procedure. Id. P 12. Subsequently, the grievance was submitted to the Joint Grievance Committee pursuant to the third stage of the grievance procedure Id. The Joint Grievance Committee deadlocked on Valle's grievance. Id. Accordingly, Local 743 then requested binding arbitration, the fourth and final stage of the grievance procedure. Id.

 In should be noted, however, that in the summer of 1993, after Montgomery Ward had twice denied Valle's grievance but before the Joint Grievance Committee heard the grievance and before arbitration, Montgomery Ward created a new position in the Schaumburg facility for which Valle submitted a bid. Id. P 13. Montgomery Ward awarded the new position to Valle based on his seniority, and transferred him to the Schaumburg facility. Id. At the same time that Valle was transferred, all technicians at the Schaumburg facility were given new work schedules. Id. P 14. Under Montgomery Ward's informal practice, Valle was allowed to select the work schedule he wanted based on his seniority. *fn3" Id. Montgomery Ward contends that Valle's ability to obtain the more desirable work schedule resulted from Montgomery Ward's informal practice, not the CBA. Id.

 Despite the fact that Valle obtained the position and schedule he desired, Local 743 proceeded to arbitrate his grievance. Id. P 15. An arbitration hearing was held on January 10, 1995, before Arbitrator Bennett Aisenberg. On March 9, 1995, Arbitrator Aisenberg issued a decision noting that, "In spite of the fact that the grievant was awarded the transfer that he had initially requested, he and the Union persisted in the grievance because of the principle involved." Compl. Ex. A, Arbitration Decision at 5.

 Arbitrator Aisenberg identified the stipulated issues for arbitration as follows:

 
1. Did the Company violate the Collective Bargaining Agreement when it changed the hours of Wilfredo Valle and refused to permit him to transfer from one store to another?
 
2. If so, what is the appropriate remedy?

 Arbitrator Aisenberg's analysis focuses on whether the Union had met its burden of proving that such an agreement was made; and, after reviewing all of the evidence before him, he concluded that the Union had failed to meet that burden. In reaching this conclusion, Arbitrator Aisenberg noted that the relevant provisions of the CBA limit the selection of shifts or schedules based on seniority to situations in which a vacancy exists. See id. at 6-7 (discussing CBA paragraphs 4.6 and 10.2). Additionally, the Arbitrator observed that although various discussions were apparently conducted between the Union and Montgomery Ward regarding product service technicians and Sunday work, no agreement or understanding relating to senior product technicians bumping junior technicians in situations other than vacancy situations is memorialized in either the CBA or other writings reflecting the parties' agreements. See id. at 7, 8. Thus, there was not sufficient evidence to establish the existence of the alleged 1989 agreement and therefore Montgomery Ward did not violate the CBA by changing Valle's hours and refusing to permit him to transfer to the Schaumburg facility and bump a junior technician.

 The portion of the Arbitrator's decision that is the subject of the present federal lawsuit is the following paragraph, quoted in its entirety:

 
The Arbitrator has reflected on the fact that the grievant was eventually permitted to transfer to the Schaumburg location and that the junior employee, Mazzini, was given the less preferable shift. However, [Montgomery Ward's representative] explained this by pointing out that the shift that Mazzini had been filling changed, and thus, two vacancies occurred rather than merely one. Thus, Article 4.6 permitted the grievant preference in this situation. Whether two vacancies occurred, or only one, is immaterial for purposes of this decision. The fact is that [Montgomery Ward] had an arguable basis for permitting the grievant to bid for the position. It is apparent that the Company considers a change in starting time or varying schedule of days in an existing job to constitute a new job, and the Company will be bound in the future to apply Section 4.6 under these circumstances, because a vacancy exists. The fact that the Company permitted this in no way counteracts its position that where a vacancy does not exist, Article 4.6 has no application.

 Arbitration Decision at 8.

 In the complaint in this case, Montgomery Ward asserts that it "has never considered a change in an employee's schedule to constitute a new job or otherwise create a 'vacancy' under the terms of the Collective Bargaining Agreement." Compl. P 21. Montgomery Ward contends that, in considering Valle's subsequent and unrelated transfer, the Arbitrator injected a new interpretation to the meaning and application of the term "vacancy." Id. P 22. Montgomery Ward further contends that Arbitrator Aisenberg's interpretation did not apply to the facts and issues presented in Valle's grievance and that the parties never requested nor had an opportunity to argue or brief the meaning of the term "vacancy." Id. Insofar as the Arbitrator addressed facts and issues not submitted to arbitration by the parties, Montgomery Ward alleges that he exceeded his authority and made rulings that do not draw their essence from the CBA. Id. P 23. Finally, Montgomery Ward expresses its concern that "Local 743 may attempt to use Arbitrator Aisenberg's comment [quoted above] to bind Montgomery Ward in later grievances." Id. P 22. Expressly invoking section 10(a)(4) of the Federal Arbitration Act, 9 U.S.C. § 10(a)(4), Montgomery Ward requests this Court to "vacate Arbitrator Aisenberg's new interpretation of the term 'vacancy' set forth at page 8 of the award." Compl. at 7.

 Local 743 moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and Fed. R. Civ. P. 12(b)(6), asserting that Montgomery Ward fails to allege a contract violation actionable under § 301 of the LMRA and that Montgomery Ward fails to state a justiciable case or ...


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