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DISTRICT 2 MARINE ENGRS. BEN. ASSN. v. PUERTO RICO
June 21, 1983
DISTRICT 2 MARINE ENGINEERS BENEFICIAL ASSOCIATION--ASSOCIATED MARITIME OFFICERS, AFL-CIO, Plaintiff,
PUERTO RICO MARINE MANAGEMENT, INC., Defendant
The opinion of the court was delivered by: LASKER
This action to compel arbitration and for appointment of an arbitrator concerns the discharge on August 20, 1981 of the licensed marine engineers employed on two ships, the S. S. Mayaguez and the S. S. Aquadilla, owned by defendant Puerto Rico Marine Management, Inc. ("PRMMI"). The factual background, which is set forth in somewhat greater detail in an earlier opinion,
may be summarized as follows.
The collective bargaining agreement between PRMMI and District 2 Marine Engineers Beneficial Association -- Associated Marine Officers AFL-CIO ("District 2"), the union that represents the discharged employees, expired on June 15, 1981. Because a new agreement had not yet been negotiated, PRMMI and District 2 agreed, through an exchange of correspondence, to extend the agreement pending negotiations. District 2's mailgram, which was sent on June 11th, stated:
"This is to advise that the contract between your Company as owners and/or operators and this union is extended beyond the expiration date of June 15, 1981. This extension can be cancelled by the union by giving 24 hours written notice. Please confirm your agreement."
PRMMI's response was sent the following day:
"This is to confirm our agreement with your telex of 6/11/81 extending our present contract between your union and this Company beyond the expiration date of June 15, 1981."
On July 17, 1981 District 2 mailed a proposed amended agreement to PRMMI for its approval (Pl. Ex. 5). PRMMI rejected the proposed agreement on August 18, 1981, and purported to terminate the collective bargaining agreement, with the following letter:
"Puerto Rico Marine Management, Inc. (PRMMI) does not agree with such proposals. Therefore, PRMMI gives notice of not renewing the Collective Bargaining Agreement and hereby terminates all collective bargaining agreements, together with all supplementary Memorandums or Agreements between the parties, if any, with MEBA-District 2."
(Pl. Ex. 7). On August 20, 1981 PRMMI discharged the licensed marine engineers represented by District 2. After its demand for arbitration of the discharges was rejected by PRMMI, District 2 filed this action to compel arbitration under the terms of the collective bargaining agreement.
In our earlier opinion we denied cross motions for summary judgment, holding that a factual issue existed as to whether PRMMI's purported termination of the collective bargaining agreement was effective and thereby relieved it of the duty under the agreement to arbitrate grievances. We found unpersuasive District 2's contention that it had the sole authority to terminate the collective bargaining agreement on 24 hours' notice and that PRMMI had agreed to be perpetually bound by the agreement as long as District 2 chose not to terminate. We also rejected PRMMI's argument that it was free to terminate the agreement at will, finding this contention to be inconsistent with the language of the Extension Agreement and the context in which the parties agreed to the extension:
"The purpose of the extension agreement here was to allow the parties to negotiate toward a new agreement while enjoying the protections of the prior agreement. Such a purpose suggests that the extension was intended for a reasonable time during which negotiations would take place. It also suggests that the good faith negotiations would occur, with a view toward reaching agreement on another contract, and that termination would not occur without reasonable notice by the terminating party. The determination ...
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