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Civil No. 87-0067-P
May 19, 1989, Decided
Timothy L. Belcher Esq. Patrick N. McTeague Esq. Jeffrey Neil Young Esq. McTeague Higbee Libner Topsham Maine for Plaintiffs.
John T. Salburg Esq. Boise Cascade Corporation Boise Idaho Andrew M. Horton Esq. Verrill & Dana Portland Maine David Fourtney Esq. Morgan Lewis & Bockius Philadelphia Pennsylvania for Defendant.
Gene Carter, United States District Court.
The Hon. Justice Carter

This action seeking relief under section 301 of the National Labor Relations Act 29 U.S.C. SEC.. 185 for alleged breaches of a hiring moratorium agreement and a good faith agreement was tried to Court on February 21 and 22 1989. The facts many of which have been stipulated to by the parties are as follow.

For many years Plaintiffs [the Union] have represented production and maintenance employees at Defendant Boise Cascade Corporation's (Boise's) Rumford Maine paper mill. In June 1986 the contract negotiations broke down and the Union began a strike which lasted from July 1 until September 14 1986 when a new collective bargaining agreement was signed. On July 21 1986 Boise unilaterally implemented in part its final offer to the Union.

During the strike Boise hired persons to replace striking members of the Plaintiff Unions. The hiring procedure included screening and evaluation procedures. Successful candidates were eligible to be offered employment. Boise usually made the offers by telephone or in person and the offers could accept orally. The screening procedures included a drug test and the policy of the company for several years had been that employment was contingent upon passing the drug screening and specifically that offers of employment would not be made to an applicant until Boise had received satisfactory drug test results for that person. The hiring process was accelerated during the last week of the strike. Near the very end of the strike Boise officials decided to offer employment to applicants whose drug test results had not been received. Beginning at about 7:00 a.m. on September 12 1986 and continuing through that day offers were made to and accepted by eighteen applicants whose drug screens were not complete. The results of the urine tests were received by Boise on Saturday September 13 1986. Prior to the offers being made on Friday September 12 however a blue sticker indicating satisfactory drug and medical screening had been placed on the files of all eighteen applicants. The hiring officers assumed when they made the offers that the drug screen had been completed.

At the request of Governor Brennan the parties met in Augusta on September 11 and 12 1986 to attempt to resolve the strike. On Friday September 12 the parties' representatives completed negotiation of a return-to-work agreement. The Union told Boise that the proposed agreement would be presented to Union members for consideration over the weekend. At about 3:00 p.m. Friday Gary Cook a Union representative asked Boise to suspend hiring of replacement workers until the Union members had had an opportunity to vote on the return-to-work agreement. Because such a suspension could not be implemented immediately the parties agreed that

(1) effective 5 p.m. Friday September 12 1986 Defendant would suspend hiring of replacement workers to fill positions previously occupied by striking members of Plaintiff Unions; (2) the suspension would last up to 48 hours i.e. to 5 P.M. Sunday September 14 1986 at which point Defendant was free to resume replacement hiring unless prohibited by other agreements between the parties then in effect.

Revised Stipulation para.22. At no time during the discussions leading to this agreement did the parties have any discussion regarding a definition of the term "hiring."

Defendant continued to screen and evaluate job applicants during the moratorium period but did not make any statements to any applicants purporting to constitute offers of employment after 5:00 p.m. Friday September 12 1986. By a secret ballot the Union voted to accept the labor agreements and it notified Boise of the acceptance on Sunday September 14 1986 at 1:07 p.m.

Following the end of the strike striking workers who had not been permanently replaced returned to work. The eighteen workers whose drug test results had not been received but who had orally accepted employment on Friday September 12 were placed on the payroll as permanent replacements for seventeen striking workers.

The first issue presented is whether Boise breached the hiring freeze agreement. The Union argues that Boise did so by accepting drug screen results of eighteen persons on Saturday because that action resulted in the "hiring" of permanent replacements for striking Union members. The Court disagrees finding that the eighteen workers who are the subject of dispute here had been hired as permanent replacements for the strikers before the hiring freeze went into effect at 5:00 p.m. on September 12 1986.

Boise was entitled to replace the economic strikers. NLRB v. Mackay Radio & Telegraph Co. 304 U.S. 333 82 L. Ed. 1381 58 S. Ct.904 (1938). It was also entitled to set the conditions of employment for the replacement workers without negotiating with the Union. Times Publishing Co. 72 N.L.R.B.676 684 (1947); Capitol-Husting Co. Inc. v. NLRB 671 F.2d 237 (7th Cir.1982). Thus although a four-phase process culminating with a medical drug screening had been used at the beginning of the strike to determine eligibility for employment as a permanent replacement Boise had the right to change this procedure.

The record makes plain that Boise did indeed change the terms of employment of replacement workers on the last day of the strike when it began to offer employment to replacement workers without requiring that they first have passed the drug screen. Just the fact that the change was implemented indicates that Boise intended that employment would be effective upon acceptance of the offer even without receipt of the drug screen results. This finding is bolstered by the fact that the Boise personnel charged with making employment offers to permanent replacements were provided files indicating that the applicants had already passed the medical and drug screens. There is no evidence that the offerees understood anything different or that they understood their acceptances to be conditional in any respect. *fn1 Given the "mutual understanding of employment" between Boise and the offerees at the time they tendered their acceptances on Friday September 12 see H. & F. Binch Co. v. NLRB 456 F.2d 357 362 (2d Cir.1972) Court finds that the eighteen permanent replacement workers discussed in this case had been hired before the hiring freeze went into effect at 5:00 p.m. on Friday September 12. *fn2 Since the Union has not alleged that any individuals other than the eighteen mentioned above were hired during the hiring freeze no violation occurred.

Plaintiffs also allege that by not disclosing that it had changed its procedure of offering employment only to those who passed the drug screen Defendant breached an agreement to exercise good faith in the administration of its responsibilities. At trial Gary Cook the Union's International Representative who had participated in the September 12 negotiations testified:

[Good faith] was talked about a number of times the union had some concern over good faith and the lack of what we call grievability of the labor agreement under the changes that were going to be made in the new labor agreement. The company offered some language in the return to work agreement which dealt with grievability and good faith and further we were told by Duane Johnson that he personally would be available to make sure that all issues -- the return to work the contract and other issues that we felt were relevant would be handled in good faith by the company that he would supervise that himself.

Tr. 42. This testimony does not establish the existence of an enforceable contract requiring Boise to act in good faith. It lacks specificity and does not set forth all the necessary elements of a contract including for example consideration.

The Union also has cited Reid v. Key Bank 821 F.2d 9 12 (1st Cir.1987) in which Court of Appeals found an actionable implied covenant of good faith and fair dealing under Maine law in the performance and enforcement of contracts. It is plain that "the Company's conduct is allegedly concealing from the Union the fact that it offered employment on Friday to applicants who were not yet eligible Plaintiffs' Post-Trial Brief at 11, took place during the negotiation phase of the hiring freeze contract rather than the performance or enforcement phase. Neither Reid nor the provisions of contract law upon which it is based, Restatement (Second) of Contracts Sec. 205 and Uniform Commercial Code, 11 M.R.S.A. SEC. 1-203, establish a good-faith requirement in the negotiation of contracts.

Plaintiff also complains that Boise's acceptance of the drug screen results during the hiring freeze was not in good faith. Court has already determined, however, that acceptance of the results did not constitute hiring, and that in fact, on this record, the significance of the drug test results for the newly hired permanent replacements was not established.

Finally, Court notes that Boise had no independent duty to disclose the change in its hiring procedures, violation of which might be construed also as a breach of a duty of good faith. During negotiations the general rule is that an employer must supply on request 'relevant information' 'in the employer's possession' 'needed by a labor union for the proper performance of its duties as the employees' bargaining representative.'" Soule Glass and Glazing Co. v. NLRB 652 F.2d 1055 1092 (1st Cir.1981) (emphasis added) (quoting Detroit Edison Co. v. NLRB 440 U.S. 301 59 L. Ed. 2d 333 99 S. Ct.1123 (1979)). During the negotiations on September 12 1986 there was never a request by the Union for information on hiring procedures or the status of the drug test. Although Boise might have had a duty to bargain over the drug test in ordinary circumstances as was discussed previously its failure to do so when hiring permanent replacements was permissible. Court therefore finds no breach of any good-faith obligation owed to the Union.

Accordingly it is ORDERED that judgment be entered for the Defendant.

Dated at Portland Maine this 18th day of May 1989.


*fn1 Ms. Gautier the person in charge of physical exams during the strike testified that she believed Boise had discussed with the permanent replacements the fact that offers of employment were being made despite the lack of drug screen results. Tr. 125. She did not remember what had been said id. and from her later testimony Court infers that she did not tell the applicants about the change in the drug test procedure but she believed the physician had told them. Tr. 132-33. There is therefore no record of what if anything the replacements were told. Certainly the people offering the jobs did not tell them the employment was conditional on their passing the drug test for they did not know the test had not already been passed. Tr. 98-101. Moreover it is not clear from the record exactly what the status of the drug screen was after the procedures had been changed. Ms. Gautier testified that she did not know whether persons who had accepted employment and subsequently failed the drug screen would be able to work. Tr. 128. Mr. Peterson the company's representative also testified that he did not know if the rule requiring new employees to have satisfactory results from the drug screen had been suspended during the strike. Tr. 148.

*fn2 The Union argues that determination of a breach of the hiring freeze agreement would be dependent on the meaning of the word "hiring" in that agreement. Court finds however that no matter what the meaning of the term "hiring" was under the agreement the eighteen workers at issue here were hired as permanent replacements before that agreement went into effect.