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International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. ZF Boge Elastmetall

May 28, 2010

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, AND ITS LOCAL 2343, PLAINTIFFS,
v.
ZF BOGE ELASTMETALL, LLC, DEFENDANT.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

OPINION

Plaintiff, International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America and its Local 2343, filed its Complaint (#1) against Defendant ZF Boge Elastmetall LLC on October 27, 2008. Defendant filed its Motion for Summary Judgment (#37) on December 18, 2009. The same day Plaintiff filed its Motion for Summary Judgment on Liability (#44). Response and Reply briefs on both motions have now been filed and the case is ready for judgment. For the following reasons, Defendant's Motion for Summary Judgment (#37) is GRANTED and Plaintiff's Motion for Summary Judgment on Liability (#44) is DENIED.

BACKGROUND

This action arises out of an alleged breach of a collective bargaining agreement (CBA) between and Defendant. The alleged breach occurred when Defendant closed its union-represented facility in Paris, Illinois, while keeping open a non-union facility in Hebron, Kentucky.

Plaintiff is a labor organization within the meaning of § 301 of the Labor Management Relations Act of 1947. Defendant is an employer within the meaning of § 301. At all material times to this suit, Defendant operated a union facility located in Paris, Illinois. Defendant also operated a non-union facility in Hebron, Kentucky. The Paris and Hebron facilities both produced rubber metal brushings, primarily for the automotive industry.

Plaintiff is the exclusive collective bargaining representative for a unit of production and maintenance employees employed at Defendant's Paris facility. Plaintiff and Defendant were parties to a CBA covering the Paris employees that was effective by its terms from April 3, 2005 through April 6, 2008. Article 3 of the CBA, titled "Management Rights," provided that Defendant had "the exclusive right in accordance with its judgment to... sell, lease, or close down or expand the plant or parts thereof, and reduce, alter, combine, transfer or cease any department operation or service; determine the number, size [,] location and operation of plants and division, groups, and departments thereof;... determine the schedules of production, the assignment of work and the size and composition of the workforce..."

Article 29*fn1 of the CBA provided: "Nothwithstanding anything else in this Agreement, no act, omission, or event occurring before the initial effective date or after the termination of the Agreement shall give rise to any rights or liabilities under this Agreement nor shall it be subject to arbitration."

Greg White was the President and CEO of Defendant's North American operations, with responsibility for the Paris and Hebron facilities. Marc Vonderlage was the Plant Manager of the Paris facility. Bill Winschief was the President of the union Local 2343 and Gary Abernathy was the chair of the local union bargaining committee.

In early 2007, for economic reasons, Defendant began studying the potential consolidation of the Paris and Hebron facilities into a single facility located either in Paris or Hebron. On April 12, 2007, Defendant announced to employees that a consolidation was being studied, which stated:

"With the significant operating losses in our business over the past few years and the outlook for future revenue and operating losses along with the ongoing challenges in our business environment from increased competition, rising material costs and pricing pressures from our customers, it does not appear realistic to maintain two North American manufacturing facilities. The study is evaluating consolidation or exiting of manufacturing operations in North America.

ZF wants to continue manufacturing operations in the North American marketplace; however, it is not acceptable to continue to generate operating losses. Please know that the Company will consider all options and discuss this matter with all appropriate persons and parties.

Whatever decision is taken, it is expected to be a three to four year process to execute any plan that is approved."

In April-May 2007 Defendant approached Plaintiff and requested to reopen the CBA to renegotiate six specific provisions or practices that Defendant deemed non-competitive. These six issues were: pensions (Article 17.1), shift overlap (Article 7.2), job selection (Article 10.4), Family and Medical Leave (Article 14.2), the weekly payroll practice, and the remedy for overtime errors. In a notice to employees on May 10, 2007, Plant Manager Vonderlage advised employees that Defendant had identified certain "non competitive practices" in Paris that could be changed to help "reduce costs at the plant without causing significant financial impact to the employees."

Vonderlage further explained:

"This is the hourly workers' best opportunity to influence the consolidation decision in favor of the Paris plant. If these ideas are agreed to in some fashion between the union and the company the odds of the Paris plant are shifted in our favor. This will not be the only factor considered when making the decision between facilities, but it is an important issue being considered."

On May 11, 2007, union president Bill Winschief notified Greg White that the union members had "voted down opening the contract to renegotiate your six issues." Winschief stated, "I realize that your intent to negotiate these things was to give us a better chance of being the choice, but some people don't like chances, they want a sure bet, and you couldn't give me an answer." Further discussions ensued between Plaintiff and Defendant. On May 15, 2007, Vonderlage issued a written memorandum to employees regarding Defendant's request to bargain over the six issues. In the memorandum, Vonderlage stated that "Greg White wants to position this plant so that it has the best chance of being chosen to remain open and viable in the long term." He went on to state that "no changes that we negotiate with your elected representative for approval by Union members will take effect unless this plant is chosen to stay open." On May 22, 2007, the employees voted to proceed with bargaining over the issues submitted by Defendant.

Plaintiff and Defendant subsequently engaged in negotiations over Defendant's proposed modifications to the CBA. In early June 2007, Plaintiff and Defendant reached an agreement, which was memorialized in a written agreement signed June 25, 2007, to modify the CBA in certain respects. The agreement set out in one column certain existing ...


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