Cruz-Capella v. Coca-Cola Bottling Co. of Puerto Rico, Inc.

677 F. Supp. 65, 1987 WL 28900
CourtDistrict Court, D. Puerto Rico
DecidedNovember 25, 1987
DocketCiv. No. 86-1356CC
StatusPublished
Cited by1 cases

This text of 677 F. Supp. 65 (Cruz-Capella v. Coca-Cola Bottling Co. of Puerto Rico, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cruz-Capella v. Coca-Cola Bottling Co. of Puerto Rico, Inc., 677 F. Supp. 65, 1987 WL 28900 (prd 1987).

Opinion

OPINION AND ORDER

CEREZO, District Judge.

This is an action instituted by eight plaintiffs against their employer under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. Section 185, et seq. (the Act), and against their union for breach of its duty of fair representation. The employer, Coca-Cola Bottling Co. of Puerto Rico, Inc. (Coca-Cola) and the Unión de Tronquistas de Puerto Rico, Local 901 (the Union), have moved for summary judgment on the grounds that there was no breach of the collective bargaining agreement since plaintiffs were discharged as a result of a sale of Coca-Cola’s assets. It is further alleged that the parties bargained in good faith regarding the effect of the sale and plaintiffs are barred by an agreement signed by the parties on June 12, 1986 which covered the terms and conditions of their termination. It is, therefore, contended that plaintiffs also failed to show that the Union incurred in a breach of its duty of fair representation.

The record reveals the following undisputed facts. In May 1986 Coca-Cola sold its sales assets to the food and Spirits Distributing Corporation. As a result of this sale, Coca-Cola dismissed its complete sales people, including plaintiffs, effective May 23, 1986. At the time of their dismissal plaintiffs were represented by the Union, which had subscribed a collective bargaining agreement with Coca-Cola that would have been in effect until October 10, 1986.

[67]*67Coca-Cola notified the Union of the sale and both parties bargained regarding the effect of the sale upon all of the unit’s employees, including plaintiffs. The sale and imminent lay-off were announced to the employees on May 23, 1986 in a meeting held with Coca-Cola representatives. On June 12, 1986, the parties reached a final agreement and entered into a Stipulation which included all the terms and conditions pertaining to the termination. As a result of the Stipulation and Agreement dated June 12, 1986, all plaintiffs received severance pay in the amount of one month of work, plus one week for each full year of service of the employee to the company. Additionally, they received a bonus equivalent to two per cent of their salary and other benefits relating to pension and medical plans. The Stipulation also provided for the rescission of the collective bargaining agreement in effect at the time and Coca-Cola was relieved from any claims of cause of action arising from the sale of assets and the lay-off of the employees of the sales units.

It has been held that while the effects of a Company’s decision to sell part of its business is a subject for mandatory bargaining, the decision itself is not subject to negotiation as a term and condition of employment within the context of Section 8(d) of the National Labor Relations Act, 29 U.S.C. Section 158 (the Act). Plaintiffs failed to show that there was a breach of the collective bargaining agreement in effect at the time of the sale. Coca-Cola’s sole obligation under law was met when it negotiated with the Union over the effects of the sale upon the unit employees. First National Maintenance Corp. v. N.L.R.B., 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981). As supported in the documents and sworn statements submitted by defendants with their motion for summary judgment, the terms and conditions of the negotiation were included in the Agreement and Stipulation signed by both parties on June 12, 1986. This agreement specifically asserts that the parties bargained in good faith in relation to the sale and subsequent reduction in force.1

Plaintiffs assert that Coca-Cola breached the collective bargaining agreement by not providing prior notice to the Union six days before the personnel reduction in accordance with Article XVII of the collective bargaining agreement. Plaintiffs’ argument is misplaced since according to Article XYII of the collective bargaining agreement, Coca-Cola was not under an obligation to notify the Union of the decision to sell its Sales Department assets. Under agreement, notice to the Union was only required in situations of a partial or temporary personnel reduction within a department.2 Consequently, the six-day notice requirement would not apply in case of a complete shutdown of a department as a result of a sale of the business, like the present situation.

Although Coca-Cola was not required to provide the Union with six-day prior notice, the supporting affidavits and documents on record establish that Coca-Cola gave notice to the Union of the imminent sale of assets and subsequent discharge of employees in advance of the termination and sale. Most importantly, by means of the Agreement and Stipulation signed on June 12, 1986, which covered all the aspects of plaintiffs’ termination rights, the provisions contained in the collective bargaining agreement in [68]*68effect at the moment were rescinded in their entirety.3

Coca-Cola was also relieved from any and all claims that might arise from the sale and termination.4 All plaintiffs acknowledged the terms and conditions of the Stipulation Agreement by signing a copy of the same as well as by accepting the economic benefits provided therein. All plaintiffs received severance pay and other benefits at the time of their lay-off.5

Under Section 7 of the Act “employees shall have the right to self organization ... to bargain collectively through representatives of their own choosing....” 29 U.S.C. Section 157. Furthermore, Section 9 provides that:

Representatives designated or selected for the purposes of collective bargaining by the majority of the employees ... shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment. ...

29 U.S.C. Section 159.

As the record establishes, the Union was the exclusive bargaining representative of the unit employees at the time of the layoff that took place on May 23, 1986. The Union exercised this authority when it bargained over the impact of the inevitable sale and reached an agreement covering all aspects of plaintiffs’ termination rights. Under the Act, bargaining representatives are given not only wide responsibility toward the employees they represent, but authority to meet that responsibility. Ford Motor Co. v. Huffman, 345 U.S. 330, 73 S.Ct. 681, 97 L.Ed. 1048 (1953). As stated by the U.S. Supreme Court in Ford, at 337-338, 73 S.Ct. at 685-686: “Any authority to negotiate derives its principal strength from a delegation to the negotiators of a discretion to make such concessions and accept such advantages as, in the light of all relevant considerations, they believe will best serve the interests of the parties represented.”

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Bluebook (online)
677 F. Supp. 65, 1987 WL 28900, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cruz-capella-v-coca-cola-bottling-co-of-puerto-rico-inc-prd-1987.