Caterpillar, Inc. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America

PETITIONER: Caterpillar, Inc.
RESPONDENT: International Union, United Automobile, Aerospace and Agricultural Implement Workers of America
LOCATION: United States Shoe Corporation

DOCKET NO.: 96-1925
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT:

CITATION: 523 US 1015 (1998)
ARGUED: Jan 20, 1998
DECIDED: Mar 23, 1998

ADVOCATES:
Beth S. Brinkmann - on behalf of the United States, as amicus curiae, supporting the Respondents
Columbus R. Gangemi, Jr. - on behalf of the Petitioner
David M. Silberman - on behalf of the Respondents

Facts of the case

United Auto Workers and Caterpillar, Inc. were involved in a working agreement that provided for employees of Caterpillar, Inc. to devote part of their time to processing employee grievances on behalf of the union, while still maintaining full-time employment status and benefits. This agreement was eventually expanded to allow employees to continue receiving benefits from Caterpillar while working full time for the union. In 1991, Caterpillar refused to continue paying benefits to workers who were not directly providing services for the company. The union filed with the National Labor Relations Board (NLRB) asserting that Caterpillar was engaging in unfair labor practices. Caterpillar claimed that the benefit payments violated section 302 of the Labor Management Relations Act (LMRA). Both the NLRB and the District Court found that the payments did in fact violate Section 302 of the LMRA.

On appeal, the U.S. Court of Appeals for the Third Circuit reversed and ruled for the union. The Third Circuit found that Congress had not intended the LMRA to ban the type of payments at issue. Then-Judge Samuel Alito dissented, arguing that the payments were illegal under the plain meaning of the legislation.

Question

Does an employer who grants paid leave of absence to employees who then go to work as a union's full-time grievance chairmen violate Section 302 of the Labor Management Relations Act?

Media for Caterpillar, Inc. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America

Audio Transcription for Oral Argument - January 20, 1998 in Caterpillar, Inc. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America

William H. Rehnquist:

We'll hear argument now in Number 96-1925, Caterpillar, Inc. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America.

Mr. Gangemi.

Columbus R. Gangemi, Jr.:

Mr. Chief Justice, and may it please the Court:

The issue for consideration, in a nutshell, is whether it is lawful for an employer and a union to agree that the employer shall pay the wages of a union official, or union officials, for their services as union officials, where the union official used to be an employee of the payor employer.

Our position is, is that under section 302 of the Labor Management Relations Act and a fair reading of the plain language of that statute, such an arrangement is clearly unlawful.

This Court in Arroyo many years ago said that a literal reading of the language of the statute does no offense... does no violence, I believe the term was... to common sense and so I believe it is useful at the threshold to consider for a moment what common sense would suggest is the answer to the question in light of what we all know to be bedrock Federal labor policy and that is, is that notwithstanding the fact that ultimately there is an economic interdependence between labor and management, that the relationship is to be maintained as one of adversarial independence.

In light of that fundamental policy that has been expressed by this Court on numerous occasions, from insurance agents on forward, to ask the question, is it lawful for an employer to pay a union official for his services as a union official is to answer the question.

Sandra Day O'Connor:

Well, let me ask you this, Mr. Gangemi, do you think the wage payments would be lawful if the employees actually worked for the employer an hour a day and the rest of the time for the union?

Columbus R. Gangemi, Jr.:

I believe that the statute provides that an employer may pay for the services of that individual as an employee, but may not pay--

For the hour a day.

Columbus R. Gangemi, Jr.:

--For the hour that he works as an employee of the employer, but for the--

Sandra Day O'Connor:

So on the no-docking arrangements, you think a fortiori they would be invalid, where there's been full pay but only part work for the employer.

Columbus R. Gangemi, Jr.:

--No, Your Honor.

No?

Columbus R. Gangemi, Jr.:

I believe that to understand whether or not a payment is lawful under a no-docking arrangement one must go to the safe harbor language of the 8 (a)(2) proviso of the National Labor Relations Act, which is from whence the no-docking provision gets its genesis.

That language, that section says that notwithstanding anything else, it... an employer shall not be prohibited from permitting an employee to confer with him during regular hours without loss of pay.

Antonin Scalia:

That isn't all... that isn't all that a shop steward does, unfortunately.

I mean, if you're appealing to plain language, that would allow the shop steward to be paid only for the time that he spends conferring with the employer and not with consulting the employees who have grievances, and so forth.

Columbus R. Gangemi, Jr.:

The board and the courts have extended that language, rightly or wrongly, to include conferring with each other, conferring with fellow employees, in preparation for or in conjunction with conferring with management.

Antonin Scalia:

Okay.

What about a full-time shop steward?

He spends his full time--

Columbus R. Gangemi, Jr.:

If--

Antonin Scalia:

--conferring with other employees and with the employer.

Columbus R. Gangemi, Jr.:

--Again, Your Honor, it depends on the nature of the relationship.

If a steward has ceased to be an employee of the employer and instead become a full-time agent, or to the extent that he is acting as an officer of the union--

Antonin Scalia:

I don't know what you mean, to the extent that he's acting as an officer.

He spends his full time on union work.

Columbus R. Gangemi, Jr.:

--Your Honor, I do not think the distinction is one of full-time versus part-time.

I think the distinction is, is he being paid for his services as a union official, which is unlawful, or is he being paid for his services as an employee, which is lawful.