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International Brotherhood of Teamsters, Local Union No. 639 v. Airgas, Inc.

United States District Court, D. Maryland

March 3, 2017

AIRGAS, INC., Defendant.


          THEODORE D. CHUANG United States District Judge.

         On March 6, 2017, Defendant Airgas, Inc.[1] ("Airgas") a company engaged in the provision of gases for medical and industrial uses, will move two operational functions from its Hyattsville, Maryland facility to facilities in Montgomeryville, Pennsylvania and Linthicum Heights, Maryland. As a result, 13 positions held by members of Plaintiff International Brotherhood of Teamsters, Local Union No. 639 ("the Union") will be eliminated. The Union, contending that this transfer of functions violates the terms of its collective bargaining agreement with Airgas, has filed this action pursuant to Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (2012), seeking an injunction to bar Airgas from relocating those operations pending arbitration of the dispute. On February 28, 2017, the Union filed a Motion for a Temporary Restraining Order ("TRO") as well as a Motion for a Preliminary Injunction. On March 1, 2017, Airgas submitted a consolidated Memorandum in Opposition to those Motions. The Court has considered the documentary evidence submitted by the parties and held a hearing on March 2, 2017 at which it heard witness testimony and oral argument, thus rendering moot the Motion for a TRO. See Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cnty., 415 U.S. 423, 439 (1974) (stating that a temporary restraining order in a federal case is to be limited to "preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing, and no longer"). Based on the findings of fact and conclusions of law set forth below, the Motion for a Preliminary Injunction is GRANTED.


         The Union is a labor organization within the meaning of the LMRA, 29 U.S.C. § 185(b), and represents approximately 65 employees working at Airgas's Hyattsville, Maryland facility. Airgas is an employer engaged in an industry or activity affecting commerce within the meaning of the LMRA, 29 U.S.C. § 185(a), and the National Labor Relations Act, 29 U.S.C. § 152(2). The Union and Airgas are parties to a Collective Bargaining Agreement ("CBA") effective June 15, 2014 to June 14, 2018. That agreement has three Articles relevant here.[2] Article 9 reserves to Airgas the exclusive right to manage its business as it sees fit in all matters not expressly governed by the CBA, in particular to "[s]ell, lease, transfer, move, change location, discontinue, relocate all or part of the business or operations provided timely notice is given the Union and effects bargaining is offered." CBA Art. 9, Compl. Ex. 1 at 17-18, ECF No. 1-1.

         Article 10, entitled "Subcontracting, " provides that Airgas "shall not subcontract, transfer, lease assignment or conveyance [sic] in whole or in part, directly or indirectly, any work or service of the kind, nature or type covered by the [CBA], and presently performed or hereafter assigned to the collective bargaining unit." Id. at 19. Article 10 further provides that Airgas shall not "be part of, or permit, any other work arrangement whereby such work or services may be performed by other than employees of the employer in the collective bargaining unit covered by [the CBA]." Id.

         Article 18 establishes a grievance and arbitration procedure that "shall be the sole and exclusive means for the determination of all disputes, complaints, controversies, claims or grievances whatsoever arising pursuant to the terms and conditions of the [CBA]." Id. at 30.

         In a letter dated February 1, 2017, Airgas informed the Union that it "tentatively" planned to "completely shut down and move two discrete parts" of the Hyattsville facility, specifically the High Pressure Resisting and Liquid Can Repair function (the "HPRLCR function") and the Small Medical Oxygen filling function (the "SMO function"). Feb. 1, 2017 Ltr., Compl. Ex. 3, ECF No. 1-3. Airgas stated that the HPRLCR function would be moved to Airgas's Montgomeryville, Pennsylvania facility and that the SMO function would be relocated to Airgas's Linthicum Heights, Maryland facility. Neither the Montgomeryville nor the Linthicum Heights facility utilizes union employees. Airgas concluded the letter by assuring the Union that any resulting reductions in the Hyattsville facility workforce would be imposed in compliance with the CBA.

         In a February 2, 2017 responsive letter, the Union asserted that Airgas's plan violated Article 10 of the CBA because it amounted to a transfer of bargaining unit work and requested additional information about the plan. In a letter dated February 9, 2017, Airgas disputed the applicability of Article 10, which it deemed to be limited to subcontracting, and asserted that its plan fell under Article 9's provision reserving for management the decision to relocate all or part of the business. Airgas stated that the relocation of work was motivated not by costs savings, but by the resulting ability to achieve "efficiencies" based on consolidating operations, move work to the geographic areas where there was higher demand, improve customer service, and comply with federal requirements regarding the storage of gases and chemicals. Feb. 9, 2017 Ltr. at 4, Compl. Ex. 5, ECF No. 1-5. Airgas's second letter also set a date for the transfer, tentatively calendaring it for March 3, 2017, and provided a chart indicating that 11 Union employees could be subject to lay-offs as a result of the transfer. Airgas also stated that it was currently seeking to hire individuals to fill five new positions to conduct the transferred work at the Montgomeryville facility.

         On February 13, 2017, the parties met in an unsuccessful effort to resolve the issue, prompting the Union to file a formal grievance on February 17, 2017. In that grievance, the Union asked Airgas to stay any transfer until the grievance was resolved and proposed that both sides waive the preliminary grievance steps set forth in the CBA and proceed to expedited arbitration. On February 22, 2017, Airgas denied the Union's grievance, citing Article 9 of the CBA, and refused to stay its transfer plan or to participate in expedited arbitration.

         Airgas presently plans to execute on the transfer of the HPRLCR and SMO functions beginning on March 6, 2017, when it will begin physically to move equipment out of the Hyattsville facility. According to the testimony of Airgas Assistant Vice President of Operations Joel Young, several pieces of equipment will be moved to the Montgomeryville site. Specifically, one of two Hyattsville valve machines will relocated, a process that, because of the size and self-contained nature of the machine, requires the machine to be loaded onto a flat-bed, tractor-trailer. Airgas will also move a paint booth, a 12' x 12' x 14' enclosed unit used for repainting gas canisters. Relocating the paint booth requires that it be dismantled into four sections and reassembled after transport. In addition to these two large pieces of equipment, Airgas will be moving various "consumable" parts, such as disposable valves and paint, and a computer system that controls one of the machines. Only consumables will be moved to the Linthicum Heights facility; the two pieces of SMO equipment at the Hyattsville facility will instead be placed into storage. Young asserted that all of the equipment removed from Hyattsville could be returned if required.

         According to the testimony of John Gibson, the Secretary-Treasurer of the Union, he observed during a visit to the Hyattsville facility on March 1, 2017 that the process of preparing the equipment for shipment or storage was already underway. Sometime after his earlier visit to the facility a week before, various parts of the paint booth had been dismantled, and one of the machines was no longer operational. Workers informed Gibson that they had been specifically instructed to begin dismantling the paint booth and that some supplies had already been shipped to Montgomeryville.

         Airgas plans to convert some of the Hyattsville facility space opened up by the relocation into storage facilities for nitrous oxide and various chemicals. Such a storage area is required to bring Airgas's practices into compliance with Food and Drug Administration ("FDA") regulations regarding the storage of nitrous oxide and Department of Homeland Security ("DHS") requirements for the storage of "chemicals of concern." Feb. 9, 2017 Ltr. at 5. Airgas's previous storage practices had been found deficient during a recent DHS audit. Specifically, Airgas plans to repurpose one room previously used for the relocated operations into a unit dedicated to the "safe and secure" storage of nitrous oxide and plans to utilize "freed-up yard space and cages" to bring its storage of other chemicals into compliance with federal requirements. Id.

         As for personnel, Airgas now estimates that the transfer will result in the loss of 13 Union positions at the Hyattsville facility. Because of vacancies, pending transfers, conduct-based terminations, and employees presently on family or medical leave, only one or two layoffs will occur immediately. However, others would follow when employees on leave return to work. Several drivers told Gibson during his March 1, 2017 visit to the Hyattsville facility they were concerned that with the SMO facility gone, their delivery routes would shrink, and noted that Airgas had already sent drivers from the Linthicum Heights facility to Hyattsville to learn their routes.[3] Thus, to the extent not covered by the planned lay-offs, such reductions in delivery activities could further reduce the work available to Union members.

         Hyattsville employees who endure lay-offs will be eligible for recall under the terms of the CBA. Airgas offered, as part of effects bargaining, to give such employees preferential consideration for openings at the Montgomeryville and Linthicum Heights facilities or severance benefits, but the Union rejected the proposal. As it turns out, Airgas has already hired and begun to train the five new ...

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