Foam & Plastics Division v. General Drivers & Helpers Local Union 401
Opinion of the Court
The appellee, Foam and Plastics Division, Tenneco Chemicals, Inc. (Tenneco), brought suit, basing jurisdiction upon Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, against the appellant, General Drivers and Helpers Local Union 401, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Local 401), seeking to enjoin both preliminarily and permanently Local 401, its officers and members, from engaging in an alleged illegal work stoppage at Tenneco’s Hazelton, Pennsylvania plant. Tenneco also requested that Local 401 be directed to utilize the grievance and arbitration procedure in the collective bargaining agreement between the parties for the resolution of any grievance dispute, and that compensatory damages be awarded Tenneco. The court below found there had been a breach of the collective bargaining agreement and an illegal strike and granted Tenneco damages. The court refused, however, to grant a temporary or permanent injunction against the Union because the work stoppage lasted for only one shift and had not recurred. Local 401 has appealed from the court’s decision, but Tenneco has not appealed from the failure to grant injunctive relief.
I.
Local 401 insists that Tenneco failed to meet its burden of proof that officers or agents of Local 401 rendered the Union liable for damages by instigating an illegal work stoppage in violation of the parties’ collective bargaining agreement. Local 401 fails to sustain this position. Of 78 drivers employed by Tenneco, 43 or 44 were scheduled to work on the evening of July 23, 1974. On the evening of July 23, some 49
The following facts should be noted in reference to the evening and morning hours of July 23-24: Panzarella stated he “called off” work at approximately 8:45 P.M. on the evening of July 23
During the day of July 24, a telegram was sent by Wein to the officials of Local 401 at its office in Wilkes-Barre. No information respecting the shift was received from Local 401 as a direct result of that telegram. Pudlowski, secretary-treasurer of Local 401, stated that the Local’s officials were in Reading attending a meeting from 10:30 A.M. to 5:30 P.M. on July 24. Panzarella also testified that on July 24 he attempted to contact Namey, vice-president and business agent for Local 401, who services the Tenneco plant. He stated that when he called the Union office between 8:00 and 8:30 A.M., July 24, he was advised that Namey was attending a meeting in Reading and that Namey’s office would attempt to contact Namey.
At the meeting Panzarella was informed that it was Tenneco’s position that the “sick out” of approximately 90% of Local 401’s drivers constituted a violation of the no strike clause. Under the terms of the bargaining agreement the Union was required immediately to order its members to return to work.
The testimony in this case establishes that on July 23, 1974, over 90% of appellant’s scheduled drivers called in sick. As the District Court stated in its memorandum decision: “To ask this Court to find that the absence of approximately 90% of its members on the evening of July 23 was a quirk of circumstances is absurd.”
II.
The appellant, Local 401, insists that the learned District Judge did not apply the proper measure of damages when he determined that appellant was liable in the amount of $5,045.00. See Appendix “A” to this opinion.
The assertion by the Union is that Tenneco did not meet its burden as to “fixed costs” by showing that it in fact lost the entire value of production which normally would have been generated as a result of these expenses. Rather, Local 401 contends that the additional costs — direct expenses — were incurred to generate production which, but for the work stoppage, would have issued from the regular personnel. As to the item of $408 for salaried traffic personnel, it is pointed out by the Union that these persons were paid regardless of whether they were sick or what hours they worked. Then comes an obscure statement in the Union’s brief, allegedly based upon the testimony of Kubert, the plant accountant, that “While the Plant Accountant testified that there was no work for . . . [these salaried traffic personnel], vehicles still had to be dispatched and there was no testimony that they did not perform a valid function for the Company on that date. They could easily have performed in a productive manner in a related area, even though there were physically no vehicles to dispatch from the plant.” Appellant’s Brief, p. 14. This observation adds nothing to the appellant’s case.
The Union asserts that Tenneco did not meet its burden of proof to show loss as to employee benefits “because items such as insurance and other fringe benefits cover the employee 365 days a year and, consequently, there [was] no loss of production to the Company as a result of the one-shift work stoppage.” The amount involved in this one item according to Exhibit P-4 is a comparatively small sum, apparently $90. The Union also objects to the calculation as to depreciation, asserting there is a conflict between Kubert’s method of computation and that employed by Internal Revenue Service in making its determinations. The IRS undoubtedly utilizes the “useful life of the assets, which [ordinarily] is by years.” This item is also of very small magnitude, i. e., $69.
The appellant correctly states in its brief: “There is not one iota of testimony in the record which indicates that the Company lost a scintilla of production as a result of the one-shift work stoppage. The same rationale applies to the amount submitted as to fixed lease costs for vehicles. There was no clear testimony that these vehicles would have been utilized on the day in question and, even if they were, based on the above rationale, there was absolutely no loss of production to the Company.” (pp. 14-15).
Tenneco insists that the trial court applied the proper method of calculating damages. Section 301 of the LRMA, 29 U.S.C. § 185(e), provides for the award of compensatory damages when a union violates a no strike clause, and it is clear that the courts require only a reasonable estimate of the damages rather than mathematical calculations. See Annotation, 92 A.L.R.2d 1232. The courts have included as elements of damages, as appears from the brief of Tenneco:
It is of course the law and well established, Roadway Express, Inc. v. Highway Truck Drivers & Helpers Local 107, 299 F.Supp. 1058 (E.D.Pa. 1969), that the trial court is the trier of the facts and that it is within its province to determine which items are reasonable and which are not. This matter is well-stated in Pennsylvania Legal Encyclopedia, Vol. 11, Damages, Section 12, which asserts as a general principle that damages should be calculated with reasonable certainty, but nonetheless, “Courts will not be astute to permit persons who admit they have committed a wrong to escape the consequences of their acts because of a lack of precise means of proving the commission of the wrong, especially where the nature of the case does not permit exact proof, and where there is a basis in the evidence for a reasonable computation of the damage suffered, considering the nature of the transaction, a verdict may be based thereon, even though there may be some uncertainty as to the amount of damage.”
“As otherwise stated, compensation cannot be refused because proof of the exact amount of the loss or injury is not produced, for there is judicial recognition of the difficulty or even the impossibility of the production of such proof, and all that the law requires in such cases is that the evidence shall, with a fair degree of probability, establish a basis for the assessment of damages.”
But there are other considerations here. At first examination the solution to the damages issue adopted by the distinguished District Judge seems to be the correct one, but this conclusion fades with further consideration. The record as to damages is extremely sparse. The fixed costs seem correct in amount, as are the direct expenses caused by the strike and allowed by the district court, but the reasoning of the district court fails when one considers the fact that some consideration of value must have devolved upon the company from the direct expenses incurred to make deliveries during the strike. There are various formulas the district court might have followed. One such permissible formula, which might require a large amplification of the record, would be to estimate the difference between the compensation or considerations received from the use of the extra employees and any other additional trucking facilities, if there be such,
Accordingly, the judgment of the district court insofar as it found Local 401 guilty of an illegal strike is affirmed, but the district court will be directed to amend its damage award in accordance with this opinion.
APPENDIX "A'
Tenneco Chemicals Foam and Plastics Division A Tenneco Company Valmont Industrial Park Hazleton, Pa. 18201 717-455-4931
August 2, 1974
Losses Incurred as a Result of Work Stoppage — Not Recoverable
Fixed Costs $1,888
Additional costs — Direct expenses 3,934
$5,822
Fixed Costs
Salaried Traffic Personnel $ 408
Employee Benefits 90
Tractor/Traller Lease Costs 1,321
Depreciation on Company-owned trailers 69
Total Fixed Costs $1,888
Additional Costs — Direct Expenses
Outside Carrier Costs Incurred $2,470
Substitute Drivers' Wages & Benefits 475
Travel Expense — Traffic Manager 91
Travel Expense — Personnel Director 100
Backhaul Revenue Loss 777 [
Overtime Supervisor — Baltimore plant 13
Travel Expense — Baltimore Drivers 8
Total Additional Costs $3,934
. The apparent disparity in number of drivers and those who took part in the strike is unimportant in the instant case.
. During his testimony, Wein had stated that, based on an examination of the dispatcher’s schedule, this call occurred around 9:20 P.M. The time difference is of no relevance, however.
. Article XII of the bargaining agreement between Tenneco and Local 401 provides: “Strikes, Stoppages and Lockouts — Since the Agreement provides for an orderly method for the adjustment of disputes, strikes, stoppages and lockouts are prohibited. If, however, a strike or stoppage should occur, the Union shall immediately order the workers to return to work. Only the question of fact as to whether an employee participated in or was responsible for such strike, boycott, slowdown, or work stoppage shall be subject to review through the grievance procedure of the contract. Workers who refuse to comply may be replaced or need not be hired by the Employer after the dispute is settled.”
. Panzareila’s testimony on cross-examination was as follows, and we deem it illuminating as to his state of mind:
“Q. You spoke with a couple of yard men and based upon a conversation with a number of yard men, you were able to tell Mr. Namey that 40-some odd drivers would return to work that night?
A. I said everything was going good and they would return to work.
Q. Well, what led you to that conclusion?
A. By talking to them.
Q. You only talked to two yard men?
A. No. I talked to four yard men.
Q. Okay. You talked with four yard men and based upon talking with four yard men, you were led to the conclusion that 40-some odd of the drivers could return to work that night, the drivers that reported off sick the night before?
A. I figured the word would get around. We don’t call every man.
Q. My question is: What led you to report to Mr. Namey that all of the men would report for work. Did you know they were better from their illness?
A. I took it on my own. I figured they would.
Q. In other words, you came to the conclusion that they weren’t completely ill?
A. I don’t know that.
Q. But you knew even if they were, they would be at work that night?
A. I figured so.”
Notes of Testimony (August 26, 1974). Appendix, pp. 114a-115a.
. The “Memorandum and Order” of the court, page 122a of the Appendix, contains the word “fork”. This typo is translated by us as “for work”. The quote is from the original opinion of the District Judge, at 2. Appendix, p. 122a.
. The district court allowed all items of damages listed in Appendix “A” save that of back-haul revenue loss ($777.00). This ruling is not contested here, and we believe the district court properly disallowed this sum. The learned District Judge defined backhaul revenue as that “generated when plaintiffs trucks returning to plaintiff’s plant pick up materials for other factories owned by the parent company of plaintiff.” There was insufficient evidence to support the claim for backhaul revenue loss because Tenneco did not establish that these pick-ups were irretrievably lost.
. On page 13, first full paragraph, of the appellant’s brief, counsel cites “Shirley-Herman Co. v. International Hod Carriers, 182 F.2d 806 (1950, C.A. 2 N.Y.),” stating: “[T]he Court permitted recovery of certain fixed expenses, including ‘property insurance, property taxes, compensation and group insurance, social security taxes, and employee pension liability’.” The foregoing clearly indicates that the quotation is from Shirley-Herman Co., but this is not so. The quotation is lifted, apparently, from 92 A.L.R.2d 1232 at 1237, without verification by counsel that it is actually from United Electrical Equipment Radio & Machine
Counsel must obey our rules and file accurate briefs. .Such errors, although miniscule, require the time and effort of the Court to track down and place in perspective. The offending quotation will be ordered stricken from the appellant’s brief.
. Appellee’s Brief, p. 16.
. The correct cite is 172 F.Supp. 354.
. As mentioned, the asserted claims by Tenneco are shown insofar as they were detailed by the company in Appendix “A” to this opinion.
. Id. at 102-103.
. In respect to which the record is far from clear.
. We are not faced here with the complicated damage circumstances that were before this court in Eazor, supra. For example, Judge Maris stated in his thorough and well thought-out opinion:
“We think that the measure of damages recoverable in this case is the actual loss sustained by each plaintiff as a direct result of*951 the breach and which may reasonably be supposed to have been in the contemplation of the parties as the probable result of such breach at the time the agreement was made.” Id. at 966.
Nothing of this sort is before the court in the instant case. It should be noted that the contract in Eazor specifically disclaimed liability for unauthorized strikes, that the learned district judge found the strike unauthorized, and that this court accepted that finding.
[*] [This item was disallowed by the trial court.]
Reference
- Full Case Name
- FOAM AND PLASTICS DIVISION, TENNECO CHEMICALS, INC. v. GENERAL DRIVERS AND HELPERS LOCAL UNION 401, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA
- Cited By
- 2 cases
- Status
- Published