Court throws out Goodyear Amiens lawsuit

The lawsuit brought against Goodyear Tire & Rubber by the Works Council at the company’s Amiens Nord factory in France and the factory’s union representative, Michael Wamen, has been dismissed by the United States District Court in Ohio. Referring to a host of precedent cases, Judge Sara Lioi determined that Goodyear neither breached agreements made with the Amiens plant workers nor did it fraudulently represent reductions in plant output as temporary measures.

The plaintiffs sought damages for income they felt entitled to under a bonus agreement between the Works Council and the tyre maker’s 75 per cent-owned French subsidiary, Goodyear Dunlop Tire France SA (Goodyear Tire & Rubber itself is not a party to this agreement). The agreement was signed in 1995 and entitles Amiens Nord factory employees to a quarterly bonus based upon the tonnage of tyres produced in the plant. According to the plaintiffs, this quarterly bonus diminished in line with decreases in output that were directed by Goodyear Tire & Rubber.

In dismissing the claim that Goodyear Tire & Rubber breached an express contract made between Goodyear Dunlop Tires France and the Works Council, Lioi noted that the agreement “does not guarantee any particular level of production, nor does it prohibit the downsizing of production.” She continued by observing that the agreement “does not even ensure that the plant will remain open for any period of time.” This point was acknowledged by the plaintiffs, and Lioi added that the Works Council “could have bargained for certain guaranteed levels of production but chose not to do so.” Regarding the allegation that decreases in output were fraudulently represented, the court agreed with Goodyear’s suggestion that the “plaintiffs’ fraud claims are fundamentally deficient because they lack any justifiable reliance.”

Case background

The United States District Court document of 15 January provides a history of Wamen and the Works Council’s grievances. The issue began on 26 May 2009, the day Goodyear Tire & Rubber announced it was considering the divestiture of its agricultural tyre business in Amiens Nord. That same day, Goodyear Dunlop Tire France announced at a Works Council meeting that Goodyear Tire & Rubber was contemplating the discontinuation of consumer tyre production in Amiens Nord along with the sale of its agricultural tyre division. Therefore, Wamen and the Works Council argue that Goodyear always intended to discontinue all tyre production at the factory as part of a concealed plan “to eliminate the jobs of French workers and to shift manufacturing to countries whose workers received lower pay and much less job protection.”

On 23 September 2009, Goodyear Tire & Rubber forwarded the Works Council a letter of intent from Titan Tire Corporation that expressed an intention to acquire the Amiens Nord agricultural tyre business. The plaintiffs allege they were led to believe that a necessary condition for the deal was the elimination of jobs within the Amiens Nord consumer tyre unit, and the put option agreement that Goodyear and Titan entered into on 13 December 2010 required Goodyear France to do just that. Believing that Titan intended to purchase the plant and continue some operations there, the Works Council, on behalf of the Amiens Nord workforce, entered into severance negotiations for the consumer tyre unit employees.

Behind the scenes, Goodyear Tire & Rubber purportedly began to instruct Goodyear France to drastically reduce the number of tyres produced in Amiens Nord. Goodyear repeatedly denied it was shifting tyre production to other facilities in Europe, and insisted that the production decreases were temporary and solely intended to facilitate the sale of the factory to Titan. Wamen and the Works Council allege that in 2009 alone, approximately 2 million fewer tyres were produced. In all, between 2009 and the filing of the amended lawsuit, the plaintiffs allege that production fell by 2,800,000 tyres.

The plaintiffs believe the announced sale to Titan was a ruse. While tyre production in Amiens Nord was steadily decreasing, they allege that the number of consumer tyres produced by Goodyear’s subsidiaries in other parts of Europe “increased significantly.” Their lawsuit pointed to Titan’s abrupt cessation of negotiations with the Works Council in February 2013 as further evidence that Titan “never had real intentions to maintain operations in the Amiens North Factory.”

The Works Council sought to spur on the restructuring activity by filing an action in the French courts. On 28 August 2009, the President of the Civil Court of Naterre found that Goodyear France had violated its duties under the French Labour Code to disclose and consult with employee representatives before engaging in any restructuring activity at the Amiens Nord Factory. The order, which was affirmed on appeal, had the effect of declaring Goodyear France’s efforts to restructure the plant and its workforce unlawful. The Works Council filed two additional actions with the French courts. Each action resulted in an order requiring Goodyear and Goodyear France to provide the Works Council with additional information relative to the restructuring.

In spite of these court pronouncements, Goodyear France continued, at Goodyear Tire & Rubber’s direction, to decrease tyre production in 2010 and beyond without informing the plaintiffs of its intention to restructure, purportedly in violation of French law. On 31 January 2013, Goodyear announced that all tyre production at the Amiens Nord Factory would eventually cease entirely.

The plaintiffs allege that Goodyear Tire & Rubber breached the bonus agreement by directing Goodyear France to steadily decrease tyre production, leading for a substantial drop in quarterly bonus payment for plant workers. The decline in revenue at the Amiens Nord factory brought about by lower production levels also had the effect of reducing the amount of revenue the Works Council received for representing the plant employees. The plaintiffs therefore filed a lawsuit with the Summit County Court of Common Pleas in Ohio on 9 April 2013, and Goodyear immediately moved the action to the United States District Court. The plaintiffs filed an amended complaint on 6 June 2013.