UAW's deal to end strike forfeits right to sue GM for idling plants last year

Key Points
  • The UAW filed the lawsuit in February, three months after GM announced plans to "unallocate" and potentially close up to four U.S. plants.
  • The union argued GM was in breach of its 2015 contract with the UAW. The company has denied such allegations.
  • The UAW's 48,000 members with GM are voting on the tentative agreement through Friday.
GM workers rally outside the GM Lordstown plant on March 6, 2019 in Lordstown, Ohio. The sprawling facility was idled today after more than 50 years of producing cars and other vehicles.
Jeff Swensen | Getty Images

DETROIT — The UAW's proposed deal to end the 38-day strike against General Motors includes the union's agreement to drop a lawsuit that accused the automaker of violating the previous contract if it went ahead with plans to close some U.S. plants.

 The issue would instead be sent to arbitration under the proposed four-year labor contract that 48,000 union members are voting on through Friday.

The UAW filed the lawsuit in February, three months after GM announced plans to "unallocate" and potentially close up to four U.S. plants, including an assembly plant in Detroit that would not permanently shutter under the tentative agreement. GM's announcement to end production at the plants, which also included a large assembly plant in Ohio,  drew the ire of President Donald Trump.

The union has argued that GM was in breach of contract because the company stated in 2015 that it would "not close, idle, nor partially or wholly sell, spin-off, split-off, consolidate or otherwise dispose of in any form," any plant under the four-year deal. However, the company also said, "conditions may arise that are beyond the control of the company," like an act of God or decline in demand, that could make that commitment "impossible."

GM has argued the announcement was not a breach of contract. It previously filed a motion to arbitrate the UAW's claims, which the union opposed. As part of the tentative agreement, the lawsuit would be dismissed with prejudice, meaning it could not be brought up again.

GM, UAW tentative deal will close three plants and senior employees receive bonus
GM, UAW tentative deal will close three plants, senior employees receive bonus

Arbitration could have positive implications for UAW members who were employed at an "unallocated plant" as of Nov. 26, the date GM announced the plans. Workers who chose to accept employment at another GM facility instead of being laid off could be entitled to certain benefits. Arbitration, according to the deal, also would include whether some workers who remain employed with the automaker are entitled to any lost wages.

Spokespeople with the UAW and GM declined to comment or did not immediately respond regarding the potential arbitration.

The "unallocated" plants include Baltimore Transmission in Maryland, Lordstown Assembly Complex in Ohio and Warren Transmission in Michigan. They employed about 2,000 hourly UAW members at the time of GM's November announcement.

Under the tentative agreement, a separate lawsuit filed by the union in January over GM's use of temporary workers in connection to the unallocated plants also would be dismissed with prejudice, according to the tentative agreement.