no promise that Singer will refrain from discontinuing operations in Elizabeth. Therefore the Court will not enter an injunction restraining defendant from closing the plant if it chooses to do so. On the other hand, the Court finds that within a few short months after the agreement had been signed, and after having extracted substantial "give-backs" from its employees, Singer breached a clearcut obligation both to spend $ 2 million to restructure the plant and to use its best efforts to secure defense contracts and otherwise maintain the facility as a viable economic entity. Accordingly, although the Court will not compel Singer to stay in business, we will not permit a company in clear breach of its collective bargaining agreement to escape its responsibility to answer in damages. Instead, the Court will award plaintiffs monetary damages in an amount to be measured either by the value of the union "give-backs," which will be determined at trial, or by the $ 2 million Singer promised, but failed, to spend, whichever is greater.
The plaintiffs in this action are Local 461, the collective bargaining representative for the workers employed by defendant Singer at the Elizabeth facility; District III of the International Union of Electrical, Radio and Machine Workers, a regional organization representing union members in the New Jersey-New York area including those workers who are members of Local 461; several named officers and members of Local 461; and New Jersey State Assemblyman Raymond Lesniak, who represents the district in which the Singer plant is located.
Defendant Singer's Elizabeth facility, which occupies some 1.4 million square feet, houses industrial sewing machine and sewing machine parts manufacturing operations and offices for various marketing and miscellaneous administrative activities. Singer has maintained operations in Elizabeth since 1877 and Local 461 has represented the Singer employees at this location since 1949. At its peak, the facility employed approximately 10,000 employees. According to defendant, as recently as 1973 about 300,000 industrial and consumer sewing machines were produced at Elizabeth, of which 24,000 were industrial. At that time, the plant employed 3,500 employees. By January 1980, due to decreased consumer demand, increased competition, particularly from foreign sources, and the transfer of a percentage of Singer's manufacturing activities overseas, the Elizabeth workforce had been reduced by more than half to 1,530 employees. Later that year, the company announced that it was discontinuing the manufacture of consumer products at Elizabeth. Since that announcement, the number of employees at the plant, now devoted exclusively to the manufacture of industrial machines, has steadily declined.
With all sides recognizing that the viability of the plant was in jeopardy, the parties entered negotiations in the spring of 1981 aimed at reaching a new collective bargaining agreement. On June 21, 1981, after having extended the deadline on contract talks by mutual consent, the company and Local 461 entered into a Memorandum of Agreement modifying and extending the previous collective bargaining agreement between the parties. That contract, which is the subject of this lawsuit, was effective May 10, 1981 and expires on May 14, 1984.
According to Singer, when the negotiations commenced, the bargaining unit consisted of 721 employees. By May 9, 1981, the expiration date of the old agreement, that number had shrunk to 673, and by June 21, 1981, the date the new contract was agreed upon, it had shrunk still further to 598. The company claims that, as of the date of this decision, what was at its peak a workforce of over 10,000 has shriveled to about 400.
The June 21st Memorandum of Agreement included the following clause, Appendix Z, upon which plaintiffs' claims are primarily based:
During the negotiations which led to this agreement it was mutually recognized that every effort should be made by both the Company and the Union to improve the productivity of the plant.
Accordingly, the Company will invest two million dollars ($ 2,000,000) in restructuring the facility to make more efficient the production facilities for the manufacture of industrial sewing machines. The Company will within 30 days initiate the necessary procedures to implement the restructuring plan.