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GIORDANO v. MACK TRUCKS

April 12, 1962

Lawrence GIORDANO et al., Plaintiffs,
v.
MACK TRUCKS, INC., a corporation of the State of New York, Defendant



The opinion of the court was delivered by: LANE

On October 20, 1961, plaintiffs, comprising some 116 individuals, were among those employed at defendant Mack Trucks' manufacturing plant in Plainfield, New Jersey. The Master Bargaining Agreement, entered into between plaintiffs' collective bargaining representative -- the International Union, United Automobile Workers of America (U.A.W.) -- and defendant, terminated on that date.

On October 31, 1961, the U.A.W., certified representative of all Mack employees, culminated lengthy negotiations over Mack's prospective transfer to Hagerstown, Maryland, by executing the 'Shop Separation, Pension and Transfer Agreement.'

 Plaintiffs, seeking to enforce their alleged vested rights, are asking damages of $ 11,850,000. They are New Jersey citizens; defendant Mack Trucks, Inc., is a New York corporation whose principal place of business is in New York. Jurisdiction is based on diversity.

 Motions were before this court wherein plaintiffs applied for:

 1. An order restraining defendant from hiring any further employees at its Hagerstown, Maryland, plant.

 2. An order directing a survey be conducted under supervision of this court to determine which of defendant's employees formerly employed at its Plainfield, New Jersey, plant wish to transfer to the Hagerstown, Maryland, plant.

 3. An order striking defendant's Third, Fourth, Sixth, Seventh, Eighth, and Ninth Separate Defenses.

 The court advised the parties that it would first consider the more material issue as to whether an examination of the pleadings would demonstrate that there had been set forth a cause of action upon which relief could be granted. We allowed counsel two weeks in which to prepare briefs and oral arguments on this question.

 THE COMPLAINT

 In the First Count, the plaintiffs allege that as employees of defendant they are members of Local 343, U.A.W., a subordinate unit of the international union that had been certified by the National Labor Relations Board as the exclusive collective bargaining representative for the plaintiff-employees at the Plainfield plant of defendant Mack; that the master agreement executed by defendant Mack and U.A.W., the collective bargaining representative, terminated on October 20, 1961; that, prior to said date, plaintiffs, as employees of defendant, had acquired many vested rights which extend beyond the date of termination; that prior to the termination date defendant Mack had announced its intention to close its Plainfield plant and to relocate at Hagerstown, Maryland; that defendant's decision to relocate at Hagerstown was not based upon any legitimate business interests but rather constituted an attempt by defendant Mack to run away from its normal and vested contractual obligations to its employees; that defendant Mack, by unilateral survey, had asked its employees, including plaintiffs, whether they would be willing to relocate at Hagerstown if offered jobs there; that at no time has defendant actually offered a job at Hagerstown to any of the plaintiff-employees nor has Mack spelled out to its employees the conditions as to wages and conditions of employment to be encountered at Hagerstown; that, on the contrary, defendant Mack has made it apparent that it is not desirous of taking its employees at Plainfield to its new plant at Hagerstown, with the exception of certain arbitrarily selected employees; that defendant Mack has offered 'double severance' to employees at Plainfield who agree in writing to terminate at Plainfield and has requested those who had evidenced an interest in going to Hagerstown to change their minds for a consideration of 'double severance'; that the actions of defendant are designed to deprive plaintiffs and other employees at Plainfield from gaining normal contractual rights in which they have a vested interest and that such rights survive the termination of the master contract; that the actions of defendant constitute a breach and violation of the master agreement and have prevented plaintiffs and other employees from further performing under the master agreement; and that by reason of the wrongful acts of defendant, plaintiffs have been individually damaged to the extent of $ 50,000 and collectively in the sum of $ 11,850,000.

 In the Second Count, the plaintiffs allege that each of the three surveys undertaken by defendant Mack were conducted unilaterally; that a new survey should be undertaken under the supervision of the court and that it should delineate working conditions, wage scale, and the extent of vested rights that have accrued to those who desire to transfer from Plainfield to Hagerstown; that the terms of the master agreement should be held to govern prospective transfers from Plainfield to Hagerstown; and that an injunction should be issued preventing the hiring of new employees at Hagerstown until the determination has been made as to the new survey and as to the application of the master agreement in relation to relocation.

 In the Third Count, the plaintiffs contended their action is a class action and they invite other members of the class to join.

 Plaintiffs in the Fourth Count allege that defendant Mack offered to employees 'double severance' in consideration for non-physical interference with the moving operation from Plainfield to Hagerstown; that plaintiffs as well as their fellow employees did not interfere with such moving operations; that defendant, having benefitted from such non-interference has wrongfully demanded of plaintiffs and other employees that they sign a release in respect to all their accumulated vested rights before defendant will pay over the agreed sum for such non-interference; and that an accounting should be had in regard to these moneys lawfully due plaintiffs.

 In the Fifth Count of the complaint, it is alleged irreparable harm will be done to plaintiffs if defendant is allowed to hire new employees at Hagerstown before a determination of the rights of the plaintiffs, as recited in the complaint, has been made, and that, therefore, an injunction preventing defendant from hiring any new employees at Hagerstown should be issued, pending such determination.

 THE ANSWER

 Defendant Mack Trucks in its answer sets out the following separate defenses:

 1. Complaint fails to state a claim upon which relief can be granted.

 2. Court lacks jurisdiction of the action and the subject matter thereof.

 3. Plaintiffs are barred and estopped from claiming 'vested rights' under any expired collective bargaining agreements.

 4. On October 31, 1961, Defendant and U.A.W., the collective bargaining agent for all employees, including plaintiffs, entered into a separation agreement whereby the rights of all employees as to termination at Plainfield and employment at Hagerstown are fully established.

 5. Plaintiffs waived relief sought here by virtue of their representative's participation in the separation agreement.

 6, 7, 8, and 9. Arbitration provision of separation agreement must be utilized by plaintiffs; their failure to exhaust remedies thereunder acts as a bar to this action.

 10, and 11. Plaintiffs are barred and estopped from seeking an additional survey by reason of their agent's approval of the survey completed and the incorporation thereof in the separation agreement.

 THE SEPARATION AGREEMENT

 The Shop, Separation, Pension and Transfer Agreement, attached to and made part of the answer of the defendant, was made on October 31, 1961, between Mack Truck, Inc., defendant herein, and the International Union, United Automobile, Aircraft and Agricultural Implement Workers of America, AFL-CIO. At the beginning thereof, it is stated:

 'The company and the union have concluded an agreement covering all of the terms relating to the separation, pension and transfer of the Plainfield employees within the collective bargaining unit.'

 A. TRANSFER

 1. and 2. Employees who have affirmatively signified on the third survey that they wish to transfer to Hagerstown should be offered an opportunity to transfer to Hagerstown within a period of one year from November 1, 1961, if they have certain qualifications, which are thereupon listed.

 3. It is understood however, that their relative seniority under any collective bargaining agreement that may hereinafter be executed at Hagerstown shall not be affected by the order in which the Plainfield employees commence employment at Hagerstown.

 4. * * *

 5. The company may, however, in its discretion, offer an opportunity to Hagerstown to any other Plainfield employees, irrespective of whether they meet any of the foregoing qualifications or other requirements contained in this agreement.

 6. Upon acceptance of an offer and commencement of employment at Hagerstown, a Plainfield employee shall receive an allowance of $ 200 to be ...


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