610 F.

2d 1018
102 L.R.R.M. (BNA) 2759, 87 Lab.Cas. P 11,652

UFI RAZOR BLADES, INC., Plaintiff-Appellant,

v.
DISTRICT 65, WHOLESALE, RETAIL, OFFICE AND
PROCESSING UNION,
Affiliated With the Distributive Workers of
America, Defendant-Appellee.
No. 304, Docket 79-7511.

United States Court of Appeals,

Second Circuit.
Argued Sept. 19, 1979.
Decided Oct. 30, 1979.

Joel C. Balsam, New York City (Cahill, Gordon, & Reindel, Loretta A.
Preska, Joseph I. Loonan, New York City, of counsel), for plaintiffappellant.
Eugene G. Eisner, New York City (Eisner, Levy, Steel & Bellman, New
York City, of counsel), for defendant-appellee.
Before WATERMAN, FEINBERG and TIMBERS, Circuit Judges.
FEINBERG, Circuit Judge:

UFI Razor Blades, Inc. appeals from an order of the United States District
Court for the Southern District of New York, Mary Johnson Lowe, J., that
found UFI in contempt of a prior order of the district court, imposed a coercive
fine upon UFI of $1,000 for each day it remains in violation of that order, and
required UFI to post a bond of $300,000. UFI claims that it is not in contempt
of the court's earlier order and that the coercive fine was inappropriate. For
reasons given below, we are compelled to reverse the finding of contempt and
with it the coercive fine, but we do not disturb the requirement of a bond. We
remand to the district court for further proceedings in accordance with this
opinion.

* This is the second appeal before us growing out of a labor dispute between
UFI and District 65, Wholesale, Retail, Office and Processing Union, Affiliated
with the Distributive Workers of America, which for some time has represented
the employees at UFI's plant in New York City. The current collective
bargaining agreement expires in April 1980. Until recently UFI manufactured
various types of razor blades in New York City, reaching a peak complement in
1976 of 130-140 employees working in three shifts. UFI was acquired in that
year by Wilkinson Sword, Inc.,1 and not long thereafter production at the New
York plant began to fall off. This was apparently due, at least in part, to the
foreign production by Wilkinson in England of some blades for UFI accounts.
In February 1978, the company advised the union that it would discontinue
"some of the operation" at the New York plant, and in March the company
made clear that it intended, among other things, to

3
Discontinue
double edged and Twin II blade processing (manufacture) in the United
States and source these products from Wilkinson's operations in England.
4

The union immediately protested the contemplated layoffs such a move would
produce, claiming principally a violation of the provision in the labor
agreement prohibiting subcontracting. The company responded that

.5. . we do not regard the sourcing of blades from England as subcontracting, as they
are produced within the company . . . (T)he labor agreement expressly permits the
company to source this product with its foreign operations . . . the company has
chosen to cease U.S. production of double edge and twin blades because the
machinery in the U.S. is worn. . . .
6

The dispute was then submitted to arbitration, in accordance with the labor
contract. After hearing the evidence from the parties, the arbitrator in June 1978
ruled for the union in an 11-page opinion, which noted that:

The circumstances of this matter clearly establish that manufacturing

previously performed by bargaining unit employees has been sublet to
Wilkinson's plants in England, or perhaps elsewhere, but in any event, well
outside the contract's thirty-five mile "no moving" limitation.

It is equally clear that the importation of Twin II blades brought on a series of

layoffs of employees who previously had been manufacturing the same blades.

The arbitrator's award provided as follows:

The Employer violated Articles 7 (NO MOVING) and 8 (SUB-CONTRACTING) of

10

the collective bargaining agreement.

11 Employer is directed to cease and desist from violating Articles 7 and 8 of the
The
contract.
12 Employer is directed to reinstate to their jobs those employees who were layed
The
off subsequent to the purchase of UFI Industries Razor Blades, Inc. by Wilkinson
Sword, Inc., and to reimburse each of them for the wages lost by them because of
the wrongful layoffs under the contract.
13 the event the parties can not agree on the payments due and owing by the
In
Employer and to whom those payments are forthcoming under this Award, the
undersigned arbitrator shall retain jurisdiction of this matter in order to hear and
determine only those issues.
14

The company then moved to vacate the arbitration award, and the union moved
to confirm it. In a Memorandum Opinion, dated September 21, 1978, Judge
Lowe denied the company's motion and granted the union's. On the same day,
the judge issued an order that confirmed the award "in all respects," stated that
the company had violated the labor contract, and included in its decretal
paragraphs the following:

15

. . . UFI Razor Blades, Inc., is directed to cease and desist from contracting out
manufacturing work in violation of Articles 7 and 8 (the No Moving and SubContracting clauses) of the collective bargaining agreement between the
parties, and . . .

16

. . . UFI Razor Blades, Inc. . . . is hereby directed to reinstate to their jobs those
employees who were laid off subsequent to the purchase of UFI Industries
Razor Blades, Inc. by Wilkinson Sword, Inc., and to reimburse each of them for
the wages lost by them because of the wrongful layoffs under the contract, and .
..

17

. . . UFI Razor Blades, Inc. is hereby barred from discharging or laying off any
further employees due to Petitioner's violations of Articles 7 and 8 of the
collective bargaining agreement, and . . .

18

. . . UFI Razor Blades, Inc. is directed to cease and desist from any activities in
violation of said award and, . . .

19

. . . in the event the parties cannot agree on the payments due and owing by the

petitioner UFI Razor Blades, Inc. pursuant to the Award to those employees
who were laid off subsequent to the purchase of UFI Industries Razor Blades,
Inc. by Wilkinson Sword, Inc., this matter shall be remitted to (the) Arbitrator .
. . in order to hear and determine that issue. . . .
20

This September 21, 1978 order (hereinafter "the September 21 order") was the
subject of the company's first appeal to this court. In February 1979, a panel
summarily affirmed the judgment of the district court "on the opinion of Judge
Lowe." In April 1979, after a fruitless exchange of letters and a meeting
between union and company representatives, the union moved in the district
court for an order holding the company in contempt of the September 21 order.
Judge Lowe, with the approval of the parties, referred the motion to the
arbitrator as a Special Master to hear and report whether the company had
complied with that order. The Special Master heard testimony and issued a
report, dated May 23, 1979, in which he found that the remedies required by the
September 21, 1978 order "have been ignored" and that the order was not
complied with "in any respect."

21

After hearing argument on the Special Master's report, Judge Lowe issued an
order dated July 18, 1979, finding the company in contempt. By a subsequent
memorandum opinion and order dated July 25, 1979, Judge Lowe fined the
company $1,000 for each day it "remains in violation" of any provision of the
September 21 order and directed it to post a bond in the amount of $300,000 "to
facilitate the collection of any monetary award subsequently imposed." This
appeal followed, and on July 30, 1979, a single member of this court stayed that
portion of the contempt order imposing the $1,000 per day fine. Thereafter, a
full panel vacated the stay, but expedited the appeal.

II
22

On this second appeal to us, the company claims initially that it is not in
contempt of either the prohibitory or affirmative provisions of the September
21 order. Thus, with regard to the provisions that prohibit violations of the "no
moving" and "sub-contracting" articles of the collective bargaining agreement,
the company asserts that it has at no time following September 21, 1978
subcontracted out or moved work, discharged workers as a result of
subcontracting or moving, or engaged in any other activity in violation of the
award. Similarly, with regard to the provisions of the order requiring
reinstatement and back pay for workers wrongfully laid off, the company
contends that the failure adequately to identify the workers to be reinstated, and
to liquidate the sums to be paid, creates an ambiguity that prevents a finding of
contempt; in addition, the company argues that there is no work for the

employees laid off, and thus the company cannot be in contempt for failing to
reinstate them. The union responds that the September 21 order implicitly
required the company to resume the discontinued production of razors in New
York, that no formal offer of reinstatement has been made, and that the
company had a duty to seek a clarification if it found the September 21 order
ambiguous. In short, the union takes the position that the company has not
made the slightest effort to comply with the award.
23

The issues raised by this appeal cut across not only the law of civil contempt,
but also a seldom explored area of labor law. In analyzing this case, it is
essential to keep in mind the distinction between the company's contractual
obligations prior to September 21, 1978, and those obligations subsequently
imposed upon it by the September 21 order. It is clear that the company
violated its contract with the union in 1977 and early 1978. During that period,
the company cut back on, and finally ceased, the manufacture of certain types
of razor blades in New York City and had such work done elsewhere, thereby
causing the layoff of a number of employees. Although the company claimed to
have the right to take this action, the arbitrator found the company's position
incorrect in light of the "no moving" and "sub-contracting" articles of the
collective bargaining agreement. The arbitrator's finding was confirmed by the
district court and by this court on appeal. There can be no claim now that those
contractual promises were invalid or inoperative or that they were not breached.

24

But establishing a contract violation prior to September 21, 1978 does not
decide the principal issue on this appeal, which is whether the company
subsequently violated the court's order of that date. The company's argument
that no violation occurred after that time is really twofold. First, the company
asserts that it failed to resume production and reinstate workers not because it is
doing the New York work elsewhere, but because by September 21 economic
conditions and business considerations were such that the New York employees
would have been laid off in the ordinary course of business. Second, while
apparently conceding that some of the work at the New York plant would have
continued for a short indeterminate period beyond the early months of 1978 had
there been no subcontracting, the company argues that it cannot be held in
contempt for failure to make back payments until there has been a
determination of which employees would have done that work and for how
long. Because the Special Master and the district judge did not focus with
precision on these arguments, the record is inadequate in several respects. We
therefore reluctantly reverse and remand for further proceedings.

25

To illustrate why this record is incomplete, it is helpful to examine the

procedures followed by the National Labor Relations Board in the analogous

context of an unfair labor practice proceeding. Where there has been a

subcontracting violation, the Board may order resumption of the discontinued
operations along with reinstatement with back pay, so long as the order will not
impose an undue or unfair burden on the company. See Fibreboard Paper
Products Corp. v. NLRB, 379 U.S. 203, 215-17, 85 S.Ct. 398, 13 L.Ed.2d 233
(1964). Cases drawn from the NLRB context indicate, however, that restoration
of production will not be required when it would be too financially burdensome
for the employer. See, e. g., NLRB v. Townhouse TV & Appliances, Inc., 531
F.2d 826, 831-32 (7th Cir. 1976) (requiring bargaining with union and
reimbursement of lost wages, but refusing to require reestablishment of
operations or reinstatement where employer subcontracted for business reasons
as well as antiunion considerations); See also Section of Labor Relations Law,
ABA, The Developing Labor Law 272 (Supp.1977). Similarly, an employer
will not be required to reinstate workers if their jobs no longer exist. See, e. g.,
NLRB v. Kostilnik, 405 F.2d 733, 735 (3d Cir. 1969); NLRB v. Vail Mfg. Co.,
158 F.2d 664, 667 (7th Cir.), Cert. denied, 331 U.S. 835, 67 S.Ct. 1517, 91
L.Ed. 1848 (1947), Cert. denied, 334 U.S. 845, 68 S.Ct. 1514, 92 L.Ed. 1769
(1948); State Wide Painting & Decorating Co., Inc., 70 LRRM 1095 (NLRB
1969). While several cases suggest that a court of appeals may enforce a
reinstatement decree despite the employer's assertions that the jobs no longer
exist, these holdings are premised on the assumption that the employer will
have a later opportunity to prove to the Board that reinstatement is no longer
possible. See, e. g., NLRB v. Bell Co., Inc., 561 F.2d 1264, 1266 n.2 (7th Cir.
1977); NLRB v. Kostilnik, supra, 405 F.2d at 735; Cf. Southport Petroleum
Co. v. NLRB, 315 U.S. 100, 106, 62 S.Ct. 452, 86 L.Ed. 718 (1942); NLRB v.
Family Heritage Home-Beaver Dam, Inc., 491 F.2d 347, 351 & n.5 (7th Cir.
1974).
26

The Board's procedures also shed some light on the specificity required of an
underlying order before a finding of contempt may be made. It is the practice
of the Board not to fix the amount of back pay that will be required of an
employer who has wrongfully laid off employees until a court first has enforced
a Board order that directs reimbursement in general terms. See Dayton Tire &
Rubber Co. v. NLRB, 591 F.2d 566, 571-72 (10th Cir. 1979); NLRB v. Nickey
Chevrolet Sales, Inc., 493 F.2d 103 (7th Cir.), Cert. denied, 419 U.S. 834, 95
S.Ct. 60, 42 L.Ed.2d 60 (1974). Recognizing that efficiency is served by this
two-stage process, courts have not questioned its propriety. See NLRB v.
Deena Artware, Inc., 361 U.S. 398, 411, 80 S.Ct. 441, 4 L.Ed.2d 400 (1960)
(Frankfurter, J., concurring). In an early opinion, however, this court suggested
that one of the consequences of the Board's two-stage proceedings was that an
employer cannot be held in contempt for failure to make payments under an
order requiring back pay until the amount of back pay has been fixed. NLRB v.

New York Merchandise Co., 134 F.2d 949, 952 (2d Cir. 1943) (L. Hand, J.).2
27

We see no reason not to apply these doctrines in the area of labor arbitration.
An arbitrator, like the NLRB, may order resumption of operations and
reinstatement with back pay as remedies for subcontracting violations. See
United Electrical Radio & Machine Workers of America v. Honeywell, Inc.,
522 F.2d 1221, 1226-27 (7th Cir. 1975) (citing authorities). In Selb Mfg. v.
IAM, District No. 9, 305 F.2d 177 (8th Cir. 1962), for instance, the court of
appeals affirmed a district court order that enforced an arbitration award
interpreting a "sub-contract" clause similar to the one in question here. The
arbitration award required the employer to return to St. Louis the work and
equipment that it had transferred to plants in Arkansas and Colorado and to
reinstate, without loss of pay or seniority, all of the St. Louis employees laid off
after a certain date.3 But, as in the NLRB context, an employer should not be
foreclosed from showing that compliance with a resumption or reinstatement
order is no longer possible because of changed economic circumstances.
Similarly, we believe that an arbitration award, like a Board order, must state
with specificity both the employees to be reinstated and the amount of back pay
owed before an employer may be held in contempt for failure to reinstate
employees or to make back payments to them.

28

Turning from these labor law decisions to the law of contempt, it is common
ground that courts must be careful in employing that sanction because the
"judicial contempt power is a potent weapon." See Int'l Longshoremen's Ass'n,
Local 1291 v. Philadelphia Marine Trade Ass'n, 389 U.S. 64, 76, 88 S.Ct. 201,
208, 19 L.Ed.2d 236 (1967). Thus, several recent cases have held that contempt
cannot issue unless the underlying decree requires the alleged contemnor to pay
a specific sum. See Lichtenstein v. Lichtenstein, 425 F.2d 1111 (3d Cir. 1970)
(failure to pay deficiency; order merely provided means of determining
liability); Baumrin v. Cournoyer, 448 F.Supp. 225 (D.Mass.1978) (same).
These cases reflect the general proposition that an order of contempt cannot
issue unless the order claimed to be violated is specific and definite. See, e. g.,
In re Rubin, 378 F.2d 104, 108-09 (3d Cir. 1967).

29

With these principles in mind, we now consider the issue whether the company
was properly held in contempt of the September 21 order of the district court.
That order directed the company to reinstate employees who had been laid off
after Wilkinson took control of the New York operation and to reimburse them
for wages lost "because of the wrongful layoff under the contract."4 The
number and identity of these employees is not clear in the record before us.
There is apparently a dispute between the parties as to how many employees
were so affected, and there is unquestionably a dispute over how long work

would have continued for these employees; in fact, in a letter dated March 14,
1979, the union itself suggested that it would be prepared to meet with the
company to discuss which employees should be reinstated and the amount of
money due them. Neither the arbitrator's award in June 1978 nor the subsequent
September 21 order specifically identifies the employees to be reinstated or the
amount of money due them; indeed, both the award and the order specifically
provided that the issue of back pay should be remitted to the arbitrator if the
parties were unable to agree as to the payments due and owing. Moreover, the
subsequent proceeding before the arbitrator sitting as a Special Master, which
should be likened to a second-stage compliance hearing before the NLRB, still
did not resolve these questions.
30

The union argues that in any event the company is surely in contempt of the
order because after September 21 it did not resume blade production in New
York. While the order does not directly compel resumption of work, we think
that is a fair reading of the order and we would not cavil at the contempt
finding were that the only question. But the true issues relate to what work
should have been resumed in New York City after September 21 and whether
that work was at that time being done elsewhere instead. The arbitrator, as
Special Master, apparently assumed that the company was required to resume
production of blades in New York simply because after September 21
Wilkinson produced them elsewhere. This is not so. The September 21 order
required the company to transfer back to UFI's New York facility any Twin II
and double edge razor blade production work that previously had been
performed there and was at that time being performed elsewhere in the
Wilkinson corporate group; the company, however, was not under an obligation
to transfer to the New York facility any work that had been done elsewhere in
the Wilkinson corporate group before the labor dispute arose and had never
been done at the New York facility. The proceedings before the Special Master
apparently did not focus with the necessary precision on these issues, i. e.,
exactly which Twin II and double edge razor blade production work had been
transferred out of the New York facility to be performed elsewhere in the
Wilkinson corporate group, and, both for purposes of fixing contract damages
and determining whether the company was in contempt of the September 21
order, the precise duration of this prohibited transfer of work. Undoubtedly for
this reason, in the contempt proceeding the Master and subsequently the district
court made no specific finding that the company after September 21, 1978 did
Twin II and double edge razor blade production work elsewhere in the
Wilkinson corporate group that earlier had been transferred from the New York
facility.

31

Thus, we are reluctantly compelled to reverse the order finding appellant in

contempt and imposing a prospective fine, and to remand for further

development of the record and further findings. Our reluctance stems from the
impression that the Special Master and the district court correctly divined the
company's true intentions. But impressions or vague feelings cannot substitute
for evidence and specific findings based upon them. We do not know what the
outcome of further proceedings will be, but our concern is lessened by the
presence of a bond of $300,000, which the district judge sensibly required when
she was informed that the company was preparing to dismantle its New York
plant. In view of what has transpired thus far, we see no reason to reverse that
portion of the order. If the company does have to pay a sizeable sum of money
to reimburse those who have been improperly laid off as a result of contract
violations at least for the period up to termination of the labor contract in April
1980 the employees involved will have some security for satisfaction of that
obligation. Indeed, nothing in this opinion is meant to preclude the district court
from requiring a bond in an even larger amount, if the evidence before it after
remand justifies that course.5
32

Order reversed in part and case remanded for further proceedings consistent
with this opinion.

From its acquisition in May 1976 until its liquidation on March 31, 1979, UFI
was operated as a wholly-owned subsidiary of Wilkinson Sword, Inc., which
was itself a wholly-owned subsidiary of Wilkinson Match (USA), Inc. The
latter entity in turn was wholly owned by various interrelated British
corporations. Effective March 31, 1979, UFI was liquidated and its assets
transferred to Wilkinson Sword, Inc., which now stands as successor in interest
to UFI in this proceeding. Hereinafter, we shall frequently use "company" to
refer to UFI or, with regard to the period after March 31, 1979, to its successor
in interest, Wilkinson Sword, Inc

We recognize that Justice Frankfurter disapproved of New York Merchandise

to the extent that it was inconsistent with the principles announced in his
concurrence in NLRB v. Deena Artware, supra, 361 U.S. at 410 n.2, 80 S.Ct.
441. In Deena Artware, the Board sought a civil contempt citation against an
employer that allegedly conveyed its assets to a related corporation so as to
frustrate an earlier court-enforced Board order requiring reinstatement with
back pay of certain named employees. The circuit court held that its
enforcement order, which left unliquidated the amount of back pay to which
employees would be entitled, was too indefinite to serve as the basis for
contempt, See NLRB v. Deena Artware, 261 F.2d 503, 510 (6th Cir. 1958); a
majority of the Supreme Court reversed on other grounds. In contrast, Justice

Frankfurter, in a concurrence joined by Justice Harlan, would have reversed on

the ground that the employer could be held in contempt for conduct solely
designed to defeat a subsequent order liquidating the back-pay obligation. See
NLRB v. Deena Artware, supra, 361 U.S. at 412, 80 S.Ct. 441. As Justice
Frankfurter noted, id. at 410 n.2, 80 S.Ct. 441, the question presented in Deena
Artware was not before this court in New York Merchandise. While we believe
that the latter case is still valid authority for the proposition for which it is cited
in text, our opinion should not be read to suggest that an employer is immune
from contempt proceedings if he actively seeks to frustrate e. g., by transferring
assets later implementation of an existing court order requiring payment of an
unliquidated amount of back pay. See L. Jaffe, Judicial Control of
Administrative Action 303 (1965)
3

The later case history of Selb indicates that there was a monetary settlement
rather than actual resumption of production in St. Louis. See Layton v. Selb
Mfg. Co., 359 F.2d 715 (8th Cir.), Cert. denied, 385 U.S. 929, 87 S.Ct. 288, 17
L.Ed.2d 211 (1966)

Although the September 21 order might be construed to direct the company to

reinstate and reimburse all "employees who were laid off subsequent to the
purchase of UFI Industries Razor Blades, Inc., by Wilkinson Sword, Inc.," we
believe that the arbitrator and the district judge intended to require the
reinstatement only of employees wrongfully laid off after that date because of
the company's violation of the labor contract

Since we reverse the finding of contempt, we need not consider appellant's

arguments concerning the propriety of the coercive fine, which falls with the
contempt finding