In an unusual move, a federal judge has overturned a $1.2 million arbitration award to some employees of Bethlehem Steel Corp.'s Sparrows Point factory.
U.S. District Judge J. Frederick Motz ruled that the award amounted to illegal "punitive" compensation and ordered the arbitrator to reconsider.
The case stems from a reassignment in 1987 of some workers at the sprawling steel factory in Baltimore County. The company said it needed to repair cranes, and assigned its "crane millwrights" to concentrate on that work. At the same time, it transferred some of the non-crane electrical repair jobs the crane millwrights had been performing to millwrights who generally did mechanical repairs.
The union challenged the reassignment and the case went to arbitration, where arbitrator Rolf Valtin ruled in favor of the union and ordered $1.2 million in back pay to the affected workers. The pay was calculated on the basis of 75,000 hours of $15-an-hour work wrongfully reassigned over 2 1/2 years.
It was left to later proceedings to decide how many workers would split the money. There are about 70 crane millwrights affected.
Motz ruled that "the arbitrator's award in this case is punitive because it bears no rational relation to any loss suffered by the crane millwrights." He said the crane millwrights may have lost some work to the millwrights, but they also gained some work with the extra crane repairs.
Earle K. Shawe, an attorney with the firm of Shawe & Rosenthal, which represented Bethlehem, called the decision unusual, because judges are reluctant to meddle with arbitration awards.
Bill Nugent, a staff representative for the United Steelworkers of America, said, "We're not upset about this." He said he had been happy with the $1.2 million award, and now will try to win a similar or larger award when the arbitrator reconsiders the case.