Amalgamated Clothing & Textile Workers Union v. Synthane Taylor Corp.

624 F. Supp. 595
CourtDistrict Court, E.D. Pennsylvania
DecidedMarch 11, 1985
DocketCiv. A. Nos. 83-4097, 83-4258
StatusPublished
Cited by1 cases

This text of 624 F. Supp. 595 (Amalgamated Clothing & Textile Workers Union v. Synthane Taylor Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amalgamated Clothing & Textile Workers Union v. Synthane Taylor Corp., 624 F. Supp. 595 (E.D. Pa. 1985).

Opinion

MEMORANDUM AND ORDER

JAMES McGIRR KELLY, District Judge.

Defendant, Synthane Taylor Corporation (Synthane) has filed motions for summary judgment against the plaintiff, Amalgamated Clothing and Textile Workers Union of America, AFL-CIO, Local 1369 (Union). The Union filed suit1 to vacate two arbitration awards which were entered in favor of the defendant. This dispute involves a plant closing which has idled approximately 150 union members. The Union has cross-moved for summary judgment against Syn-thane. The arbitration was necessitated by a difference in the interpretation of two provisions in the collective bargaining agreement (agreement) covering vacation benefits and severance pay. In addition, the plaintiff also alleges that defendant’s failure to provide severance pay benefits violates the Pennsylvania Wage Payment and Collection law, 43 Pa.C.S.A. § 260.1 et seq.

FACTS

The Union represented the production and maintenance employees at the now closed Taylor division plant of the Syn-thane-Taylor corporation.2 The plant was engaged in the production of unclad laminates, copper clad laminates and special circuitry used in electrical insulation. In September, 1982, Synthane notified the em[597]*597ployees of the Taylor division that the company was contemplating permanently closing their plant. It was eventually phased out of operation in March, 1983.

The economic reasons for closing the Taylor plant are found in a fiscal report highlighting the financial results from 1978 to 1982. During that period the division’s profitability, measured by operating income and return on investment, had decreased substantially each succeeding year. This downward trend had not gone unnoticed by the senior management of Aleo Standard, the parent corporation of Synthane-Taylor.3 In July, 1982, Frank Kelly, Group President of Aleo Standard, proposed transferring the production of industrial laminates from the Taylor plant to the Synthane facility. All other operations at the Taylor division would be terminated.

In Mr. Kelly’s report detailing the reasons for his decision he wrote:

The relocation is being proposed as the definitive resolution to a critical and probably chronic operating problem at the Taylor division ... a problem whose magnitude is best exemplified by the $10 million of capital employed with a negative return____ the Taylor division has been marginally profitable since 1979____ The major problems are: competitive pricing at below cost levels in copper clad laminates; a substantial amount of overhead unabsorbed by volume ...; antiquated equipment; and high labor rates. Interim efforts at circumventing any of these elements have provided little hope for attaining any short or medium term turnaround.

Mr. Kelly concluded his report by stating only one product segment possessed the favorable market characteristics and profitability necessary to economically justify its continuation.

Synthane notified the Union in September, 1982 that its Valley Forge plant would be permanently closed. The greater part of the Union employees worked their last day on December 21, 1982. Eleven others finished up eight days later and a skeleton crew was retained until the plant was closed in March, 1983.

When the shutdown of the plant was announced, the Union cited provisions in their agreement which they interpreted provided for severance pay. The agreement read in part:

In case the Company permanently shuts down a department or section— Any employee or employees with (5) years or more of continual service who are laid off because of technological reasons, including, but not limited to changes in plant or equipment or changes in process operations which cause jobs to be abolished, will be given an opportunity for severance pay under the following conditions ...4

It was the Union’s contention then, as it is now, that the shut down was due to technological reasons. Synthane vigorously disagreed with the Union’s position and the dispute over the meaning of this provision was submitted to arbitration.

The Union predicated its case on a series of events preceding the plant closing. Syn-thane had transferred a number of its product lines to other plants. The machines and equipment used to produce these products were transferred also. During the years 1974-1980, the company had to deal with a number of environmental problems involving air and water polution and sewerage disposal. The Union believed that the shut down was for “technological reasons” since it'was based on environmental mandates, changes in plant and equipment and changes in the production process.

The Union sought to have the arbitrator interpret technological changes to include not only those instances where a machine replaces a person, but also those instances [598]*598where the company chooses not to upgrade or modernize its existing equipment.

The arbitrator rejected this broad interpretation holding that the provision was not intended to cover “technological changes the company should have made to keep the plant in operation.” (emphasis added).5

The arbitrator was clearly influenced by the bargaining history surrounding the wording of the severance pay provision. During negotiations, the Union submitted a severance pay proposal to be included in the collective bargaining agreement. The Union’s proposed clause would have provided benefits to any employee who was laid-off regardless of the reason, be it relocation, financial failure, obsolete plant and equipment or technological improvements. The proposed clause read:

In case the company permanently shuts down a section, department or curtails total operation due to relocations, obsolescence of plant or equipment, financial failure or because of technological reasons____6

This proposal was rejected by Synthane’s management in lieu of the more restricted language reading in part: “[a]ny employee or employees with (5) years or more of continual service who are laid off because of technological reasons ...”7

The arbitrator reasoned that to adopt the Union’s expansive reading of the severance pay provision would be to award them in arbitration what they could not gain through collective bargaining.8

The Union appeals from the arbitration holding on two points. First, the arbitrator misinterpreted the contract language by requiring that the lay-offs be due to the introduction of new technology. Second, the Union asserts that Synthane withheld pertinent information from the arbitrator which may have influenced his decision.

The second grievance raised by the plant closing is a dispute over the employees vacation benefits. The agreement provided that “an employee on the employment record of the company on July 1 of each year shall be entitled to vacation time off based upon the continuous service he has with the company ...”9

The company interpreted the phrase “on the employment records” as synonymous with working. Since no union members were working as of July 1, 1983, vacation benefits would not be available.

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Bluebook (online)
624 F. Supp. 595, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amalgamated-clothing-textile-workers-union-v-synthane-taylor-corp-paed-1985.