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FEDERAL MEDIATION AND CONCILIATION SERVICE

In the Matter of the Arbitration between FMCS No. 18-1017


Pay Dispute
UNITED AUTO WORKERS LOCAL 86, Grievant Melanie Gingrich
Union,

and

INT’L AUTOMOTIVE COMPONENTS,


Employer.
___________________________________/

OPINION OF THE ARBITRATOR

August 1, 2018

After a Hearing Held June 5, 2018 in Perrysburg, Ohio

For the Union: For the Employer:


Chris Sims Christopher P. Mazzoli
Region 2-B, UAW Bodman PLC
1691 Woodlands Drive 201 W Big Beaver Road, Suite 500
Maumee, OH 43537-4018 Troy, Michigan 48084
Collective Bargaining Agreements 2004-2019

International Automotive Components (“IAC” or “Company”) operates a plant

in Wauseon, Ohio, at which hourly employees are represented by Local 86 of the

International Union, United Automobile, Aerospace, and Agricultural Implement

Workers of America (“Union”). The collective bargaining agreement for the period

November 15, 2004 through November 16, 2009 (p 50)1 contained the following

provision in Article 6, “Seniority”:

Section 11: Rate of Pay: the Associates who are reduced to a lower paying
classification shall receive the top rate of the job being performed. (p 19)

The various job classifications were listed on pages 51-53. Although there were different

wage scales for CURRENT HOURLY EMPLOYEES (p 51) and NEW HIRE (p 52),

there was no stratification within job classifications. On page 53, the TOP PAY RATE

for each classification was set forth.

The next collective bargaining agreement, then between IAC Corporation and the

Union, covered the period of November 9, 2009 through November 9, 2012 (p 47).

Wages were frozen at the rates stated on page 48, “effective 4/1/2007”. Article 6, Section

11 contained virtually identical language:

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The employer at that time was Lear Corporation. At the arbitration hearing, corporate history was not
addressed, and only the current CBA (JT Ex # 1) and an incomplete copy of the 2012-2015 CBA
(Employer Ex # 1) were introduced, as were excerpts from the 2004-2009 CBA (Union Ex 2) and from
2012-2015 (Union Ex 3). By letter dated June 8, 2018, the arbitrator requested complete copies of
contracts and additional information. The Union responded by letter dated July 16, 2018. The Employer
responded by letter dated July 23, 2018.

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Associates who are reduced to a lower paying classification shall receive the top
rate of the job being performed. (p 17)

Again, there was no stratification within job classifications.

The contract covering the period November 10, 2012 through November 9, 2015

(p 73) contained language in Article 6, Section 11 (p 28) identical to that in the previous

contract. However, a two-tiered wage scale was introduced in Article 15, “Wages” (pp

73-77). Tier I employees were those hired before 11/9/2009 (p 73); Tier II those hired

after 11/9/2009 (p 76).2 It is from this new two-tiered arrangement that the instant case

arose during the current contract period.

The current CBA (JT Ex # 1) covers November 10, 2015 through November 15,

2019 (booklet cover & p 69). Article 6, Section 11 continues the earlier language, which

forms the basis of this dispute:

Associates who are reduced to a lower paying classification shall receive the top
rate of the job being performed. (p 27)

The two-tiered wage scale also was continued in Article 15, “Wages” (pp 69-75).

The Grievance

Grievance No. 17-055 was filed 5/25/17 on behalf of a nominal employee in the

Assembly Classification. It stated in pertinent part:

* Protest and Charge:


The company is in violation of Article 6, Section 11 of the C.B.A.
[Grievant] was displaced to Ford 2 assembly. Per Article 6, Section 11 associates
who are reduced to a lower paying classification shall receive the top rate of the

2
The provisions are somewhat more complicated, but this summary suffices.

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job being performed. The company is not paying [Grievant] the top rate of pay
for Ford 2 assembly. [Grievant] was displaced from a higher paying
classification, Cycle Counter.

** Remedies and Demands:


The company must comply with Article 6, Section 11 of the C.B.A. The
company shall make [Grievant] and all other affected associates whole in every
way, including back pay for any lost wages under Article 6, Section 11 of the
C.B.A. (JT Ex # 2)

It is unclear why the issue came to a head in May of 2017, inasmuch as the two-tiered

wage structure has been in effect since November of 2012.

The Human Resources Manager addressed the grievance in a letter dated June 26,

2017:

The Union, in this grievance, is protesting that [Grievant] is being denied rates of
pay rights due to her displacement.

An investigation of the grievance reveals that [Grievant] is receiving the correct


pay within his [sic] current Tier and pay progression.

The actions taken by management in this case were just and proper. The Union’s
demand, and the grievance, is therefore denied. (JT Ex # 3)

In a letter dated August 22, 2017, the Senior Manager, Human Resources,

International Automotive Components (“Senior HR Manager”), wrote the International

Representative, UAW Region 1D (“International Rep”); only the portion pertaining to

grievance # 17-055 is set forth:

On August 3, 2017, the Company and the Union met at the Company’s facility in
Wauseon, OH to discuss four grievances that had been appealed to the 4th step of
the grievance procedure. The results of those discussions follow. …

Grievances # 17-055 & # 17-057

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The Union, in these grievances, alleges the Company is in violation of Article 6,
Section 11 of the Collective Bargaining Agreement (CBA) as it applies to pay
rates of [Grievant] (17-055) and [T. E.] (17-057).

An investigation of this grievance reveals that while [T. E.] (who has since left
the Company) was displaced in accordance with his seniority by a reduction in
force, [Grievant] elected to decline her current classification and accept one at the
lower rate.

Notwithstanding the above, the Company maintains that no violation of the


agreement has occurred. Employees [Grievant] and [T. E.] are Tier II employees
(hired after 11/09/2009) and are being paid at the appropriate rate consistent with
the Company’s long standing and accepted practice of applying wage rates as
specified in the General Assembly wage scale of the CBA.

Therefore, grievances # 17-055 and # 17-057 and the accompanying demands are
denied. (JT Ex # 4)

The Union appealed the matter to arbitration in December of 2017. The arbitrator

was appointed by the Federal Mediation and Conciliation Service on January 23, 2018.

The parties agreed to meet again to resolve the matter and avoid arbitration. The meeting

took place on January 26, 2018. (Union brief at 4-5)

The final letter introduced at the arbitration hearing was dated February 28, 2018,

and was sent by the Senior HR Manager to the International Rep. It stated:

On January 26, 2018, the Company and the Union met at the Company’s facility
in Wauseon, OH to discuss seven grievances that had been appealed to the 4th step
of the grievance procedure. During the meeting additional discussion was held
regarding Grievance # 17-055 in the hopes of avoiding arbitration in this case.

While the parties agreed that the Company has consistently applied the language
of Article 6, Section 11 of the Collective Bargaining Agreement (CBA) as it
applies to pay rates, the Company was persuaded by the Union to amend its
application of this section and define “top rate of the job being performed” as the
Tier I rate in force at the time of the displacement into the new classification.

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Further, the Company has agreed to adjust the pay rate of those employees
currently being paid under the historical interpretation of Art 6, Sec 11, to the rate
of pay consistent with the newly adopted definition effective Monday January 29,
2018.

Having been persuaded by the Union’s argument, however, the parties could not
reach an approved agreement regarding pay adjustments for hours worked prior
to reaching this understanding. (Union Ex 4)

The Union was dissatisfied with the Company’s decision on back pay and proceeded

with arbitration on June 5, 2018.

The Arbitrator’s Post-Hearing Request

The arbitrator left the hearing with unanswered questions. On June 8, 2018, he

wrote the letter set out below; the parties’ respective responses are in italics.

Enclosed is a copy of the signature page from the current CBA, JT 1. The page, 93, is
blurred on my copy, but it appears to be dated March 9th, 2018. This seems quite
surprising, but I examined the date with a magnifying glass and it definitely appears to
be 2018 on my copy. Is that correct? It is crucial for an arbitrator to have accurate and
complete copies of all documents.

Union Response: In an email sent 7/17/2018, the Union representative stated, “The
contract was not ratified to roughly 5 months after it expired in November of 2015.”

Company Response: “JT # 1, the November 10, 2015 – November 15, 2019 collective
bargaining agreement, was executed on March 9, 2016.”

While brevity may be the soul of wit, that measure does not necessarily apply to the
length of an arbitration hearing. From my perspective as a decision-maker, I need
additional information in order to decide the case correctly. I am hoping that the parties
can agree on responses to my questions, so that a second evidentiary hearing will prove
unnecessary.

1. The evidence regarding contract documents is incomplete:

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Union 2: November 15, 2004 through November 15, 2009. I would like to have
the entire bound booklet, like JT # 1.

Union Response: The Union emailed a copy on 7/17/2018.

Company Response: “Please see Exhibit 1 for a copy of the entire bound
booklet.”

Missing: The booklet covering the period November 16, 2009 through
November 9, 2012 was not furnished. I would like to have the entire bound
booklet, like JT # 1.

Union Response: The Union emailed a copy on 7/17/2018.

Company Response: “Please see Exhibit 2 for a copy of the entire bound
booklet.”

Employer # 1: November 10, 2012 through November 9, 2015. The cover page
is included in Union 3. My copy of Employer # 1 is incomplete; e.g., Article 16
was omitted. I would like to have the bound booklet with page numbers, like JT
# 1.

Union Response: The Union emailed a copy on 7/17/2018.

Company Response: “Please see Exhibit 3 for a copy of the entire bound
booklet.”

JT # 1: November 10, 2015 through November 15, 2019. On page 72 under


General Assembly, the phrase “See Wage Table” appears without explanation.
See also Union 1. Please explain what that means and if it refers to a separate
document, I would like to have that document.

Union Response: None.

Company Response: “The ‘Wage Table’ is a reference to the ‘Tier II New Hire
Scale” which appears on page 75.”

2. When was Grievant hired?

Union Response: July 8, 2013.

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Company Response: July 8, 2013.

3. When was Grievant displaced from a higher paying classification, Cycle Counter,
to Assembly?

Union Response: May 15, 2017.

Company Response: May 15, 2017.

4. What was Grievant’s wage rate before she was displaced? Please reference the
page, Article, Section, and Classification of the applicable CBA.

Union Response: “Rate of pay before displacement was $17.00 (current CBA
page 73 Tier 2 Indirect Cycle Counter under 11/7/16 wage column).”

Company Response: “Grievant’s wage rate before she was displaced was
$17.00, which is the Tier 2 Cycle Counter wage rate under Article 15 which
appears on page 73.”

5. What was Grievant’s wage rate after she was displaced? Please reference the
page, Article, Section, and Classification of the applicable CBA.

Union Response: “Rate of pay after displacement is $14.50 (page 75, three years
of service effective 11-7-16 wage column).”

Company Response: Grievant’s wage rate after she was displaced was $14.50
per Article 15, Tier II New Hire Scale which appears on page 75 for someone
with 3 years as of the November 7, 2016 effective date.

6. What is Grievant’s wage rate that the Union is claiming she should receive?
Please reference the page, Article, Section, and Classification of the applicable
CBA.

Union Response: “Rate of pay Union is claiming she should receive is $16.16 at
the time of grievance (page 70 General Assembly effective 11-7-16).”

Company Response: “It is IAC’s understanding that the Union contends Grievant
should have received $16.16 per the Tier 1 General Assembly wage rate under
Article 15 which appears on page 70.”

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7. For what period does the Union claim that Grievant is owed back pay? How does
the Union arrive at the amount of back pay?

Union Response: “Period for back pay – from date of grievance May 25, 2017.
Please see explanation below:
25 Weeks @ $1.66 = $1,713.12 ($16.16 minus $14.50 = $1.66)
12.9 weeks @ $2.16 = $1,114.56 ($16.66 minus $14.50 = $2.16)
Total $2,827.68”

“** When costing the contract in 2016, we agreed to a 30% markup to cover over
time. I applied the 30% to the $2,827.68 and came up with $3,675.98**”

Company Response: “This question is not directed at IAC. However, IAC notes
that under Article 5, Section 5 which appears on page 14, the Arbitrator ‘shall
not be empowered to … order back pay for a period longer than thirty (30) days
prior to the submission of the written grievance.’”

I shall appreciate your assistance, as I came away from the short hearing with more
questions than answers.

The Issues Presented

The parties did not stipulate the issues presented. In the Union’s brief on page 10,

the issue is posed as: “Did the Employer violate the agreement when it defaulted on the

grievance settlement with the Union?” The putative agreement was:

A) All affected employees would begin to receive the higher rate of pay
requested by the Union effective February 5, 2018.

B) The Employer would pay the affected employees back pay of a $1,700 lump
sum. The Employer agreed to pay the lump sum by March 1, 2018. (Union
brief at 5)

The Company poses two questions:

1. Should the Arbitrator deny the grievance, because the Union did not prove that
IAC breached Article 6, Section 11 when it paid Grievant the Tier 2 General
Assembly rate after she voluntarily declined her Tier 2 Cycle Counter position in

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favor of a General Assembly position?

2. Should the Arbitrator deny the grievance, because IAC and the Union did not
agree to settle the grievance, did not reduce the settlement to writing, and did not
enter into a written agreement to amend the collective bargaining agreement as
required under Article 12, Section 4, and because the Union did not present any
evidence disputing IAC's interpretation and application of Article 6, Section 11?
(Company brief at 1)

To the arbitrator, the issues are whether the parties reached an agreement on

January 26, 2018 and, if so, what are its terms?

The Union’s Position

The Union is emphatic that an agreement was reached on January 26, 2018:

The Employer agreed to this settlement without condition or qualification.1


1
[The Senior HR Manager] testified that the agreement was conditioned on his
receiving approval. The Union witnesses, [S. W.], [E. H.] and [F. M.] all testified
that [he] made this agreement unconditionally and never stated that he needed
approval from other managers or his “higher up.” (Union brief at 5)

Union witnesses [E. H.], [S. W.] and [F. M.] all testified that [the Senior HR
Manager] and [the International Rep] reached an agreement on the instant
grievance. All three witnesses disputed [the Senior HR Manager’s] assertion that
he made the agreement conditionally, pending approval from other Company
authorities. (Union brief at 6)

There is no dispute that an agreement was reached, and all the principals shook
hands on it. (Union brief at 7)

The Company’s Position

The Company’s position is that there was no agreement. For example, the

Company’s brief at 7 states:

[The Senior HR Manager] sent the [International Rep] a letter dated February 28,

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2018 reiterating the terms of IAC's offer to settle Grievance No. 17-055. (Union
Ex. 4). IAC, through [the Senior HR Manager], stated that notwithstanding IAC's
consistent administration of Article 6, Section 11, IAC was willing "to amend its
application of this section and define 'top rate of the job being performed' as the
Tier 1 rate ... " and to apply the amended application on a going forward basis to
the affected employees. (Union Ex. 4). [The Senior HR Manager] also confirmed
that the parties had not reached an agreement regarding back pay for any of the
affected employees. (Union Ex. 4). The Union did not accept IAC's proposed
resolution and instead it decided to proceed with this arbitration.

Discussion of the Issues

This case is not so much about the arbitrator interpreting Article 6, Section 11 of

the collective bargaining agreement as it is about determining whether, on January 26,

2018, the parties agreed to a new application of the existing contract language. In

reaching his decision, the arbitrator relies in general upon the contract as a whole and in

particular upon the following provisions:

Article 5, “Grievance Steps”, Section 1: Purpose:

The purpose of the grievance procedure is to resolve differences in interpretation


of the provisions of the Agreement. (p 11)

In this case, the Union is urging that the parties actually agreed upon a different

interpretation, and hence application, of Article 6, Section 11. The Company denies that

any agreement was reached.

Article 5, Section 6: Disposition of Grievances:

Power of Settlement: The Company shall have full authority to settle grievances;
likewise, the Union will have full authority to settle, adjust, modify the grievance,
up to and including, withdrawing the grievance at any time. (p 14)

From the date the grievance (JT Ex # 2) was filed, 5/25/17, until the hearing on 6/5/18,

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the Union’s position on the grievance has been modified from merely arguing over the

meaning of Article 6, Section 11 to insisting that there has been a resolution of the

grievance.

Article 5, Section 9: Company and Union Agreements:

It is mutually agreed and understood that any Agreement reached by the


Company and the Union is binding and cannot be changed by an individual. (p
15)

Although the word “Agreement” is capitalized as though it is a term of art, the arbitrator

does not read it that way. Instead, he gives it its common meaning. There does not seem

to be any consistent capitalization of the term in the CBA (JT Ex # 1). For example, on

page 1, the current CBA is referenced as both “This agreement” and “this Agreement”;

see also Article 14 (p 69). As a result, each occurrence of the word must be viewed in

context. Like so many collective bargaining agreements, JT Ex # 1 suffers from

inconsistencies resulting from multiple amendments by multiple drafters and, in this

case, by multiple companies.

Note that Section 9 of Article 5 does not expressly require that “any Agreement”

be in writing. Furthermore, the words “writing” and “written” are used throughout the

CBA without explicitly requiring signatures. Cf. Article 2, Section 3, “the signing of this

Agreement” (p 3); Article 2, Section 4, “executes, or has executed … an authorization”

(p 4); Article 2, Section 7 “signed by the Union Chairperson” (p 6).

It is especially important to note that Section 9 is specific to Article 5 governing

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“Grievance Steps”, whereas Section 4 of Article 12 is but one of several “General

Provisions”. It is a widely accepted principle of contract interpretation that the specific

governs over the general:

If there is specific language in the agreement covering an issue, it will normally


be held to supersede another more general clause.72
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Ford Motor Co. v. Plant Protection Ass’n, 770 F.2d 69, 120 LLRM 2008, 2012
(6th Cir. 1985).

Hill & Sinicropi, Evidence in Arbitration (BNA, 2nd ed, 1987) at 364; see also Elkouri

& Elkouri, How Arbitration Works (ABA/Bloomberg BNA, 8th ed, 2016), at 9-41—9-

42; OPEIU Local No. 268 and UAW Local No. 1853, 04-1 ARB ¶ 3821, 2004 WL

60802313. The arbitrator applies this principle in deciding the case.

Article 5, Section 14: Reinstitution of Grievances:

This letter is not to be construed … . It is also understood by the parties that this
letter of understanding … . (p 18)

See also “Letters of Intent” (pp 89-92). Obviously, letters may be incorporated into the

CBA.

Article 12, “General Provisions”, Section 4: Sole Agreement:

All agreements either oral or written, between the parties are hereby canceled and
this Agreement shall constitute the only agreement between the parties and shall
not be modified except in writing and by mutual agreement. (p 60)

Equally obviously, the parties acknowledged that oral agreements may govern certain

3
Slip opinion available at https://www.scribd.com/document/385032445/OPEIU-Local-268-and-
UAW-Local-1853-5-4-04

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aspects of the Union-Company relationship. This provision applies to those agreements

that may have existed when the CBA was executed on March 9, 2016. See How

Arbitration Works, supra, Ch 12.7 (“zipper clauses”).

As the Union notes in its brief, there were two aspects to the discussion between

the parties on January 26, 2018: A) wages going forward, and B) back pay. In its brief,

the Company characterizes its letter of February 28, 2018 (Union Ex 4) as a mere “offer”

that was not accepted by the Union inasmuch as the Union proceeded with the previously

scheduled arbitration. However, the Company never withdrew its so-called offer, and

Article 5, Section 9 encompasses “any Agreement”. It simply cannot be doubted that the

Union accepted the Company’s “offer” with respect to A)—it’s just that the Union

wanted back pay B) as well.

Moreover, the language of Union Ex 4 respecting A) is not that of an “offer” but

that of a done deal: “Further, the Company has agreed … .” In addition, the Company’s

letter makes no mention of any need to formally amend the CBA but states only that

“the Company was persuaded to amend its application” of the disputed Section. The

arbitrator applies Article 5, Section 9, which contains no explicit requirement other than

an accord, and finds that the parties reached agreement on wages going forward. As to

back pay covering hours worked before January 29, 2018, there was no agreement.

The parties vigorously contest the issue of compensation before January 29, 2018.

Union witnesses E. H. and S. W. expressed great dismay at the Company’s letter of

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February 28, 2018. They felt that they had a deal on $16.66 an hour for Grievant going

forward and $1,700 back pay for hours worked from the date of the grievance, May 25,

2017. Nevertheless, the Union’s argument for back pay is unconvincing.

The Senior HR Manager said he told attendees at the January 26, 2018 meeting

that he needed to run some numbers. He was not sure exactly how many employees

were affected, although the number appears to have been about 20. There was no

explanation as to why paying approximately 20 employees $1,700 each, a total around

$34,000, was unacceptable to the Company. Perhaps it would have set a bad corporate

precedent, but there is little use in speculating—the Company’s answer was “no” (Union

Ex 4).

In an attempt to rebut the Company’s defense, the Union called employee F. W.

as a witness. He has worked at the Wauseon plant since November of 1999. He attended

the determinative meeting of January 26, 2018. He testified that he, too, thought they

had a deal, but conceded that the Senior HR Manager wanted some additional

information affecting the $1,700 lump sums.

Because this is not a disciplinary case, the burden of proof is on the Union. AFGE

Local No. 3981 and Bureau of Prisons, 14-2 ARB 6299, 2014 WL 5359268, 114

LRP 40714.4 Given the conflicting testimony about the lump sums for hours worked

4
Slip opinion available at http://www.scribd.com/doc/240266623/AGFE-Local-3981-and-Bureau-of-
Prisons.

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before January 29, 2018, the arbitrator does not feel that the Union has born its

burden of proof on that issue.

Points Made in the Company’s Brief

The Company made a number of points in its brief that merit response. As to the

first question posed on page 1, the arbitrator has determined that the fundamental issue

is whether the parties resolved their differences over Article 6, Section 11 on January

26, 2018. He has found that they did with respect to hours worked on and after January

29, 2018, and that employees are not entitled to compensation for hours worked before

then.

As to the Company’s second question on page 1 of its brief, footnote 3 on page 8

of that brief states in pertinent part:

[O]ne could reasonably contend that in light of the two-tier wage structure and
consistent past practice, the "top rate" means the top rate of the employee's
corresponding tier, i.e., the top Tier 1 rate for Tier 1 employees and the top Tier
2 rate for Tier 2 employees. One could also contend that, as now alleged by the
Union for the first time, the "top rate" means the Tier 1 rate irrespective of the
employee's corresponding tier.

Though there is nothing unreasonable about the Company’s interpretation, there is no

written agreement expressly authorizing or ratifying it. Furthermore, there really is no

need to amend the CBA, as the Company effectively concedes that Article 6, Section 11

admits of the Union’s interpretation as the language currently is written. Although the

CBA does not prohibit oral agreements, the Senior HR Manager’s letter (Union Ex 4) is

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a writing and is signed by the authorized agent of the party being charged.5

The arbitrator’s resolution of issues A) and B) probably moots most other issues,

but the arbitrator notes in passing that, despite the Company’s assertions of consistency

in its interpretation of the disputed language, the evidence presented is insufficient to

establish a past practice. International Paper Co, 127 LA 564, 10-1 ARB ¶ 4885, 2010

WL 6772557, 110 LRP 13423.6 In footnote 6 on pages 11-12 of its brief, the Company

argues that claims of affected employees other than Grievant herself likely would be

untimely. That argument itself is untimely. AFGE Local 3981 and Bureau of Prisons,

14-2 ARB ¶ 6299, 2014 WL 5359268, 114 LRP 40714.7

The language added to Article 15 in the current CBA does not directly address

Article 6, Section 11 but appears only to limit Tier II wages. Company brief at 5, 11-12.

Finally, the Company’s argument on pages 8-12 of its brief at times seems to conflate

Grievant’s 4th step hearing with those of seven other employees whose 4th step hearings

were held on January 26, 2018. Grievant’s 4th step meeting was held on August 3, 2017,

and the grievance was denied in JT Ex # 4 dated August 22, 2017.

AWARD

The grievance is sustained as to the new interpretation of Article 6, Section 11,

5
If Ohio law required a written agreement, ORC Section 1335.05 would require only that it be signed
by the Company’s authorized agent.
6
Slip opinion available at https://www.scribd.com/document/46508595/PACE-Local-1161-and-
International-Paper-2-19-10.
7
Slip opinion available at https://www.scribd.com/doc/240266623/AGFE-Local-3981-and-Bureau-of-
Prisons.

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upon which the arbitrator finds that the parties agreed. The grievance is denied as to

hours worked before January 29, 2018.

The parties shall meet on or before August 17, 2018 and attempt to agree upon

the employees affected and the amount owed each one. No interest is awarded on money

owed. Amounts owed shall be paid by August 31, 2018.

The parties shall submit disputes over implementation of this Award, to the

arbitrator in writing.

________________________________
E. Frank Cornelius, PhD, JD, Arbitrator

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