Ethyl Corp. v. United Steelworkers of America, etc.

Ethyl Corp. v. United Steelworkers of America, etc.

Opinion

 [*182]  POSNER, Circuit Judge.

The steelworkers union appeals from a judgment setting aside a labor arbitrator's award. The appeal requires us once again to consider the scope of judicial review of labor arbitration awards.

In 1980 the union signed a collective bargaining contract with Ethyl Corporation to govern employment at a chemical plant in Indiana. The contract contained a provision that an employee with one or more years' service who had worked 1,040 hours during a calendar year and was "on the payroll of the Company on December 31" of that year would have a "vested right" to a paid vacation the following year. A worker who was "terminated for any reason" before December 31 and was later "reemployed" would become entitled to a full paid vacation upon working [**2]  200 hours in the year in which he was reemployed.

On October 15, 1981, the company announced that it would close the plant, which had 33 workers, in mid-November. The company discharged eleven of the workers on October 18, ten in November, and eight on December 4, which was when the plant actually closed; the other four workers had not been working on October 15, because of disability. Although all 33 workers had worked more than 1,040 hours in 1981, the company refused to give vacation pay to 33 of them -- the 29 active  [*183]  workers plus a disabled worker whose disability ended on December 22. Only the three who were still disabled on December 31 got vacation pay.

The union filed a grievance on behalf of the 30, asserting that everyone who had been on the payroll when the shutdown was announced on October 15, 1981, was entitled to vacation pay for 1982. Pursuant to the collective bargaining agreement, the dispute was referred to an arbitrator, who on December 22, 1982, issued an award that stated, "The grievance is hereby sustained." In an accompanying opinion the arbitrator explained that although the workers would have had no right to vacation pay in 1982 if they had [**3]  been laid off before December 31, 1981, because none of them worked 200 hours in 1982 (they worked no hours that year -- the plant was closed), the parties had not intended the provision for layoffs to apply to a plant closing. Having (by closing the plant) made it impossible for the workers to earn a paid vacation for 1981 by working 200 hours in 1982, the company could not use the requirement that workers be on the payroll on December 31 to deny them vacation pay. Therefore, "employees who were actively working at the time of the plant closing on December 4, 1981, are entitled to vacation pay for 1982."

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