LOCAL UNION NO. 2812 v. MISSOULA WHITE PINE SASH No. 83-3776.
734 F.2d 1384 (1984)
LOCAL UNION NO. 2812, LUMBER PRODUCTION AND INDUSTRIAL WORKERS, Plaintiff-Appellant, v. MISSOULA WHITE PINE SASH COMPANY, a Montana corporation, Defendant-Appellee.
United States Court of Appeals, Ninth Circuit.
Decided June 12, 1984.
Harland Bernstein, Bernard Jolles, Jolles, Sokol & Bernstein, P.C., Portland, Or., for plaintiff-appellant.
Sherman V. Lohn, Garlingon, Lohn & Robinson, Missoula, Mont., for defendant-appellee.
Before ANDERSON, FLETCHER, and FARRIS, Circuit Judges.
J. BLAINE ANDERSON, Circuit Judge:
Missoula White Pine Sash Co. (White Pine) discharged its fourteen most junior employees out of the 94 it had laid off, stating, "[W]e can see no reasonable expectations of being able to recall all our employees who are currently laid off due to the depressed economy." Local Union No. 2812, Lumber Production and Industrial Workers (Union) appeals the district court's judgment that the terminations were not a breach of the collective bargaining agreement between it and White Pine. We affirm, holding that the terminations were not a breach of the express provisions of the agreement nor did the agreement contain an implied covenant that White Pine could discharge its employees only for just cause.
No Breach of Express Covenant
The existence of an employee's seniority rights or any limitation of an employer's right to discharge must find its source in the collective bargaining agreement. Broniman v. Great Atlantic and Pacific Tea Company, 353 F.2d 559, 561 (6th Cir.1965), cert. denied, 384 U.S. 907, 86 S.Ct. 1343, 16 L.Ed.2d 360 (1966). The agreement between White Pine and the Union contains a "Hire and Discharge" provision:
We agree with the district court that this provision carefully protects White Pine's common law unrestricted right to discharge. If the employee believes that his discharge was unjust, the agreement provides for a grievance procedure by which he may air his complaint to the shop committee and the management. If, however, the management does not agree, the employee will not be reinstated. This comports
The Union, however, relies on two other provisions as support for its argument that the agreement restricts White Pine's discharge authority. The first is the "Union Security and Check-off" provision:
The Union contends that if the Hire and Discharge provision already affords White Pine an unrestricted right to discharge, this provision is redundant. It is not superfluous, however, in that unlike in the Hire and Discharge provision, the probationary employee is not allowed to file a grievance nor is White Pine required to notify the Shop Committee of the reason for the discharge.
The second portion of the agreement relied upon by the Union is the "Seniority" provision:
The Union interprets this provision to mean that when there is a slackness of work due to economic conditions, White Pine is required, no matter how dim the prospect of rehire, to lay off, rather than discharge, employees. Furthermore, the Union argues, since the agreement contains no limitation on the length of time an employee may remain on layoff status, the employee has a virtually unlimited right of recall.
In support of a mandatory layoff, the Union singles out the phrases, "In case of lay-off because of slackness of work, employees hired last shall be laid off first ...," and, "Any employee who is laid off shall be returned to work ... when operations are resumed." We believe the Union's emphasis to be misplaced. The provision is entitled "Seniority," not "Layoff," and when read as a whole merely delineates the mechanical operation of the seniority apparatus, i.e., the time at which seniority rights begin to accrue (after thirty work days), and, in the event White Pine chooses to lay off employees, the order in which the work force shall be reduced (employees hired last shall be laid off first), the order of rehire (those laid off first shall be rehired last), and the employee's position upon rehire (regular status).
Seniority rights, moreover, are expressly subject to forfeiture if the employee is discharged and not rehired within thirty days. The agreement contains no "discharge for just cause" qualification nor any limitation on White Pine's right to make good faith economic decisions concerning the size of its work force. White Pine's good faith is not questioned. Thus, we find no basis for
Local Lodge 2040, International Association of Machinists, AFL-CIO v. Servel, Inc., 268 F.2d 692, 698 (7th Cir.), cert. denied, 361 U.S. 884, 80 S.Ct. 155, 4 L.Ed.2d 120 (1959) (citation omitted).
No Implied Covenant to Discharge for Just Cause
Generally, unless restricted by the collective bargaining agreement, an employer may discharge an employee for good cause, bad cause, or no cause at all without violating the National Labor Relations Act as long as the motivation is not to punish protected union activity. L'Eggs Products, Inc. v. National Labor Relations Board, 619 F.2d 1337, 1341 (9th Cir.1980). The Union does not contend that these discharges were connected with union activity. Rather, it argues that the agreement contains an implied covenant that White Pine not terminate an employee except for just cause. It relies on the unpublished opinion in Local 2750 Lumber and Sawmill Workers Union v. Cole, No. 980 (D.Oregon 1978), rev'd in part, 663 F.2d 983 (1981) in which the court implied a just cause standard. The decision in the Cole case was based upon contract language which defined "grievance" as a complaint of "disciplinary action without just cause" and which provided that "[i]f upon investigation it is found that such employee was unjustly suspended or discharged, he [would be] reinstated upon such condition as the Union and Employer agree." (Emphasis added). We agree with the analysis of the district court that the agreement involved here is materially distinguishable from that in Cole:
Moreover, given that this agreement does not provide for arbitration, but does contain an express provision covering discharges, allotting to White Pine the "sole and exclusive right to hire, discipline and discharge any employee," indicates to us that the parties did not intend to limit the common law right of the employer to discharge at will. Had such been the intention, it could easily have been incorporated into the agreement. Cause for discharge is too important a matter to be thought to have been overlooked, and too customarily dealt with expressly, for us to assume that the parties either unconsciously left it out, or intentionally omitted it, thinking it to be implicit. It is not for this court to substitute its judgment for that of White Pine as long as White Pine exercises its prerogatives in good faith and in accordance with its contractual obligations. To do otherwise would be to subvert the collective bargaining process by remaking the collective bargaining agreement. Accordingly, the district court is
FLETCHER, Circuit Judge, dissenting:
I respectfully dissent. The majority holds that White Pine may discharge any or all of its laid-off employees at any time, without regard to seniority. Its interpretation of the collective bargaining agreement
The Supreme Court has recognized that "in common parlance and in industrial parlance" a discharge is quite different from a lay-off, which occurs "when the slackening of work require[s] a reduction in forces." Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 286-87, 66 S.Ct. 1105, 1111-12, 90 L.Ed. 1230 (1946). The only sensible interpretation of the contract which gives all of its terms meaning is one which recognizes the distinctive treatment the agreement and the contracting parties give to each of these situations. Provisions relating to "discharge," including Article VIII, which gives the employer the exclusive right to hire and discharge employees, and Article XIV, section G(2), which provides that an employee who is discharged forfeits seniority, refer only to the discharge of an employee who is actively working for the employer. The employer's right to discharge in this situation does not unreasonably conflict with seniority rights because it can be assumed that the employer will not arbitrarily terminate the competent workers it needs to keep its business going. Further, grievance procedures are provided for any such discharged employee who feels himself unjustly dealt with. The same assumption does not apply to the termination of laid-off employees for whom the employer has no immediate need, as the employer's conduct in this case demonstrates. The contract is specific that laid-off employees have an absolute right to be rehired in order of seniority, subject only to the express limitation that they be competent. Because the employer has violated the collective bargaining agreement by discharging laid-off employees, I would reverse.
- No Cases Found