Tucson– ASARCO, LLC President and COO Manuel Ramos announced yesterday that ASARCO would challenge an arbitration award concerning the eligibility of certain workers to a quarterly bonus based on the price of copper. ASARCO filed a petition in the United States District Court for the District of Arizona to vacate the award. Mr. Ramos explained: “The arbitrator in this case acted outside of the authority given to him under the labor contract between ASARCO and the unions. The labor contract stated that the arbitrator could neither add to nor change in any way the terms of the contract, yet the arbitrator took it up himself to do exactly that. ASARCO must challenge this award to uphold the integrity of the agreement between the Company and the unions and to prevent other arbitrators from rewriting parties’ collective bargaining agreements in the future.”
ASARCO, the United Steelworkers, and several other unions previously agreed in their labor contract that only employees covered under ASARCO’s pension plan are entitled to payment of a quarterly copper price bonus. The unions drafted this language and insisted on its acceptance as a pre-condition to entering a labor contract with ASARCO in 2007, while ASARCO was in bankruptcy.
In 2011, after the bankruptcy, ASARCO and the unions’ leadership negotiated certain modifications to the labor contract. Chief among those modifications was a provision stating that employees hired on or after July 1, 2011 are not eligible to participate in the Company’s pension plan, thereby precluding those employees from receiving the copper price bonus.
When the unions later claimed that they failed to understand the effect of what they negotiated and that had been imposed upon ASARCO while ASARCO was in bankruptcy, ASARCO made numerous efforts to resolve the problem without success. The United Steelworkers rejected those efforts and ultimately initiated the arbitration process.
The arbitrator issued an arbitration award on December 5, 2014. In the award, the arbitrator stated that there is no language in the labor contract that requires ASARCO to pay a copper price bonus to employees not covered by the pension plan. And despite explaining that he could not find for the unions based on the language of the labor contract, the arbitrator decided to re-write a specific provision of the labor contract so that employees hired on or after July 1, 2011 would be paid the copper price bonus even though they are not covered under the Company’s pension plan.