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Federal appeals court rules Caterpillar payments legal

March 5, 1997

PHILADELPHIA (AP) _ Company payments to union representatives who work full-time on union business are legal, a federal appeals court ruled in a case arising from a Caterpillar Inc. labor battle.

Caterpillar stopped making such payments several years ago and had sought a court ruling to support its position.

``We simply do not view the payments at issue here as posing ... harm to the collective bargaining process ...,″ 3rd U.S. Circuit Court of Appeals Judge Richard L. Nygaard wrote for the majority in the 9-3 ruling.

The decision, filed on Tuesday, overturns case law from a 1986 appeals court ruling in a case between Trailways Lines Inc. and the Amalgamated Transit Union.

At issue was Caterpillar’s practice of giving committee members and grievance officials with United Auto Workers Local 786 at its York, Pa., plant full pay and benefits to work full-time on union business. Union officials were compensated as if on paid leaves of absence from their last factory jobs.

Peoria, Ill.-based Caterpillar and the union failed to reach agreement on a contract in 1991, and Caterpillar employees are still working without a pact.

About a year after the contract expired, Caterpillar informed the union it would stop paying the union officials.

The union filed an unfair labor practice complaint with the National Labor Relations Board, alleging that by ending the payments, Caterpillar was refusing to bargain in good faith.

Caterpillar then sought and received a judgment in federal court that the payments violated the Labor Management Relations Act.

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