BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
TEAMSTERS GENERAL LOCAL UNION NO.
TEWS COMPANY, INC.
Teamsters General Local Union No. 200, hereafter Union, and Tews Company, Inc.,
Employer or Company, are parties to a collective bargaining agreement which provides for
and binding arbitration of grievances arising thereunder. The Union requested, and the
concurred, in the appointment of a Wisconsin Employment Relations Commission Staff
to hear and decide the instant dispute. The undersigned was so appointed. The hearing was
conducted in Milwaukee, Wisconsin, on February 5, 1998. The hearing was transcribed and
record was closed on April 13, 1998, upon receipt of post-hearing written argument.
The Union frames the issue as follows:
Did Tews violate the contract by subcontracting
Local 200's bargaining unit work
to third party non-Union vendors?
If so, the Union requests that the Arbitrator retain jurisdiction in the event the
parties are unable to agree on the appropriate remedy.
The Employer frames the issue as follows:
Did the Company violate the parties' collective bargaining agreement when
it purchased Portland Cement from Lone Star Cement for its Western Yards operations in
The Arbitrator frames the issue as follows:
1. Did the Company violate the subcontracting provision of the parties'
collective bargaining agreement when it purchased Portland Cement from Lone Star Cement
delivered FOB the Western Yards?
2. Did the Company violate the subcontracting provision of the parties'
collective bargaining agreement when it hired Halverson Trucking to haul bulk cement from
the LaFarge silo at Jones Island to the Western Yards?
If so, what is the appropriate remedy?
SCOPE OF OPERATIONS COVERED
2.1 This Agreement shall cover all work performed by employees of the Employer
employed in the classifications of work covered by this agreement. This shall not be
construed to negate or invalidate any collective bargaining (sic) between the Employer and
a bona fide union covering work outside the geographical jurisdiction of the Union, on the
effective date of such agreement. The jurisdiction of the Union is Milwaukee, Ozaukee,
Washington and Waukesha Counties.
. . .
31.1 Should differences arise between the Employer and the Union, or between the
Employer and any of its employees, either individually or collectively, as to the meaning and
application of the provisions of this Agreement, an earnest effort shall be made to settle such
differences at the earliest possible time by the use of the following procedures:
. . .
32.1 It is agreed that the following six (6) cardinal points form a part of this
. . .
c. That there shall be no restriction on the use of any raw or manufactured
. . .
33.1 The parties recognize that the Employer may hire additional trucking when his
own equipment and his own employees are fully employed.
. . .
Tews Company, Inc., is in the business of manufacturing and supplying ready-mix
and building materials and operates approximately one dozen plants throughout southern
Local 200 represents various classifications of employes, including Bulk Cement Drivers who
stationed at Tews' garage facility in downtown Milwaukee. The Bulk Cement Drivers haul
various Tews plants and customer locations.
In the Spring of 1997, Tews entered into an agreement with Lone Star Cement
under which Lone Star would supply Portland cement to Tews. The purchase price included
terms FOB the Tews' Western Yards ready-mix plants. Lone Star delivered this Portland
to the Tews' Western Yards via Schwerman Trucking. Tews' Western Yards lie outside
Milwaukee, Ozaukee, Washington and Waukesha counties.
In April of 1997, individual Bulk Cement Drivers Erwin Smith, Jerry Kubricky, and
Slotke grieved the use of Halverson Trucking to haul cement from the LaFarge silo on Jones
Milwaukee, to the Tews' Western Yards during time periods in which certain Bulk Cement
represented by Local 200 were told that no work was available.
In May of 1997, Local 200 Business Representative Rick Schermerhorn incorporated
grievances into a class action grievance. The class action grievance alleged that
delivery of bulk cement during a time in which Local 200 Bulk Cement Drivers were on
constituted a continuing violation of the collective bargaining agreement.
As a remedy to this group grievance, the Union demanded that the Employer stop
the contract and make the Bulk Cement Drivers whole for all losses due to the violation.
grievance was denied and, thereafter, submitted to arbitration.
POSITIONS OF THE PARTIES
Tews' agreement with Local 200 clearly and unambiguously restricts the Company
subcontracting Local 200's bargaining unit work unless its "own equipment and its own
are fully employed." The contract's clarity is illustrated by the 1991 Joint Committee
awarding a Local 200 driver lost pay and pension benefits for work performed by an outside
when the Union driver was laid off.
Tews presented no evidence to contradict the Union's witness evidence that, for over
years, Local 200 drivers have always hauled to the Western Yards. The 1994 grievance
mandates that, with one limited exception, Local 200 drivers would haul all bulk cement
the Hartland Yard. As both parties testified, during the most recent contract negotiations,
of understanding was not discussed and Tews never objected to the practice of using only
drivers to haul directly to Tews' facilities.
Local 200 has never allowed Tews to subcontract work while Local 200 drivers were
employed. Tews flagrantly and repeatedly violated the agreement by hiring outside
drivers to perform bargaining unit work at a time in which Tews was telling its own
drivers that no
work was available. Almost one-third of Tews' Local 200 drivers have been forced to quit
the drivers, in essence unemployed, could no longer feed their families.
Arbitrators have no power to modify the terms of a collective bargaining agreement
releasing an employer from a promise on the basis that the promise is financially
agreement's "no subcontracting" language does not allow using business judgment or
hardship as a defense to a grievance protesting subcontracting.
The arbitrator should sustain the grievance. The arbitrator should order Tews
cease and desist from subcontracting Local 200 bargaining unit work and direct that Tews
whole all employes who were improperly denied bargaining unit work.
Due to severe shortages of Portland cement, business necessity required Tews to buy
cement from Lone Star. Lone Star would not agree to supply Portland cement under any
other than delivery FOB at Tews' Western Yards.
The clear and unambiguous language of the parties' collective bargaining agreement
limit management's right to obtain materials for use in its ready-mix concrete products.
provides the Company with the ability and unrestricted right to obtain any raw or
material it needs in the operations of its business and production of its products.
The Company can obtain materials from any source and under any conditions
maintain its operations. The Company is not restricted by the parties' agreement to obtain
only from sources where it is picked up or transported by employes of the Company.
As set forth in Article 2, the jurisdiction of Local 200 is Milwaukee, Ozaukee,
and Waukesha Counties. The Western Yards are outside of this geographical area and
Teamsters Local represents employees of the Western Yards. The Union is seeking to use
arbitration hearing to expand its area of authority and representation to areas that are clearly
the scope of the agreement.
The Anton and McClees grievances, which gave rise to the June 5, 1995, Letter of
Understanding (LOU), involved a third party hauler hired by Tews. Inasmuch as this LOU
to an unrelated matter that occurred in 1994; was only effective through May 31, 1996; was
renewed during contract negotiations for the current labor agreement; and was not included
signed 1996-1999 labor master agreement, it is not controlling.
When the parties bargained their most recent collective bargaining agreement, the
proposed language that would have eliminated the Company's ability to purchase any
any conditions from any source. This proposal was rejected and the subcontracting language
The Company's decision to purchase Portland cement from Lone Star was based on
legitimate and real concerns for the viability of its business; was made in good faith; was
and did not result in any subversion of the labor agreement or weakening of the bargaining
subcontracting provisions of the labor agreement do not restrict this decision.
The Union is attempting to obtain through arbitration that which it could not obtain in
negotiations. The grievance must be denied and dismissed.
The Union relies upon Article 33, Subcontracting, to argue that the Company has
parties' collective bargaining agreement. During the last bargain, the Union proposed to
Article 33 as follows:
33.1 There shall be no subcontracting or outsourcing of bargaining unit work.
The Company rejected this modification and the Union withdrew this proposal. The
remained unchanged, states as follows:
33.1 The parties recognize that the Employer may hire additional trucking when his
own equipment and his own employees are fully employed.
The language of Article 33.1, on its face, addresses the "hiring" of additional
the instant case, the Company did not "hire" additional trucking. Rather, it purchased
Lone Star Cement under a purchase agreement in which the purchase price included delivery
the Company's Western Yards. Thus, the conduct of the Company is not in violation of the
language of Article 33.1.
In the past, Local 200 drivers have been used to haul bulk cement from various
Tews plants. While it is evident that Tews has hired outside drivers to haul bulk cement
suppliers to its plants, it is also evident that the vast majority of such use occurred when
drivers were fully employed.
The record demonstrates that, on two occasions, the Union grieved the use of an
trucker to haul cement at times in which one or more Local 200 drivers were not given
work. On the first occasion, in 1991, the grievance was sustained by committee
decision and the
grievant received 5.5 hours of pay and one day's pension. On the second occasion, in
grievance was settled with the following:
BULK CEMENT LETTER OF UNDERSTANDING
TEAMSTERS "GENERAL" LOCAL UNION NO. 200
This Letter of Understanding shall be made a part of the Labor Agreement in effect
from June 1, 1992 through May 31, 1996, between Tews Company and Teamsters
Local Union No. 200.
It is hereby mutually agreed to by the undersigned that all bulk cement delivered to
all Tews Company plants, regardless of their location, will be hauled by employees of Tews
Company who are members of Teamsters "General" Local Union No. 200, affiliated with
International Brotherhood of Teamsters, with the following exceptions: Loads from Illinois
Cement hauled directly from Illinois Cement plant located in the state of Illinois, to the Tews
Company, Hartland Yard. Be if (sic) further understood that insofar as the delivery of
is concerned this Letter of Understanding supersedes the geographical jurisdictions described
in Article 2, SCOPE OF OPERATIONS COVERED, of the Agreement.
In the event that all of Tews Company bulk cement hauling equipment is being
utilized, Tews may hire outside contractors as necessary.
The June 5, 1995 "Bulk Cement Letter of Understanding," by its terms, was made
the labor agreement that was in effect from June 1, 1992 through May 31, 1996. The parties
negotiated and reached a contract settlement on the successor June 1, 1996 through May 31,
agreement without either party referring to the "Bulk Cement Letter of
Understanding." An LOU involving the rate of pay for Local 200 members
performing plant engineer
duties, which had been attached to the prior collective bargaining agreement, was discussed
agreed to by the parties during the negotiation of the June 1, 1996 through May 31, 1999
After the parties had reached a settlement on the successor agreement, Union
Rick Schermerhorn asked the Company to sign another copy of the "Bulk Cement Letter of
Understanding" and the Company refused, advising Schermerhorn that this LOU had not
renegotiated. Schermerhorn then advised the Company that he believed that all provisions of
labor agreement are carried forward into the next labor agreement unless the provision was
The "Bulk Cement Letter of Understanding," by its terms, expired with the June 1,
through May 31, 1996 labor contract. There was no mutual agreement to incorporate this
the successor labor contract, or to otherwise extend its terms beyond May 31, 1996. Since
was not in effect at the time that the Company purchased Portland Cement from Lone Star,
are not binding upon the Company.
The evidence of the parties' past practice does not indicate that the Company
purchased cement to be delivered FOB the Company's Western Yards, or that the parties
mutually agreed that such a delivery violated any provision of the collective bargaining
Neither the evidence of the parties' past practices, nor the evidence of bargaining history,
demonstrates that the parties intended Article 33.1 to be given any meaning other than that
in the plain language of the agreement.
The subcontracting language contained in the parties' collective bargaining
not preserve all bargaining unit work. Rather, it preserves work opportunities for current
The record demonstrates that Lone Star would not sell to the Company under any
other than delivery FOB the Company's Western Yards. The record further demonstrates
to the shortage of Portland Cement, the Company did not have an alternative source for this
The "hauling" of the cement purchased from Lone Star is not work which was available to
It is not evident that Tews' purchase agreement with Lone Star was a contrivance to
Local 200 drivers of work opportunities and it did not deprive any Local 200 driver of a
opportunity. Tews did not subcontract work in violation of the collective bargaining
it purchased Portland Cement from Lone Star with a delivery FOB the Western Yards.
The evidence of past practice persuades the undersigned that the parties have
recognized that hauling bulk cement from the LaFarge silo on Jones Island to the Western
bargaining unit work. In April of 1997, the Company hired Halverson Trucking to haul bulk
from the LaFarge silo on Jones Island to the Western Yards. According to Union Exhibit
May 14, 1997, the Company advised the Union that it had stopped using Halverson to
Under the provisions of Sec. 33.1, the Company is not contractually entitled to hire
to perform this work unless its own equipment and its own employes are fully employed. At
Halverson performed this work when Local 200 drivers and Company equipment were not
employed. Accordingly, the Company has violated the subcontracting provision of the
collective bargaining agreement.
Based upon the above and foregoing, and the record as a whole, the undersigned
1. The Company did not violate the subcontracting provision of the parties'
bargaining agreement when it purchased Portland Cement from Lone Star Cement delivered
2. The Company violated the subcontracting provision of the parties' collective
agreement by hiring Halverson Trucking to haul bulk cement from the LaFarge silo at Jones
to the Western Yards in the Spring of 1997, during times in which Local 200 drivers and
equipment were not fully employed.
3. In remedy of this contract violation, the Company is to immediately make whole
employes in the Bulk Cement Drivers classification represented by Local 200 who were
work and had Company equipment available to perform work, but were not offered work,
times in which Halverson Trucking was hired by the Company to haul bulk cement from the
silo at Jones Island to the Western Yards.
4. The undersigned will retain jurisdiction for a period of forty-five days for the sole
of resolving any disputes with respect to the remedy.
Dated at Madison, Wisconsin, this 4th day of September, 1998.
Coleen A. Burns, Arbitrator