AK Steel Holding - Middletown Works Lockout

Middletown Works Lockout

Armco and the Armco Employees Independent Federation (AEIF; an employee labor union) had a collective bargaining agreement in place in 2004 that required AK Steel to employ 3,114 workers, a "minimum base force guarantee". The agreement also authorized AK Steel to suspend the minimum number. On January 13, 2004, AK Steel informed the AEIF that it was suspending the minimum. The union then filed a grievance contesting the suspension. An arbitrator upheld the decision by AK Steel on July 1, 2004, subject to certain limitations, through at least May 10, 2005. The union sought and was granted a new hearing, and on July 1, 2005 the arbitrator issued a comprise total workforce. As part of the agreement the arbitrator allowed AK Steel to set aside financial payments to a fund, in lieu of hiring to the minimum, the amount of which was set by the arbitrator on October 7, 2005. On September 29, 2005, the AEIF filed a lawsuit against AK Steel in the United States District Court for the Southern District of Ohio (AEIF v. AK Steel Corp.; Case No. 1:05-CV-639), in which the AEIF sought to vacate that portion of the July 1, 2005 Award. AK Steel answered the complaint and filed counterclaims (AK Steel Corp. v. AEIF, Case No. 1:05-CV-531) on November 2, 2005.

On March 1, 2006, AK Steel began a lockout of around 2700, workers, at their Middletown Works plant, in Middletown, Ohio. By the next day, the mill was operated by 1,800 salaried and temporary replacement workers. In late October, AK offered a "final" contract, which was rejected by the union at a vote of 2 to 1. One year after the lockout started, on February 28, 2007, AK Steel reached a labor deal with the labor union, The lockout was over when the union members ratified the proposed contract on March 14, 2007. This lockout was the longest labor stalemate in the 105-year history of the Middletown Works. The previous longest stalemate was a six-day company lockout in 1986. As part of the agreement the AEIF and AK Steel reached a joint settlement of their five total counter lawsuits, with AK Steel paying $7,702,301. A third of the amount was for profit sharing, a third for an assistance fund for employee benefits of employees not recalled to work, and a third an escrow account to settle employee disputes and claims as a result of the lockout. The Employment Security Plan and the Trade and Craft Quota and Service/Support Group Quota (the "minimum base force guarantees") were completely terminated.