Arbitrator directs Interlake to pay lost wages, lost pension compensation, interest to AMO officers

Arbitrator directs Interlake to pay lost wages, lost pension compensation, interest to AMO officers

Company's appeal of arbitrator's original decision pending in federal court

The court-ordered arbitration between American Maritime Officers and Interlake Steamship Company advanced in December as a contract arbitrator directed the company to pay lost wages, benefit compensation and interest to AMO members who walked off Interlake vessels after being ordered to join the Marine Engineers' Beneficial Association as a condition of continued employment in 2003.

In a report dated Dec. 17, 2007, Contract Arbitrator Douglas Ray defined the "remedy" to resolve AMO's class action grievance against Interlake for the company's violation of its collective bargaining agreement with the union. The remedy is intended to "make whole" the AMO members who resigned their positions with Interlake as a result of the violation.

After evaluating arguments and information presented by both AMO and Interlake, Ray assigned dollar values to the lost wages for certain AMO officers through Dec. 31, 2004, as well lost pension benefits. Ray also directed the company to pay interest on these amounts, and instructed the company to pay AMO's attorneys' fees in pursuing the grievance.

"With interest and legal fees, we're expecting the remedy to exceed $500,000," said the AMO National Great Lakes Vice President. "We are committed to making sure the AMO members who stood strong and refused to accept MEBA membership under the collusive Interlake contract receive as much justice as this process will allow."

Ray issued his original decision on AMO's class action grievance in May 2005. Ray determined Interlake violated its collective bargaining agreement with AMO and directed the company to make whole the AMO officers who resigned their positions as a result. Interlake filed a lawsuit in federal court challenging the remedies set forth in Ray's original decision. The court ruled against Interlake and upheld the arbitrator's decision. Interlake has appealed federal court's ruling and the case is now pending.

AMO was the exclusive collective bargaining agent for the officers and stewards working aboard the Interlake vessels and had a valid contract with the company effective through July 31, 2003.

In an arrangement brokered by ex-AMO official Jerry Joseph, Interlake executives met in secrecy with MEBA officials while the AMO contract was in effect. On July 25, 2003, Interlake and MEBA signed a concessionary 10-year contract covering the fleet's engineers and mates.

In the week that followed the signing of the contract, Interlake vessels were boarded by Interlake executives, MEBA officials and MEBA benefit fund representatives working together. During that week, the company's engineers and mates were ordered to join MEBA as a condition of continued employment.

Many AMO members walked off Interlake's ships and the union filed a class action grievance against the company July 28, 2003. Ray issued his original decision on the grievance May 2, 2005. In that decision, Ray determined Interlake "had breached its collective bargaining agreement with the AMO" and directed the company to make whole the officers who resigned.

In his 2005 report, Ray noted AMO members were presented with "dramatic evidence" that Interlake's obligation to AMO, their "chosen and exclusive bargaining representative," had been breached "in the form of an employer-MEBA agreement signed and dated before expiration of the AMO agreement. Second, they were provided with even more dramatic evidence of the breach when the employer sponsored the presence of MEBA representatives on its vessels during the term of its AMO agreement. Not only did such representatives present the new contract terms, but they also made available forms for officers to use in resigning from the AMO, all during the term of the AMO agreement."

Ray continued: "Article II of the employer-MEBA agreement presented to them required them, as a condition of employment, to become and remain members of MEBA despite the fact that their unit had never asked to be represented by MEBA through election, card check or any other means and they were not an accretion to a bargaining unit that had selected MEBA as a representative. Instead, their continued employment was tied explicitly to and conditioned on their joining and remaining members of a third-party organization they did not select, but which had worked and conspired with the employer to violate the agreement which the employer had signed with their chosen representative and to replace that representative."

"The company has tried to skirt the arbitrator's decision at every turn," said the AMO National Executive Vice President. "As with our lawsuit against MEBA, the right and wrong sides in this struggle are obvious. A federal court has already upheld the arbitrator's original decision and Interlake has appealed that ruling. The company seems determined to drag this process out as long as it possibly can."

Testimony and information were presented in June of this year in the settlement phase of the court-ordered arbitration, leading to Ray's Dec. 17 directive specifying the compensation amounts and other provisions to make whole the AMO officers involved in the class action grievance.

In his Dec. 17 report, Ray specifically directed Interlake to pay three AMO members in various amounts a total of $6,375 to compensate for lost pension benefits. For lost wages, Ray directed Interlake to pay 18 AMO members in various amounts a total of $340,838. He also directed the company to pay 5 percent interest on those amounts from July 5, 2006, until the time of payment. These totals do not include the interest payments or attorneys' fees Ray has directed Interlake to pay.

Interlake had filed a lawsuit in federal court challenging Ray's May 2005 decision. On July 5, 2006, U.S. District Court Chief Judge James Carr ruled against Interlake and upheld the arbitrator's decision and directive to make whole the AMO officers involved in the grievance.

Interlake has appealed Judge Carr's ruling and that case is pending before the U.S. Court of Appeals for the Sixth Circuit. If Interlake loses the appeal, the company could conceivably attempt to appeal the decision to the U.S. Supreme Court.

Separately, AMO filed a lawsuit in the Lucas County (Ohio) Court of Common Pleas in December 2005 charging MEBA and the MEBA benefit funds with unlawfully interfering with a valid collective bargaining agreement between AMO and Interlake Steamship Company--tortious interference.

In the complaint, AMO is seeking $60 million in "direct and consequential" damages, $280 million in punitive damages, attorneys' fees and court costs and "any further relief in law or equity to which plaintiff (AMO) is entitled."

MEBA has sought repeatedly but unsuccessfully to delay the case or shift it from the Ohio court to federal court. On Sept. 27 of last year, the U.S. Court of Appeals for the Sixth Circuit dismissed an attempt from MEBA to have the case remanded to a federal court.

The trial on the tortious interference complaint is scheduled for August 2008. Named as defendants in the lawsuit are the Marine Engineers' Beneficial Association, Former MEBA President Ron Davis, Current MEBA President Don Keefe, the MEBA Medical and Benefits Plan, the MEBA Vacation Plan, the MEBA Training Plan, the MEBA 401(k) Plan and the MEBA Pension Trust.

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