Opinion ID: 552463
Heading Depth: 1
Heading Rank: 2

Heading: Implied, Interim Contract

Text: 15 The Company attacks on several grounds the district court's decision that the Company's unilateral implementation of its final offer, and the Union's subsequent commitment to continue working and not strike without a ten-day notice, created an implied, interim contract that included an obligation to arbitrate grievances. First, the Company argues that the unilateral implementation of its final offer did not amount to an offer open to the Union's acceptance. Second, the Company contends that even if the implementation created an offer, the Union rejected that offer by three times voting against accepting it. Third, the Company says that even if a contract was created by the implementation of its final offer and the employees' continued performance, any implied contract is between the Company and the individual employees, not between an employer and a labor organization, as required by section 301 of the Labor Management Relations Act (LMRA) (29 U.S.C. Sec. 185(a)) to create the federal court jurisdiction necessary to order arbitration. 16 In reviewing the district court's decision, we are mindful that arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). At the same time, courts have liberally construed traditional contract law in this area because of the strong congressional policy favoring arbitrability. See John Wiley & Sons v. Livingston, 376 U.S. 543, 548, 84 S.Ct. 909, 914, 11 L.Ed.2d 898, 904 (1964); Eastern Air Lines v. Air Line Pilots Ass'n, 861 F.2d 1546, 1550 (11th Cir.1988). Moreover, all that is required to find the existence of a collective-bargaining agreement is conduct by the parties manifesting an intention to be bound. See Eastern Air Lines, 861 F.2d at 1550.
17 The Company contends that its decision to implement unilaterally was no offer for interim employment. The core of the Company's argument is that its March 12 letter to the Union and the employees made clear the Company's position that it was unacceptable for employees to work without a signed labor agreement. As a result, the Company claims, the final offer was intended only as an offer for a three-year collective-bargaining agreement. The March 12 letter from the Company said that the Company planned a lockout because we can no longer continue operating the mill with the uncertainty of not having a signed labor contract, and the possibility of the unions calling a strike at a time best suited to their interests. Operating in this fashion is very difficult and potentially very costly. 18 As an initial matter, the Company letter is dated March 12, six days after the Company implemented its final offer and several weeks after it first announced its intention to implement the offer. The purpose of the March 12 letter was to explain the Company's decision to start a lockout a week later. Considered in context, the March 12 letter only illustrates the Company's unwillingness to continue the interim relationship created by the Company when it implemented its final offer and serves as an explanation for its decision to institute the lockout unless a long-term agreement was ratified. 19 We reject as well the Company's contention that the undisputed facts are that the terms of the offer were for the express and single purpose of a new three-year collective-bargaining agreement, and for no other purpose. Brief for Defendant at 32. The Company is confusing different kinds of offers. The Company's February 20 offer for a new three-year labor agreement is not the offer upon which the district court predicated its finding of an interim contract. Rather, it was the February 20 offer as implemented on March 6. That these two offers are distinct is without question. For example, the latter offer for interim employment did not include the two-percent wage increases or ratification bonuses included in the February 20 offer. 20 While the Company contends that [t]here is nothing which provides the least factual foundation for any conclusion that any offer was made to have the employees continue working without a contract or on any interim basis, we read the record as providing no alternative explanations for the Company's conduct. 3 The Company nowhere adequately characterizes an alternative explanation of the legal significance of its decision to implement unilaterally the modified final offer. By implementing that modified offer, the Company was in effect stating the conditions of employment under which the Union's members would work, should they choose to do so, until a long-term agreement was reached. 21 We also reject any contention that the modified final offer implemented by the Company contained no obligation to arbitrate grievances. Though the Company has suggested that such an obligation might not have been included because arbitration was not mentioned specifically in the final offer itself, the longstanding negotiation practice makes clear that only proposed changes and disputed items needed to be mentioned specifically because undisputed items carried over automatically. The Company has acknowledged that, assuming the Company had made an offer to induce the Union employees to continue working without a signed contract[,] ... then the Unions could argue the offer impliedly included all terms and conditions of employment which were not in dispute. Reply Brief for Defendant at 18. 22 It is not the case here, as it was in several of the cases relied on by the Company, 4 that the employer's implemented offer expressly included only portions of its final offer and the union now seeks to bind the employer to other portions of the final offer not expressly included in the implemented offer. The Company here announced that it intended to implement all portions of its final offer, with only two exceptions unrelated to arbitration: the two-percent per-hour wage increases and the ratification bonuses, both of which were included in the February 20 offer but which were excluded from the implemented offer. The Union here does not seek to enforce these excluded portions; instead, the Union is attempting to bind the employer to portions of the final offer that were included expressly or by clear implication in the Company's implemented offer. 23 Though the issue is not directly before us, it is noteworthy that the Company seemingly could have excluded arbitration from the implemented final offer, just as it did the wage increase and ratification bonus. 5 Because the Company made no effort to exclude the obligation to arbitrate as it had with other provisions, the Company cannot successfully complain that the final offer included only the specific items listed.
24 The Company argues that the period in question, after the parties had reached a bargaining impasse, was one of confrontation, not contract, and in support of this contention points out that the Union or its membership rejected the Company's February 20 offer on three different occasions. Also, the Union leadership repeatedly characterized the offer as unfair in its communications with the membership. As a result, the Company claims, it is contrary to the evidence to interpret the Union's behavior as accepting any offer from the Company. 25 Again, the Company confuses its February 20 offer for a new, three-year bargaining agreement, with the modified offer for interim employment unilaterally imposed by the Company on March 6. The Union or its membership rejected three different times the February 20 offer for a new, three-year bargaining agreement and characterized the February 20 offer as unfair. This conclusion by no means precludes the district court's finding, however. When the Company decided to implement unilaterally a modified version of its final offer, the Union and the Union-represented employees were still faced with the decision of whether to accept the offer of interim employment and to continue working or to strike. We have no conceptual difficulty in understanding that an employment arrangement that was unacceptable as a permanent, formal agreement might still be acceptable as a temporary, stop-gap measure. 26 We conclude that the uncontroverted evidence in the record establishes acceptance of the Company's offer of interim employment. On this score, the uncontradicted 6 affidavit of Union negotiator Langham says that on the first occasion the Company announced its intention to implement the modified February 20 offer, the Union negotiators stated that the Union-represented employees would continue to work on an interim basis and that no strike would be called without a ten-day notice. During the entire period of interim employment, from March 6 to March 17 (when the lockout was imposed), the Union-represented employees continued to work; and the Union never called for a work stoppage. The conduct of the Union and Union-represented employees was sufficient to manifest acceptance of the unilaterally imposed terms of employment. See generally NLRB v. Haberman Construction Co., 641 F.2d 351, 356 (5th Cir.1981) (conduct manifesting intention to be bound is enough). 27 The Company offers some legal authority supporting its position that the Union's conduct did not manifest an acceptance of the interim offer of employment; most closely on point factually are United Food & Commercial Workers Int'l Union v. Gold Star Sausage Co., 897 F.2d 1022 (10th Cir.1990); and Milwaukee Typographical Union v. Madison Newspapers, 444 F.Supp. 1223 (W.D.Wis.1978), aff'd without opinion, 622 F.2d 590 (7th Cir.1980). But both cases are distinguishable. 28 In Gold Star, the Tenth Circuit rejected an argument by a union that certain employee grievances were arbitrable under the terms of the employer's unilaterally implemented final offer, finding that the court lacked jurisdiction to hear the claim because the Company's last offer is not a contract between the parties. Gold Star, 897 F.2d at 1026. The Gold Star court made clear, however, that the Union does not even allege that the Company's last offer is, in some sense, a contract between the parties, much less point to any facts in the record that might support such an assertion. Id. The Union here has not only alleged that the evidence illustrates a binding contract; but, as detailed above, the Union pointed to uncontroverted evidence to support its assertion. 29 The Gold Star court did consider it relevant, however, that [t]he stipulated facts show that the Union has never agreed, even tentatively, to the major provisions of the Company's last offer. Id.; see also International Union v. Big Horn Coal Co., 916 F.2d 1499, 1501-1502 (10th Cir.1990). In a similar way, the district court in Milwaukee Typographical attaches importance to the union's rejection of the substance of the implemented offer, when it was submitted to the union not as an offer of interim employment, but as an offer for a new, long-term agreement. See Milwaukee Typographical, 444 F.Supp. at 1227. 30 To the extent that these opinions suggest that a union's response to a proposal for a formal, long-term agreement can be borrowed out of context to demonstrate the union's rejection of a similar offer for interim employment, we disagree with this approach. More important, the unions pressing for arbitration in these other cases had neither alleged nor shown the same facts that are presented in this case to support the union's acceptance of the offer for interim employment. Along these lines, the Tenth Circuit opinions can be cited for the proposition that such additional evidence of union acceptance does establish an interim contract created by an implemented final offer: 31 Employer implementation of a last and final offer is, by itself, insufficient to invoke jurisdiction absent some manifestation of acceptance of the offer sufficient to create a contract .... The contract between the parties required for jurisdiction need not be a written, signed collective-bargaining agreement, but may exist as any informal agreement between the parties significant to the maintenance of labor peace between them. It suffices that the parties' intent to abide by the agreed-upon provisions of any such informal agreement is in some manner manifest. 32 Big Horn, at 1501-1502 (emphasis added) (citing Gold Star, 897 F.2d at 1026; United Paperworkers v. Wells Badger Industries, 835 F.2d 701, 704 (7th Cir.1987)). 33 In Taft Broadcasting Co. v. NLRB, 441 F.2d 1382 (8th Cir.1971), the Eighth Circuit addressed the legal significance of an employer's letter to Union-represented employees outlining the employer's planned unilateral implementation of its final offer after a bargaining impasse. The Taft court suggested that no conduct is required by the union or the employees it represents to bind the employer to its final offer as an interim agreement to arbitrate unresolved grievances. Id. at 1385. The court noted that, 34 In this context the letter can properly be regarded as offering, at the same time, to continue, at least for a while, certain practices. While in one breath Taft asserts that the letter could not ripen into a contract unless the union formally accepted it, in the next it says, quite correctly, that '[t]he letter calls for no response on the union's part, either by action or by reply.' ... [W]e conclude that the Board could properly find that the union's inaction was, contractually, just what was called for. 35 Id. 36 The Seventh Circuit, in United Paperworkers v. Wells Badger Industries, 835 F.2d 701 (7th Cir.1987), also held that an employer was bound to the terms of its unilaterally implemented final offer, including the obligation to arbitrate grievances arising after the expiration of the previous bargaining agreement. Though the employer in Wells Badger had offered more specific assurances about grievance resolution than International Paper had here, we think it is equally justified to conclude that [t]he assurance of the company and the reliance thereupon by the employees is certainly sufficient under the facts and the circumstances of this case upon which to determine objectively the intentions of the parties. Id. at 704.
37 The Company contends that the evidence fails to establish a contract[ ] between an employer and a labor organization as required by section 301 of the LMRA to establish federal court jurisdiction of the dispute over arbitrability. To exercise federal court jurisdiction under section 301, we must find (1) a claim for violations of (2) a contract (3) between an employer and a labor organization. Carpenters Local Union v. Pratt-Farnsworth, 690 F.2d 489, 500 (5th Cir.1983); see also Johnson v. Pullman, 845 F.2d 911, 914 (11th Cir.1988) (A federal court has jurisdiction over a suit for violation of a collective-bargaining agreement under section 301 only while the agreement is in force.). 38 The first element, a claim for violations, is satisfied by our holding that the obligation to arbitrate was included in the unilaterally implemented offer. The second element, the existence of a contract, is satisfied by our conclusion that there was a Company offer of interim employment and acceptance of that offer. See Smith v. Kerrville Bus Co., 709 F.2d 914, 920 (5th Cir.1983) (Section 301 must be broadly construed to encompass any agreement, written or unwritten, formal or informal, which functions to preserve harmonious relations between labor and management.). The Company says, however, that any agreement reached was between the Company and its individual employees, not with the Union itself. As a result, the Company contends, there is no contract between an employer and labor organization as required by section 301. 39 In support of its claim that any interim contract was between the Company and individual employees, the Company cites International Union v. Atlas Tack Corp., 590 F.2d 384 (1st Cir.1979). In that case, the union argued that the employer's unilateral imposition of portions of its final offer bound the employer to all the terms of its final offer. The First Circuit held that it lacked jurisdiction under section 301 because, [e]ven assuming this unilateral contract theory were applicable in the labor relations context at all, it would give rise to individual contracts between [the employer] and the employees, not a collective contract between [the employer] and the Union. Id. at 386. We find that case distinguishable because the court's conclusion hinged on the fact that [t]he Union does not claim that it accepted the offer, but rather that the employees accepted it by their performance as individuals. Id. 7 40 Of course, the Union here has not only claimed that the Union accepted the Company's offer of interim employment, but the Union has proffered uncontradicted evidence to buttress that claim. The uncontroverted evidence shows the Union expressly agreed that the employees it represents would continue working under the Company's unilaterally implemented offer and that the Union would not call a strike without a ten-day notice. In the circumstances of this case, when the Union agreed to give up portions of its usual arsenal of economic weapons and the Union-represented employees continued working in reliance of the terms of the Company's implemented offer, there is, as a matter of law, enough to manifest the Union's intention to be bound by the temporary agreement. See Big Horn, at 1501-1502 (implied, interim contract resulting from implemented final offer may take form of informal agreement between the parties significant to the maintenance of labor peace between them).