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FRIED v. GLENN ELEC. HEATER CORP.

October 13, 1961

David FRIED, Michael Chalecki, Sol Slonimsky and Eva Canabal, and Local 472, International Union of Electrical, Radio and Machine Workers (IUE, AFL-CIO), Plaintiffs,
v.
GLENN ELECTRIC HEATER CORPORATION, Defendant



The opinion of the court was delivered by: WORTENDYKE

The action is brought by certain employees of the defendant employer, and by Local 472, a labor organization constituting the collective bargaining representative for defendant's employees at its place of business in Newark, New Jersey. Jurisdiction is predicated upon the provisions of the National Labor Relations Act, 19 U.S.C.A. 141 et seq., particularly those of section 185 of that Title. Diversity jurisdiction is also claimed as between plaintiff David Fried, a citizen of New York and the defendant, a New Jersey corporation, under 28 U.S.C. 1331. The plaintiffs Michael Chalecki, Sol Slonimsky and Eva Canabal are all citizens of New Jersey. There exists no diversity jurisdiction as to them, although they purport to sue on behalf of themselves and of all others similarly situated.

Plaintiffs seek declaratory judgments under 28 U.S.C. 2201.

 On January 30, 1961, defendant (Glenn) entered into a written collective bargaining agreement with International Union of Electrical, Radio and Machine Workers (IUE, AFL-CIO) in behalf of and in conjunction with Local No. 472 (Local) of that organization. By the terms of that agreement, Glenn recognized Local as the sole and exclusive bargaining agent of all of Glenn's employees (excluding executive, professional, administrative, office and supervisory employees) engaged in production, maintenance and shipping, with respect to rates of pay, wages and hours, and other conditions of employment. That contract provided that all lay-offs and rehiring should be based on seniority, subject to the employee's being qualified, and that an employee's seniority rights should be lost through his resignation, dismissal for cause, failure to report for work after notice of recall from lay-off within a certain time, or lay-off or absence from employment for a period exceeding one year or for a period equivalent to his length of service, whichever was longer. Section 27 of the contract provides:

 'No employee shall be laid off while any work, which can be done with the facilities and skills in the shop is being farmed out, provided, however, that in the event it shall be more economical for the Company to farm out said work, or where the materials or product cannot be produced by the Company within the time required for delivery, the Company shall have the right to farm out said work. * * *'

 Section 32 of the contract provides:

 'No employee covered by this agreement who has been retained by the Company beyond this trial period (45 days as provided in section 31) shall be discharged without just cause. The Company shall give notice of any discharge to the shop chairman at least one (1) day in advance of such discharge unless there shall be danger to life, limb or property. The Union shall have the right to challenge the propriety of the discharge of any employee and any such discharge shall be considered a difference, dispute or grievance to be dealt with in accordance with the grievance and arbitration procedure hereinafter set forth.'

 The grievance procedure referred to is prescribed in sections 39 and 40 of the contract and consists of three preliminary steps to be followed by arbitration in the case of a grievance which remains unresolved after the preliminary steps have been taken.

 The individual plaintiffs are employees of the defendant and members of the plaintiff Local, and all parties are subject to the provisions of the collective bargaining agreement above referred to.

 While that agreement was (and it continues to be) in effect, and on or about May 31, 1961, Glenn gave notice to its employees and to the Local that the employer would discontinue all manufacturing operations not later than October 1, 1961; that all machinery, equipment, buildings and inventory had been or would be disposed of, but that the employer would continue its sales operations, representing approximately eight manufacturers of heaters and exhaust equipment, and would continue as a dealer in surplus electrical equipment. The notice added that various departments of the employer's business would be dissolved, closed and shut down prior to the stated day, but that the office, shipping and maintenance sections of the business would not be affected. It was further stated in the notice that work would be available for most employees until late in September, but that in any event, four weeks' notice would be given prior to dismissal. In June, 1961, it came to the notice of the plaintiffs, or some of them, through an article in a newspaper published in Erie, Pennsylvania, that the defendant employer was planning to move to that city where it intended to commence 'pilot' operations in September preliminary to full production in October, with some sixty employees.

 On or about June 21, 1961, a committee of Local met with officers of Glenn to negotiate for the protection of the seniority rights of Glenn's employees represented by Local, and requested that such employees be transferred to Erie, Pennsylvania, with full seniority rights, and that no employee be laid off from the Newark plant while any job which he could perform was available either in Erie or in Newark. The Local further demanded that if any employee could not be moved from Newark to Erie, severance pay be paid to him. Alleging that, despite the foregoing demands, Glenn has failed to take any steps to assure its employees that they would be transferred to the Erie location with their seniority rights, or that the Local would be recognized as the collective bargaining agent of the employees at the Erie location, the complaint further sets forth that the Local submitted to the employer a list of employees who were willing to be transferred to the Erie plant, provided their seniority status and other rights were protected. Responsive to the Local's inquiries in this regard, an unsigned notice was posted, presumably by the employer, at the Newark plant, on September 25, 1961, advising that all employees would probably be permanently laid off on October 6, 1961; that accrued sick leave and vacation pay would be paid when uniforms, towels and tools were turned in; and that all persons wanting to go to Erie should see a designated person by October 1. On September 27, 1961, Glenn advised Local by letter that the list of employees desiring to go to Erie which Local had submitted was incorrect, and that those desiring to move to Erie should apply to the new owner of the defendant's business. The employer expressly stated in its letter that the existing collective bargaining agreement would not carry over to the Erie plant, because there had been a change of ownership, management, personnel and location of the business, and that it would be for the Erie employees to decide whether they desired to be represented by Local. The letter concluded by advising that seniority rights acquired by the Newark employees would not be retained by any of them who might move to Erie.

 The plaintiffs Fried and Slonimsky have notified Glenn of their willingness to move with defendant's business to Erie, provided they may do so under the terms of the Union contract in effect with respect to the Newark plant, and with full seniority rights created by the terms thereof. Plaintiff Chalecki was inducted into the United States Army on September 22, 1961, and claims that he will have reemployment rights upon his discharge, in accordance with the applicable federal statute.

 Plaintiffs ask the Court to adjudicate (1) that the seniority and other rights of Glenn employees, members of plaintiff Local, will remain in full force and effect, notwithstanding the removal of the plant to Erie, and that said rights will survive the expiration of the current contract when it terminates on January 30, 1962; (2) that the removal of defendant's plant from Newark to Erie will not impair the seniority rights of its employees; (3) that Glenn is obligated to offer to Newark employees jobs at its new plant in Erie (a) with full protection of their seniority rights and (b) with full recognition of Local as their collective bargaining agent thereat.

 Plaintiffs also seek injunctive relief restraining Glenn from terminating the employment of any of the members of Local at the Newark plant unless he has first been offered employment at the Erie plant, with continuance of seniority and other rights under the Union contract, and directing Glenn to recognize the Local as the collective bargaining agent at the Erie plant.

 Upon the filing of the complaint, which was partially verified by two of the individual plaintiffs, an order was made, exparte, on September 29, 1961, directing the defendant to show cause why preliminary injunctive relief should not be granted in accordance with the prayers of the complaint. Upon return of this order to show cause, on October 5, 1961, affidavits were filed in behalf of the ...


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