AMO WINS AGAIN

AMO wins another round in Interlake contract dispute.


Judge upholds arbitrator's penalties for violation of collective
bargaining agreement American Maritime Officers prevailed in federal
court July 5 when a judge refused to overturn a contract arbitrator's
penalties against Interlake Steamship Co. for violations of its
collective bargaining agreement with AMO three years ago.


The ruling from Judge James G. Carr of the United States District Court
for the Northern District of Ohio (Western Division) meant Interlake
must compensate AMO and approximately 17 AMO members for losses
resulting from the contract violations, which included the signing by
Interlake of a controversial 10-year contract with the Marine Engineers'
Beneficial Association while the company's three-year agreement with AMO
was still in effect. The Interlake-MEBA contract was signed on July 25,
2003, six days before the expiration of the AMO-Interlake agreement.

Arbitrator Douglas E. Ray imposed the penalties -- 17 months' back wages
for each of the 17 individual AMO members and attorneys' fees for the
union--after four days of hearings on the AMO-Interlake contract dispute
between September 2004 and December 2004.

In the court-ordered arbitration sought by AMO, Ray concluded that
Interlake had violated its agreement with AMO not only by signing the
contract with MEBA while the AMO-Interlake agreement was valid, but by
helping MEBA officials and representatives coerce vessel officers in the
Interlake fleet of self-unloading Great Lakes bulk carriers into MEBA
membership.

Interlake sued in the Northern District, arguing that Ray had exceeded
his authority under the AMO-Interlake agreement and asking the court to
vacate the damage awards. AMO countered with a motion for summary
judgment sustaining the penalties.

In his July 5 decision in the case brought by Interlake, Judge Carr
denied the company's request and granted AMO's motion. "Both of the
arbitrator's awards are valid," Judge Carr wrote. "He was within his
authority to determine that substantial back pay and attorneys' fees
were proper remedies under the (AMO-Interlake) agreement. This court,
accordingly, will not disturb that determination."

Judge Carr noted that, in the court case, Interlake had challenged "only
the arbitrator's specific remedies, not the underlying merits of his
decision."

He said the courts defer generally to arbitrators in such disputes.
Damage awards are vacated rarely because arbitrators almost always rely
exclusively on contract language that both parties had agreed to.

In the Interlake-AMO case, there was "no question" that the arbitrator's
understanding of the "remedies" clause in the AMO-Interlake Steamship
Co. collective bargaining agreement "was legally plausible."

The AMO-Interlake-MEBA dispute arose as AMO attempted to negotiate a
successor to the three-year collective bargaining agreement that expired
at midnight on July 31, 2003. AMO and the company had met several times
on the issue in 2002 and 2003.

Meanwhile, AMO reached new agreements with two other U.S.-flagged Great
Lakes bulk vessel operators, but Interlake did not want to accept the
uniform economic terms of those agreements and held out for concessions
from AMO.

In May 2003, AMO -- acting in compliance with the AMO-Interlake
agreement -- notified the company that the existing agreement would
expire as scheduled at midnight on July 31 and proposed additional talks
possibly leading to a successor agreement.

At the time, Interlake executives were meeting secretly with MEBA
officials, discussing a possible Interlake-MEBA contract to replace the
AMO-Interlake agreement. Testimony provided during the arbitration
confirmed that Jerome E. "Jerry" Joseph, a former AMO national executive
vice president, had arranged the surreptitious talks between Interlake
and MEBA. Joseph, who had been defeated in his bid for the AMO
presidency in the AMO election of officers in 2001, became a paid
consultant to MEBA in April 2002.

On July 25, 2003, Interlake executives and MEBA officials and
representatives gathered at the home of Interlake Chairman James Barker
in Michigan, where Interlake Vice President Bob Dorn and MEBA President
Ron Davis signed the 10-year contract that has since been characterized
by AMO as "collusive" and "cut-rate." The contract was signed without
the knowledge of the AMO members working as vessel officers in the
Interlake fleet.

In the week that followed the signing of the Interlake-MEBA contract,
Interlake executives and MEBA officials and representatives -- including
Joseph, the former AMO official -- boarded the company's seven active
vessels, which had clustered on company orders at the remote anchorage
of DeTour off the coast of Michigan's Upper Peninsula.

Aboard the vessels, the Interlake executives and MEBA officials and
representatives announced the Interlake-MEBA contract to the engineers
and mates, who were told they would have to join MEBA by Aug. 1, 2003 --
the effective date of the Interlake-MEBA contract -- or leave the
vessels and lose their jobs. The fleet's stewards, who had been covered
by the AMO-Interlake collective bargaining agreement, were told that had
been left out of the MEBA bargaining unit -- as were the fleet's
captains, who had been covered for benefit purposes by the AMO-Interlake
agreement. The Interlake engineers and mates were denied a vote for
representation by MEBA and were not allowed to vote to ratify or reject
the Interlake-MEBA contract.

On July 28, 2003, AMO filed a class action grievance on behalf of the
Interlake engineers and mates who had left the vessels rather than
accept MEBA membership and what one AMO member called the "drastically
inferior" economic terms of the Interlake-MEBA contract.

Interlake refused arbitration of some issues in the dispute. But Judge
Carr, responding to a motion by AMO, ordered the company to "participate
forthwith in arbitration of all issues" raised by AMO in its class
action grievance.

In his May 2005 decision in the case, Ray concluded that Interlake had
failed to recognize AMO as the exclusive bargaining representative of
the Interlake vessel officers as required in Article I, Section 2 of the
AMO-Interlake agreement.

"The arbitrator finds ... that the terms 'recognizes' and 'exclusive
bargaining agency' in Article 1, Section 2 are violated where, during
the term of the agreement, the employer engages in bargaining with
another labor organization concerning rates of pay and terms and
conditions of employment for covered officers," Ray wrote.

Ray said Interlake "did compel" the fleet's engineers and mates into
MEBA membership "as a condition of keeping their jobs." He added; "By
breaching its promise of exclusive recognition during the term of the
(AMO-Interlake) agreement, by bringing representatives of a rival union
on board employer vessels, and by allowing such rival to distribute AMO
resignation forms and under apparent sponsorship of the company during
the term of the (AMO-Interlake) agreement, the employer interfered with
the right of covered officers to continue to be members of AMO."

Editor's Note: The three-year AMO-Interlake collective bargaining
agreement and the 10-year Interlake-MEBA contract are available to all
AMO members for independent review and comparison. Interested AMO
members are asked to contact AMO at its Great Lakes base in Toledo.