Lockheed Aeronautical Systems Company-Georgia v. Aeronautical Machinists Local Lodge No. 709

778 F. Supp. 1576, 1991 WL 270594
CourtDistrict Court, N.D. Georgia
DecidedNovember 25, 1991
DocketNo. 1:91-CV-0054-RHH
StatusPublished

This text of 778 F. Supp. 1576 (Lockheed Aeronautical Systems Company-Georgia v. Aeronautical Machinists Local Lodge No. 709) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lockheed Aeronautical Systems Company-Georgia v. Aeronautical Machinists Local Lodge No. 709, 778 F. Supp. 1576, 1991 WL 270594 (N.D. Ga. 1991).

Opinion

ORDER

ROBERT H. HALL, Jr., District Judge.

This is an action to vacate an Opinion and Award of an arbitrator rendered pursuant to a collective bargaining agreement. Jurisdiction is vested with this Court pursuant to 29 U.S.C. § 185 and 28 U.S.C. §§ 1331 and 1337. The case is currently before the Court on both parties’ Motions for Summary Judgment. The Court DENIES Plaintiff’s Motion for Summary Judgment [16-1], and GRANTS Defendant’s Motion for Summary Judgment [18— 1].

BACKGROUND

Plaintiff Lockheed Aeronautical Systems Company-Georgia, a Division of the Lockheed Corporation, is a Delaware corporation doing business within this district, and is an employer in an industry affecting commerce within the meaning of § 301 of the Labor-Management Relations Act, 29 U.S.C. § 185 (“the LMRA”). Defendant Aeronautical Machinists Local Lodge No. 709, International Association of Machinists and Aerospace Workers, AFL-CIO, is a labor organization within the meaning of § 301 of the LMRA. Defendant, through its duly authorized officers and agents, is engaged in representing its employee members in matters affecting their wages, hours, and working conditions.

At all relevant times, Defendant served as the collective bargaining representative for certain employees of Plaintiff at Plaintiff’s Marietta, Georgia manufacturing facility (the “unit employees”). Plaintiff and Defendant had in the past executed and been bound by various collective bargaining agreements, each agreement being of approximately three years’ duration. In accordance with this system, commencing March 5, 1990, Plaintiff and Defendant were bound by the collective bargaining agreement (the “agreement”) at issue in this lawsuit. That agreement purported to govern Plaintiff’s relationship with the unit employees, and to remain effective through March 1, 1993.

Pursuant to Part B, Article I, Section 14 of the agreement, Plaintiff agreed not to subcontract, or contract out, maintenance work normally performed in house by members of the bargaining unit, except in four limited circumstances. Thus, the agreement presumably allowed Plaintiff to subcontract nonmaintenance work.

Sometime shortly after the March 4,1990 ratification of the agreement, Plaintiff announced its intention to subcontract the processing of its insurance claims to Aetna, an outside insurance administrator, thus eliminating the previous system of in house claims processing. Because of the subcontract arrangement, several unit employees who had previously performed in house insurance claims processing were “surplused” as unneeded. Individual unit employees so affected by the subcontract filed grievances pursuant to the terms of the agreement, protesting both Plaintiff’s plan to eliminate the in house processing of insurance claims, and Plaintiff’s alleged plans to surplus the in house processors in May, 1990. Pursuant to the terms of the agreement, the grievances were submitted to arbitration.

Accordingly, an arbitrator was appointed on July 16,1990, and an arbitration hearing was held on August 27 and 28, 1990. During the hearing the parties had the opportunity to present all relevant evidence, examine all witnesses, and argue their respective positions. As a result of this hearing, the arbitrator concluded that the record presented two issues to be decided in order to resolve the grievances under arbitration. Those two issues were, first, whether Plaintiff had the right, under the agreement, to transfer the work previously performed by in house claims processors to an [1578]*1578outside insurance carrier. As a second issue, the arbitrator would decide, if Plaintiff did have the right to subcontract, whether Plaintiff acted in good faith in subcontracting to Aetna the claims processing work, and if not, the appropriate remedy. See Opinion and Award dated December 28, 1990, attached as Exhibit D to Complaint, § I, P- 2.

In his Opinion and Award, the arbitrator found, first, that Plaintiff had the right, under the agreement, to subcontract its claims processing work to Aetna. However, the arbitrator also found that Plaintiff “acted in bad faith and violated the prior [collective bargaining] agreement [between Plaintiff and Defendant] when its accounting-finance personnel followed a scheme to discredit in house claims processing from early 1989 until March 1990.” (“the bad faith scheme”). Opinion and Award, § VII. Apparently finding that it was this bad faith discrediting of in house claims processing that led to Plaintiffs eventual subcontracting of the work to Aetna under the current agreement, the arbitrator required Plaintiff to return the claims processing work contracted out to Aetna to its in house employees. Furthermore, the arbitrator required Plaintiff to adequately staff its in house claims processing department so as to meet a maximum allowable level of claims backlog, and further required Plaintiff to meet these backlog requirements by reinstating, with compensation for lost earnings, unit employees previously surplused due to Plaintiffs subcontract with Aetna. Finally, the arbitrator concluded that Plaintiff would be “entitled to contract out this work under the next agreement as long as no language is adopted restricting such action.” Id.

On January 9, 1991, Plaintiff commenced this lawsuit, requesting that this Court vacate the arbitrator’s Opinion and Award. In its Complaint, Plaintiff contends that, given the arbitrator’s finding that Plaintiff has the right under the agreement to subcontract its claims processing work to Aetna, the arbitrator’s subsequent finding that Plaintiff should reinstate its in house claims processing department impermissibly results from the arbitrator’s “objection to the circumstances under which the [agreement] was negotiated." Complaint, pp. 4-5, 1112. Plaintiff further contends that “[i]n rendering that portion of the Award other than the finding that Lockheed had the authority to subcontract the work at issue, the Arbitrator exceeded his jurisdiction and authority.” Complaint, p. 5, 113.1

On January 29, 1991, Defendant filed its Answer and Counterclaim. In Counts II, III and IV of its Counterclaim, Defendant alleged Plaintiff’s willful and aggravated breach of the collective bargaining agreement (Count II), fraud and misrepresentation in the making of the collective bargaining agreement (Count III), and wrongful interference with and impairment of the Union’s duty and responsibility to represent the employees in the bargaining unit (Count IV). Answer and Counterclaim, pp. 10-12. In its Order dated June 18, 1991, this Court granted Plaintiff’s Motion to Dismiss Counts II, III and IV of Defendant’s Counterclaim. Thus, Plaintiff is left with only Count I of its Counterclaim. Therein, Defendant alleges that Plaintiff’s “refusal to abide by the Arbitrator’s Award constitutes a flagrant and unjustifiable breach of the collective bargaining agreement.” Answer and Counterclaim, p. 9. Defendant requests in Count I of its Counterclaim that the Court uphold and enforce the Arbitrator’s Award, and also requests attorney’s fees and costs of this action. Currently, both parties have moved for summary judgment.

DISCUSSION

I.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Reading Co.
253 U.S. 26 (Supreme Court, 1920)
Federal Trade Commission v. Cement Institute
333 U.S. 683 (Supreme Court, 1948)
United Steelworkers v. American Manufacturing Co.
363 U.S. 564 (Supreme Court, 1960)
United Steelworkers v. Enterprise Wheel & Car Corp.
363 U.S. 593 (Supreme Court, 1960)
Adickes v. S. H. Kress & Co.
398 U.S. 144 (Supreme Court, 1970)
Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Nf&M Corporation v. United Steelworkers Of America
524 F.2d 756 (Third Circuit, 1975)
Norma Rollins v. Techsouth, Inc.
833 F.2d 1525 (Eleventh Circuit, 1987)

Cite This Page — Counsel Stack

Bluebook (online)
778 F. Supp. 1576, 1991 WL 270594, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lockheed-aeronautical-systems-company-georgia-v-aeronautical-machinists-gand-1991.