Case 1:15-cv-00119-CSO Document 1-2 Filed 11/20/15 Page 1 of 13

FREDERICK P. KESSLER
ARBITRATOR
INTERNATIONA BROTHERHOOD OF
TEAMSTERS LOCAL UNION 190
DECISION
FMCS 140820-58415-7

and

WESTERN SUGAR COOPERATIVE

A.

INTRODUCTION

On October 28, 2014, this Arbitrator was advised that he had

been chosen to hear the grievance dispute between Teamsters Local
190 (hereinafter referred to as "the Union") and the Western Sugar
Cooperative (hereinafter referred to as the "Company") regarding an
alleged contract violation by the Company when it laid off three
employees. A hearing was scheduled for May 21, 2015, at 9:00 a.m.
in Billings, Montana.
The hearing began at 8:50 a.m. Witnesses testified and exhibits
were submitted in evidence. The hearing adjourned at 3:25 p.m. The
parties agreed to submit briefs. The final brief was received by the
Arbitrator on July 16, 2015.
B.

APPEARENCES

The Employer appeared by Attorney Hope K. Abramov, of

Thompson Coburn LLP. She called as witnesses Factory Manager Jeff
Anderson. Also present was Dave Devore.
The Union appeared by Attorney Vicki Nelson McDonald, of
the McDonald Law Firm. She was assisted by Business
Representative Wayne Erhart who also testified. She also called as
witnesses Greta Niles, Dennis Cass, Sandy Nava and Bob Hermann

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CONTRACT PROVISIONS AND RULES OF CONDUCT

The Collective Bargaining Agreement between the Union and

the Employer for the period of June 1, 2013 to May 31, 2016 provides
as follows:
ARTICLE 2

DEFINITIONS
A) By "campaign Season" is meant the period during which
beets are sliced or sugar is produced at the beet mills, and
includes test-out and laying-by period, which is not to exceed
five (5) days at the start prior to slicing beets and no less than
three (3) after the last beet is sliced.
B) A campaign season may be declared at the packaging
stations during the normal Intercampaign season if such
operation goes on a Universal Work Week. The Company
agrees that if a Universal Work Week is to be implemented, the
Union will be given three days notice.
C) For the beet mills "Intercampaign Season" is defined as
the period of the year not defined above as the campaign
season.
D) a "year-round employee is one who shall have worked
1680 hours (including overtime hours) or more during the 26
two-week payroll periods prior to September 1 of each year. An
employee who attains year-round status as provided above,
shall retain such status and be eligible for benefits as provided
by this Agreement for the 12 month period commencing
October 1.

ARTICLE 16
RIGHTS OF MANAGEMENT
A) All the functions, rights, powers and authority which the
Company has not specifically abridged, delegated or modified
by this Agreement are recognized by the Union as being
retained by the Company.
B) It is agreed that the above recited management rights are
not subject to the grievance and/or arbitration procedures set
forth in Articles 17 and 18 hereof unless in the exercise of said
rights the Company has violated a specific term or provision of
one or more other Article of the Agreement.
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ARTICLE 22
INTERCAMPAIGN CREW SELECTION
A) The Term seniority, as applied in his Article, shall be
interpreted to mean seniority based upon the Factory Seniority
List.
B) An employee attains a seniority date and is added to the
Factory Seniority list when the employee attains year-around
status as defined in Article 2 Definitions. An employee's
seniority date for this purpose shall be their most recent date of
hire prior to obtaining year-round status.
C) A year-round employee with five (5) or more years of
seniority retains his/her seniority date and remains on the
Factory Seniority list if recalled within fifteen months.
D) A year-round employee with less than five (5) years of
seniority retains his/her seniority date and remains on the
Factory Seniority List if recalled by August 15.
E) The Employer shall post the respective Factory Seniority
Lists on the bulletin board at each factory within thirty (30)
days after the end of the campaign.
F) Year-round employees with five (5) or years of seniority
shall be laid-off and/or recalled by seniority, and in accordance
with section (h) below.
U) Year-round employees with less than five (5) or years of
seniority shall be laid-off and/or recalled based on experience,
skill, ability, knowledge and training as applied to the
Intercampaign work requirements and the protection of critical
skills. Should the factors of experience, skill, ability,
knowledge and training be relatively equal, length of
continuous service shall prevail.
H) Selection of the employees to be carried on the Intercampaign Holdover Crew shall be according to the provisions
of paragraphs (f) and (g) of this Article provided those
provisions provide the Employer with the necessary skills and
abilities to perform the work to be conducted during the Intercampaign period and the protection of critical skills. Work to be
conducted during the Intercampaign period shall be determined
by the Employer. For the purposes of providing the Employer
with the necessary skills and abilities to perform the work to be
conducted during the Intercampaign and/or Campaign seasons,
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the Employer reserves the right to retain up to three (3) technician employees out of seniority order.
I) Seven days prior to the end of the Campaign period, the
Employer shall prepare a list of those employees who will be
held over and discuss it with the Union Committee before
posting it on the Company bulletin board.
J) The Company agrees to give seven (7) calendar days
notice of layoff to year-round employees, if practicable.
K) If an arbitration is held concerning the Employer's
determinations, such arbitrator shall compare relative experience,
skill, ability, knowledge and training of the involved employees
to determine if the decision was arbitrarily made.

ARTICLE 23
HIRING FORMER CAMPAIGN EMPLOYEES
A) A former campaign employee will be eligible to be
rehired either during campaign or Intercampaign at the last
factory where he or she worked provided:
*

Should there be more former campaign employees than

available jobs at the factory, such available jobs will be
assigned on the basis of experience, skill, ability, knowledge,
and training as applied to the campaign work. Should the
factors of experience, skill, ability, knowledge and training be
relatively equal, number of consecutive campaign seasons
worked shall prevail.
*

B) The Union agrees that no employment relationship

exists between a former campaign employee and the Company
from the date of termination of his/her employment until such
time as the employee may be re-hired and again performs work
for the Company;
*

C) A former campaign employee will be rehired during

Intercampaign prior to new employees being hired provided:
1) The former employee possesses the necessary
skills, knowledge, ability, training, and experience to
perform the available work, and

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2) The former employee applies for consideration

for such Intercampaign work in writing to the Factory
Manager. The employee is responsible for providing the
Company with his/her phone number and to update the
Company as to any changes thereto, and
3) The former employee must have satisfactorily
completed the last campaign, and
4) The former employee reports ready for work at
the designated time, date, and place.
D.

STATEMENT OF FACTS

The Employer, Western Sugar Cooperative, produces refined sugar

from beets that it plants, harvests and processes at it facility in Billings,
Montana. The beets are planted in early spring. The Employer doubles its
workforce in September when beets are harvested. Then it begins a period of
time which it refers to as the "Campaign" which lasts for four to five
months, operating around the clock for seven days a week.
The remainder of the year is referred to by the Employer as the
"Intercampaign" in which the workforce ships the finished sugar beets to
clients and maintains the equipment at the plant. An employee who works
1680 hours becomes a "year-rounder" entitled to sick leave, vacation and
retirement benefits.
Greta Niles worked for the Company for ten campaigns. For the past
four years she worked as a Lead Lab Technician. She was laid off at the end
of the Campaign on February 19, 2014. She was recalled to work on March
17th
as a warehouse sanitation worker and laid off on July 16, 2014, working
during that Campaign only 1571.5 hours.
Dennis Cass had worked for the Company since December, 2007. He
was hired as a Sugar End Helper on September 3, 2013 and laid off on
February 20, 2014. He was recalled on March 13th as a tote helper. He was
laid off on July 15, 2015 after working 1662 hours during the campaign, just
short of what he needed to be qualified as a "year-rounder".

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The Company hired Eddie Webster and John Fisher as warehouse

extras on July 23, 2014 and hired Lany Lynde as a bin digger on August 4,
2014. None of them had more campaign years or skill sets than Niles or
Cass. Niles and Cass both had the skills necessary to perform either job.
On July 21, the Union filed grievances alleging the layoff was
inappropriate. The Company acknowledged that both Niles and Cass were
laid off in order to keep them from obtaining the 1680 hours need to be
reclassified as year-round employees. The grievance was not resolved and
was submitted to arbitration,
E.

QUESTION IN DISPUTE

Did the Company violate the Collective Bargaining Agreement

by laying off the grievants? If so, what is the appropriate remedy?
F.

POSITION OF THE EMPLOYER

The Company has the unbridled discretion to lay its seasonal

employees. There is no contractual provision that limits the authority
of the Company. The language of the Collective Bargaining
Agreement is unambiguous. Outside evidence cannot be used to
interpret the provisions of the Agreement.
The Article 16 of the Collective Bargaining Agreement gives
management the right to adjust and control the employee headcount.
No other limitation exists that modif' management's control as to the
number of seasonal workers that it can employ.
The Agreement provides that employees with five or more
years of seniority will be laid off and recalled based on seniority.
Those employees with less than five years will be laid off and recalled
based on "experience, skill, ability, knowledge and training" based on
the needs of the Company and the protections of certain critical skills.
There is no provision in the Agreement that limits the ability of the
Company to lay off seasonal employees. The Union's witness
acknowledged that there is nothing in the Labor Agreement that
prevents it from using hours worked in making their selections.

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Article 23 restricts the Company's right to lay off year-round

employees with five years experience or more only on the basis of
seniority. Year-round employees with less the five years seniority may
be laid off based on experience, skill, ability, knowledge and training.
There are no limits in the Labor Agreement on the Company's ability
to lay off seasonal employees.
The Company argues that even if it failed to exercise its right to
use its discretion in laying off seasonal employees, its inaction did not
constitute a waiver of its authority under the Labor Agreement. The
failure to exercise a right, even after a long period, does not result in a
waiver of the right.
Even if past practice evidence were admitted, there is no
consistent practice, so at best the evidence is equivocal. Past practice
is admitted only if the language in the Agreement is equivocal. If it
was not specifically abridged elsewhere in the Agreement, it is
protected by the language of Article 16. There has been no agreed
upon practice between the Company and the Union outside of the
Agreement.
A claim of a single conversation with a former Manager of the
Company is not sufficient to show that a past practice had been
established. It is not adequate to show a clear and contiguous
application of the Agreement.
The Union submitted two information requests. They were
untimely and dilatory. They constituted discovery requests in an
arbitration process which does not provide a right for general
discovery. The Union requested information as to who replaced the
grievants. The Union contends the grievants were not replaced. The
Company did advise the Union that Lynde, Fisher and Webster were
hired after the grievants were laid off. The Union also eventually
found out the names of two employees who previously did not
become year-round employees, Fink and Bums, because they did not
work the needed 1680 hours.

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G.

POSITION OF THE UNION

The Collective Bargaining Agreement prohibits the Company

form laying off the grievants for the purpose of preventing their
eligibility for year-round employment. The language specifies that an
employee "will be rehired" if they meet the criteria outlined in the
provision.

The Company's decision to rehire one day and then to layoff

the employee a short time later is an act of bad faith. Every contract
imposes on the parties a duty of good faith and fair dealing in the
enforcement of a contract. A party may not accept the benefit of a
contract (the workers labor) then attempt to use the same contract to
destroy or injure the other party who provided the benefit.
The language of the contract is clear and unambiguous. Former
employees who have been hired will only be laid off when the work
for which they have the necessary skills and ability ceases to exist, as
has been the practice for decades. Such a past practice may not be
unilaterally changed because it is not explicitly stated and included in
the express terms of the Agreement.
The Company only changed the practice of not laying off
employees whose skills were still needed when Jeff Anderson joined
the Company. That is the first time the Company started to lay off
employees when they were close to the 1680 hours of employ-ment.
Prior to that, employees were laid off only when there was lack of
work. To allow the Company to lay off employees whose skills are
still needed solely to keep the employee from being able to become a
year-round employee make meaningless all of the year-round benefits
agreed in the Labor Agreement.
The work performed by both Niles and Cass has continued to
be done by the new hires, who will cost the Company less money than
if they had not been replaced. The Company failed to provide a
witness, Ray Bode, who was the manager of the plant at that time,
who would have been able to answer the question prior practice. The
Union could have brought an unfair labor practice charge, but the
process would have resulted in a substantial delay to the detriment of
Niles and Cass.

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The Company offered information regarding other employees

who were involved in a plant in Lovell, in which union membership is
not mandatory. The Lovell plant is not similar to Bozeman in work
force cohesion or in bargaining history.
The Management Rights clause of the Labor Agreement does
not give management the authority to layoff employees for the express
purpose of depriving them of year-round status. The express language
of Article 23 specifically protects the rights of laid off employees.
Any right that management claims under Article 16 was long abridged
by the past practices of the Company.

The Company's interpretation of the Labor Agreement, making

the 1680 work hour requirement meaningless was a violation of the
duty of good faith and fair dealing that is part of the collective
bargaining process and must be denied.
H.

DECISION

This arbitration is the result of a grievance filed because two

employees, Niles and Cass, were laid off in order to keep them from
obtaining the 1680 hours need to be reclassified as year-round
employees. Two other former employees, who had worked in fewer
previous campaign, were hired shortly after Niles and Cass were laid
off, although Niles and Cass were sufficiently skilled and experienced
to do the jobs for which others had been hired.

The Labor Agreement creates three classes of employees whose

rights and benefits vary according to different factors. The highest
rank is an employee who has obtained year-round status by working
1680 hours and has been a year-round employee for five or more
years. Such employees shall be laid-off and/or recalled by seniority.
An employee who has been year-round for less than five years
shall be laid-off and/or recalled based on experience, skill, ability,
knowledge and training as applied to the Intercampaign work
requirements and the protection of critical skills.

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The third classification of employees is those who were former

campaign employee. They are eligible to be rehired either during
campaign or Intercampaign at the last factory where they worked. If
there were more former campaign employees than available jobs at
the factory, the available jobs will be assigned on the basis of
experience, skill, ability, knowledge, and training as applied to the
campaign work. If the factors of experience, skill, ability, knowledge
and training are relatively equal among the employees, the number of
consecutive campaign seasons worked by an employee will determine
the hiring decision.
The Labor Agreement also provides that no employment
relationship exists between a former campaign employee and the
Company from the date of termination of his/her employment until
such time as the employee may be rehired and again performs work
for the Company.
The Union argued that a past practice exists, that prevents the
layoff of one seasonal employee and replacing him/her with another
seasonal employee, if work still exists in the plant which the laid off
employee was sufficiently skilled to perform. During the examination
of former Union Business Agent Joe Dyer he was asked the following
question by the Company's Attorney, Ms... Abramov:
Show me where it specifically state that seasonal
employees must be laid off in a particular manner?
Q

Again, I think if you go to Article 23 and to

Section C), it would then prohibit the layoff of a seasonal
---they are not called seasonal, they are called campaign
employees---could not be laid off if they were hired
under of the Intercampaign selection list on Article 22 by
a new employee hired off the street.
A

So I understand that's how you would like to

interpret it. But that's not what it actually says, correct?
Q

A
That's absolutely what it says and that is
absolutely the practice.

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Case 1:15-cv-00119-CSO Document 1-2 Filed 11/20/15 Page 11 of 13

Tell me where it says in this contract what you just

said, show me where that is in this contract?

I believe that Section C) speaks for itself, in

Article 23, that basically prohibits the hiring of a new
employee once a campaign employee has been selected
by the employer under Article 22.
A

Okay. So this provision is specifically about rehire,

correct?

Q
A

That's correct.

It does not state---the word "layoff' is not included

in Section C) in any form, correct?

Q
A

No,it'snot.
*

There is no written Agreement either inside this

contract or outside the contract, that the Company may
not to lay off employees, if they are seasonal if work still
exists, correct?

A
There's no written agreements. There was a
practice.

The Company acknowledged that it kept track of the hours of

seasonal employees. The Human Resources Department of the
Company prepared weekJy reports that indicated the number of hours
a seasonal employee had worked. The Company felt that they need the
flexibility to control "the headcount" by limiting the number of hours,
which enables the Company to layoff seasonal employees, without
being encumbered by the restraints the Labor Agreement places on
laying off year-round employees. The Company acknowledged that it
kept track of employee hours and used that information to avoid
allowing an employee to become a year-round employee.
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When a clear and unambiguous provision exists in a labor

agreement, arbitrators generally refuse to consider evidence that is
inconsistent with the language of the agreement. In Peabody Coal Company River King Pit 6 and United Mine Workers of America District
12, Local 1148, 99 LA 390 Arbitrator Marvin J. Feldman wrote:
A past practice establishes a term of the contract generally
of a past practice may explain a gray area of the contract.
A past practice cannot create a term of the contract where
the term sought to a clear and unambiguous term of a
written nature which was entered into at arms length by the
parties and was executed by both parties.

The Union claims that former Factory Manager Ray Bode

acquiesced to a Union request not to lay off two employees in the past
constituted an enforceable past practice is not supported by evidence.
In Tube City IMS LLC and United Steel, Paper and Forestry,
Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers international Union, Local 5652-19 133 LA 1070 Arbitrator
Gregory P. Szuter, addressing a dispute in which a company had
failed to use a clear contract right wrote as follows:
Arbitrators have routinely recognized that a past practice
will not eradicate other contract language. The failure of
the Employer, even over a long period of time, is not a
surrender of the right to start exercising such right
explicit in the Agreement.
Both Niles and Cass were seasonal employees of the Company.
The equities argue that they should have been allowed to work enough
additional hours to enable them to reach the year-round employment
and have the benefits of status.

In United Steelworkers of America (AFL-CIO, Local Union

No.4264 v. New Park Mining Company 273 F.2nd 352, the Court in
that case determined that a company did not actually go out of
business, but merely decided to subcontract its work by a leasing
arrangement, in order to end its labor agreement, prior to its expiration
date. Judge Murrah wrote as follows:
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We think this construction of a collective bargaining

contract ignores the covenant of good faith and fair
dealings which must inhere in every collective bargaining
contract if it is to serve its institutional purpose.
The actions of the Company to layoff Niles and Cass prior to
their achieving the 1680 hours of work specifically for the only
purpose of making them ineligible to become year-round employees
has the effect of violating the implied covenant in every contract of
good faith and fair dealing.

If this practice is upheld, it makes meaningless the provisions of

the Labor Agreement, which describes the process, which the parties
agreed, an employee could attain year-found status. Arbitration cannot
sanction an interpretation which makes a provision meaningless. Such
an interpretation destroys or injures the right of the other party to
receive the fruits of the contract...

iA
The grievance of the Union is granted. Niles and Cass are
awarded year-round status and the benefit resulting there from.

Dated this day of 29th day of August,

2015

FREDERICK P. KESSLER
ARBITRATOR
FMCS # 2694

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