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SHAHMOON INDUS. v. USW

December 29, 1966

Shahmoon Industries, Inc., Plaintiff
v.
United Steelworkers Of America, AFL-CIO et al., Defendants


Augelli, D.J.


The opinion of the court was delivered by: AUGELLI

This action is here on removal from the Superior Court of New Jersey. Plaintiff (Shahmoon) seeks to set aside or modify an arbitration award. Defendants (Union) counterclaim to have the award confirmed. The jurisdiction of this Court is invoked under 29 U.S.C.A. § 185.

 For some years Shahmoon has operated an iron mine and rock quarry in Mount Hope, New Jersey. In 1956, Shahmoon and the Union entered into a collective bargaining agreement. This agreement was amended from time to time. In the intervening years, economic conditions necessitated periodic layoffs and rehiring of Shahmoon employees. Prior to April 19, 1963, the collective bargaining agreement then in force provided that an employee would lose his job status after a layoff of two years. On April 19, 1963, Shahmoon and the Union, following negotiations, and after the termination of a six month strike, executed a new labor contract which, inter alia, extended from two to five years, the seniority and recall rights of Shahmoon employees.

 After the strike ended, Shahmoon, in connection with an expansion of its operations, commenced a recall of employees on layoff status. Included among these was one John Korpos. The employment of recalled men was made subject to a policy unilaterally established by Shahmoon which, as appears from the arbitrator's opinion and award in this case, operated as follows:

 
"All employees about to be recalled were requested to take a physical examination. The Company scrutinized the results of the examination to determine if (a) the employee's chest X-ray showed signs of 'dust' - silicosis - or (b) if the examination of his back indicated that he was not suited for heavy lifting duties. In the event either of these conditions was found, the Company refused to assign men to certain jobs which it considered, in its own judgment, to be extraordinarily 'dusty' and hence likely to aggravate a silicosis case, or which required heavy lifting if the problem was a back injury.
 
"If an employee filed a Workmen's Compensation claim for silicosis, and the Company doctor found no sign of the disease, but petitioner's doctor found a disability, the Company took the following position: If the Workmen's Compensation Commission found no silicosis, there would be no restriction on the employee's job opportunities, but if the Commission found silicosis on the basis of medical testimony of petitioner's doctor, the Company considered this finding conclusive and restricted the job opportunities of the employees to 'dust free' jobs. This policy was applied not only to newly recalled employees, but to employees who had been placed on a job before the Workmen's Compensation award was rendered. The application of the policy as well as the policy itself is challenged as inconsistent with the seniority provisions of the contract."

 The collective bargaining agreement between Shahmoon and the Union, in Article 11 thereof, prescribed a four-step grievance procedure. If resort thereto did not resolve a grievance, the same was required to be submitted to arbitration. Article 12 of said agreement, dealing with arbitration, contained a provision that the arbitrator was not empowered to add to, subtract from, amend, modify, or supplement, any of the terms of the agreement, but said article declared it to be the intention of the parties that all differences between them, or any employee, should be settled by agreement, or failing agreement, by arbitration. Also included in Article 12 was a "no strike" and "no lock-out" clause.

 Article 9A2 of the collective bargaining agreement, dealing with the seniority status of Shahmoon employees on layoff and recall, so far as is here pertinent, provided that:

 
"* * * Men who are laid off shall, during periods of less than full plant operations, be recalled on the basis of plant-wide seniority for any job in any department where they can qualify; and they shall return to their regular job when it becomes available. An employee incapacitated because of age or physical disability may be transferred, by mutual agreement of the Parties, * * *."

 On May 3, 1963, John Korpos, the recalled Shahmoon employee previously mentioned, filed a grievance, S-160, in which he charged that Shahmoon, in violation of the seniority provisions of the collective bargaining agreement, was "examining recalled Union members and making such examination a condition of employment." This grievance was duly processed, with Shahmoon denying any violation of the agreement, following which the grievance was submitted to arbitration.

 The record of the arbitration proceedings reveals divergent views concerning the extent and scope of the Korpos grievance, and the issue or issues intended to be resolved thereby. Shahmoon contended it had the right, on recall of employees, to require a physical examination as a condition of reemployment. The Union, while not objecting to the physical examinations, vigorously disputed Shahmoon's asserted right to use the results of such examinations as the determinative factor in placing recalled men in jobs other than those to which they would normally be entitled on the basis of their seniority rights. It was claimed that Shahmoon's unilateral action in this regard, without Union approval, was in contravention of Article 9A2 of the collective bargaining agreement. Shahmoon also took the position before the arbitrator that any award made by him could apply only to Korpos. The Union countered with the argument that the Korpos grievance was merely the vehicle used to test Shahmoon's right to make the results of physical examinations a condition of reemployment, and that all employees, situated as was Korpos, came within the intendment of the specific grievance submitted for arbitration. These opposing contentions of the parties took place against a testimonial background touching upon the hazardous nature of the work performed by Shahmoon employees. There was medical testimony regarding the different stages of silicosis and the effect thereof on an employee's ability to continue working in "dust-laden" jobs; also, the ability of employees with back injuries to work in jobs requiring heavy lifting. There was also testimony before the arbitrator that one of the main issues involved in the strike preceding the signing of the April 19, 1963 agreement, was the extension of the seniority and recall rights of Shahmoon employees from two to five years; that during the negotiations leading up to the settlement of the strike, it was anticipated that there would be a recall of employees on lay-off status; that at no time during these negotiations was any mention made of the requirement of physical examinations as a condition of reemployment; and that on recall, it was expected that an employee would have the right to return to his own job if it was available.

 The record contains much colloquy between the arbitrator and representatives of the parties regarding the issue or issues to be decided by the submission. In response to Shahmoon's request that the issue of the grievance be stated, the arbitrator said, "the basic one is whether or not the company is entitled to take action with the job status * * * of a recalled employee on the basis of a medical examination without, first, securing the approval of the union under Section 9A-2 of the contract." And again, the arbitrator stated it to be his understanding that the grievance was intended to embrace employees not recalled because of the results of physical examinations, as well as employees recalled and put in jobs other than those to which they were entitled by reason of their seniority. Shahmoon's position was that it would like to have the arbitrator decide, as the arbitrable issue, its right to make physical examinations a condition of employment. The bone of contention revolved around the use by Shahmoon of the results of such examinations in determining unilaterally the job status of recalled employees.

 There was also a discussion of "back pay" for the "employees" involved. The record is not too clear with respect to Shahmoon's position on this phase of the case. It does appear, however, that Shahmoon was not so much concerned about whether the Korpos grievance covered one or more individuals, as it was to have the arbitrator decide that Shahmoon was within its rights in instituting the unilateral policy relating to the placement of recalled employees.

 The arbitrator, after devoting three days to a hearing of the matter, made an award in favor of the Union in which he concluded that Shahmoon had "violated the collective bargaining agreement between the parties by restricting the jobs which employees may hold because of defects found in physical examinations or because of determinations of silicosis disability made by the Workmen's Compensation Commission * * *." It was determined that Article 9A2 of the collective bargaining agreement provided the exclusive method for dealing with job transfers of employees who became incapacitated because of age or physical disability, and that Shahmoon could not unilaterally make such job transfers under Article 9A2 without the consent of the Union. The arbitrator also decided that eight other employees, in addition to John Korpos, were affected by the Shahmoon ...


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