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CROWN ZELLERBACH CORP. v. WIRTZ

January 2, 1968

Crown Zellerbach Corporation, Plaintiff,
v.
W. Willard Wirtz, Secretary of Labor, United States Department of Labor et al., Defendants. United Papermakers And Paperworkers, AFL-CIO, Plaintiff, v. Crown Zellerbach Corporation et al., Defendants


Sirica, D.J.


The opinion of the court was delivered by: SIRICA

These actions, having been consolidated for hearing, came on to be heard on plaintiffs' Motions for Preliminary Injunction, and upon the affidavits, exhibits and legal memoranda in support thereof and in opposition thereto, and was, on December 22, 1967, argued by counsel. The Court, having considered the aforesaid motions, affidavits, exhibits, memoranda and argument, hereby makes the following findings and conclusions:

 Findings of Fact

 2. Plaintiff United Papermakers and Paperworkers, AFL-CIO, is an unincorporated labor organization with its headquarters and principal place of business at Albany, New York. Papermakers and its affiliated local unions 189 and 189A act as the exclusive collective bargaining representatives for hourly paid production and maintenance employees at the Mill. (Papermakers' Complaint, [*] [*] 1, 6.)

 3. Defendant W. Willard Wirtz is an individual residing at 5009-39th Street, N.W., Washington, D.C. He is found within and is a citizen of the District of Columbia, and he is the Secretary of Labor. Pursuant to Section 201 of Executive Order 11246 ("the Executive Order") the Secretary of Labor is responsible for the administration of the equal employment opportunity clauses in Government contracts and subcontracts. (Crown's Complaint, [*] 2.)

 4. Defendant Edward C. Sylvester is an individual residing at 769 Delaware Avenue, S.W., Washington, D.C. He is found within and is a citizen of the District of Columbia, and he is Director, Office of Federal Contract Compliance ("the OFCC"). The Secretary of Labor has delegated his authority and responsibility under the Executive Order to Sylvester. (Crown's Complaint, [*] 3.)

 5. By Agreements dated March 19 and June 16, 1967 ("the OFCC Agreements"), Crown and OFCC agreed upon action to be taken by Crown to place itself in compliance with the Executive Order. With the exception of changes related to the seniority system in the Mill, it is not disputed that Crown has taken all the actions required of it by the Agreements. (Crown's Complaint, [*] [*] 6-7; Affidavit of Francis M. Barnes dated December 19, 1967, and Attachment A thereto.) The Papermakers are not a party to the OFCC Agreements and at no time during their negotiation were the Papermakers permitted by defendants to participate. (Papermakers' Complaint, [*] 11.)

 6. The sole issue remaining between Crown and OFCC is whether Crown is obligated under the Executive Order and the OFCC Agreements to change or is obligated only to seek to bargain to change the seniority system presently in effect in the Mill. (Crown's Complaint, [*] [*] 6-8; Affidavit of Francis M. Barnes dated December 19, 1967; Affidavit of Ward McCreedy, submitted by defendants, [*] [*] 14-36.) Also put in issue by the Papermakers is the question whether defendants have authority under the Executive Order to direct the incorporation in a collective bargaining agreement of a specific seniority system mandated by them. (Papermakers' Complaint, [*] 15; Transcript of Hearing on Plaintiffs' Motions for Preliminary Injunction, p. .)

 7. OFCC has demanded that Crown adopt in place of the current job seniority system a combination seniority system as defined in Paragraph B.2. of the June 16 OFCC Agreement, or a system which produces equivalent results, and that Crown change certain seniority practices regarding "recall." (Crown's Complaint, [*] 5; Affidavit of Francis M. Barnes dated December 19, 1967, and Attachment A thereto.)

 8. Beginning about July 10, 1967, Crown began negotiations with the Papermakers for a new collective bargaining agreement. Throughout those negotiations Crown made continuous efforts to secure the agreement of the Papermakers and their local affiliates at Bogalusa to the combination seniority system described in Paragraph B.2. of the June 16 OFCC Agreement. (Affidavit of William S. (Jack) Gentry, [* $ 8, 11-12; Affidavit of T. I. Meehan, [*] [*] 17, 19.)

 9. Crown has sought to bargain in good faith to persuade the Papermakers and its local affiliates to agree to change the seniority system provided in the collective bargaining agreement. The Papermakers have insisted in the negotiations that, on the advice of its counsel, the changes proposed by OFCC may not be lawfully imposed by Crown upon the Papermakers. (Crown's Complaint, [*] 8; Affidavit of T. I. Meehan, [*] [*] 17-18; Affidavit of Paul S. Phillips, [*] 5.) On September 8, 1967, the Papermakers formally notified Crown that unless a collective bargaining agreement was signed by September 19, presumably without effecting the seniority system changes demanded by OFCC, the union would strike at Bogalusa. (Affidavit of T. I. Meehan, [*] 18; Affidavit of William S. (Jack) Gentry, $ [*] 9-10.) Thereafter, Crown requested the services of a federal mediator. With his assistance, the parties reached agreement on all issues except seniority. With respect to seniority, it was agreed that they would continue to negotiate for a reasonable time with the understanding that after such additional negotiation, Crown, upon 15 days notice, could unilaterally install changes in the seniority system. Within ten days after receipt of notice that Crown intended such changes, the union could strike. (Affidavit of T. I. Meehan, [*] 12; Affidavit of William S. (Jack) Gentry, [*] 10.) Such negotiations were resumed about November 8, 1967, and produced a tentative agreement of December 2, 1967, for a procedure which Crown and the union considered as capable, after further negotiation and the best efforts of the Department of Labor, of meeting the demands of OFCC. (Affidavit of T. I. Meehan, [*] [*] 20-23; Affidavit of William S. (Jack) Gentry, [*] [* 11-13.) The December 2 agreement was signed by representatives of Local 189, Local 189A and the Papermakers' International. By letter dated December 7, 1967, the President of Local 189A advised Crown and the Papermakers' International that Local 189A neither accepted nor rejected the principles contained in the December 2 agreement "until further negotiations were had". (Affidavit of T. I. Meehan of December 21, 1967, and Exhibit B thereto.)

 10. On the same date that this action was filed, the Papermakers filed suit against defendants and against Crown alleging, among other things, that unilateral implementation of a new seniority system would violate Crown's obligations under the existing collective bargaining agreement and under the National Labor Relations Act. (Papermakers' Complaint, [*] 15.) If Crown makes such changes unilaterally, it is most likely that a strike will occur. (Affidavit of T. I. Meehan, [*] 18; Affidavit of Paul L. Phillips, [*] 6; Affidavit of William S. (Jack) Gentry, [*] [*] 9, 10, 14; Papermakers' Complaint, [*] 15.)

 11. The December 2 proposal was submitted to Sylvester on December 6, 1967. At that time he indicated that the December 2 agreement would probably not be satisfactory and he expressed again his intention as first stated on October 26, 1967, and thereafter reiterated in letters of November 2 and 24, 1967, to invoke sanctions against Crown if it did not abolish its present seniority system by December 8, 1967, and make the changes demanded by OFCC. Specifically, Sylvester refused to give assurance either to Crown or to the Court that he would not, without affording Crown a prior hearing as required by Section 208(b) of the Executive Order, circulate a "consult memorandum" to the heads of all agencies requiring that contracting officers consult with OFCC before awarding contracts to Crown. At the hearing on Plaintiff's Motions for Preliminary Injunction, counsel for defendants in response to an inquiry from the Court stated that if defendants finally rejected the December 2 proposal, defendants would be likely to issue a notice of opportunity of hearing in connection with a proposed debarment of Crown and temporarily to suspend Crown from Government ...


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