An Implied Covenant

Updated: Jul 27


On Wednesday the world’s largest paint maker Sherwin-Williams, will announce their earnings for the second quarter of the 2022 fiscal year.


The collection of stock analysts and paint geeks who watch web cast not expecting any surprises from the Cleveland-based paint maker, with “THE street” anticipating sales gains in the 11% range.


With much of that revenue growth coming from inflation in the price of paint.

Can You Get It Online?


In September of 2021, while struggling to manufacture enough paint to meet demand, Sherwin-Williams chief executive John Morikis pledged to increase the company’s production capabilities by more than 50,000,000 gallons per-year.


Morikis promising investors he’d accomplish the task within the next two fiscal quarters, making it likely that additional capacity is making Pro-Mar as you read.


Who wants to break the news to #DanCalkins that Sherwin-Williams is going to want their rezi-repainters back?


Strike, Three?


While speaking about a strike at the Sherwin-Williams coil plant in Bowling Green, Kentucky, the second work stoppage the Ohio paint manufacturer has faced this year, a spokesperson for the company, Julie S. Young, shared that Sherwin was engaged in “good faith bargaining” and “remains committed to reaching a satisfactory agreement for both parties.”


Though recent actions taken by the paint making giant call into question the company’s sincerity when they empowered Ms. Young to deliver those words.


On June 7th, the company announced that they were cutting the medical, dental, vision, life, and disability insurances of members of the striking members of Teamsters Local 783.


The cancellation of benefits, THE letter would go on to say, would be retroactive.


The move inciting the Teamsters to file a retaliation claim with the National labor Relations Board alleging unfair labor practices against the Cleveland paint maker.


The second such allegation the company has faced this year!


Jacob Boone, a five-year employee of Sherwin-Williams, found out his medical coverage had been dropped while in the emergency room of his local hospital. The quality control technician had punctured his hand while operating a drill at home.


The bill from the ER conspiring with a Covid outbreak afflicting his family of four, the Boone's are now on Medicaid.


Sherwin-Williams abandoning responsibility, leaves the Commonwealth of Kentucky to foot their bills!


You Gotta Have Faith


It will be up to Sherwin-Williams and their employees to work out the details of the union’s employment. Salary, benefits and work rules will always make for complicated conversations.


But no matter details or the status of negotiations between Sherwin-Williams and their employees, a doctrine of fairness should inform all of the company’s actions while negotiating to return the union to work.


By taking away their employees healthcare, Sherwin-Williams has violated that doctrine.


THE Law


In contract law “good faith” is a term of art. It’s meaning rooted in the implied covenant of “good faith and fair dealing” which all contracts are said to contain.


A 1933 Court of Appeals going further adding that the implied covenant of good faith means “neither party shall do anything, which will have the effect of destroying or injuring the right of the other party, to receive the fruits of the contract.”


By denying their workers access to the healthcare which their current contract provides, Sherwin-Williams fails to meet the standard of negotiating in good faith.


Their hands so tight around the throats of their employees I wonder if Sherwin-Williams is negotiating at all?