When the men and women on the material handling line at the IBP Inc. slaughterhouse in Dakota City, Neb., scheduled their annual picnic last summer, the company said it would supply the hamburger. But when security guards checked the box as it was being taken out of the plant on its way to the picnic, they discovered that someone had tucked tenderloins and rib-eye steaks under a top layer of chopped meat.

The company was not pleased. An immediate investigation was ordered and several employees on the material handling line were called in for questioning.

After interviewing six or seven employees, company investigators questioned Darrell A. Dolejsi, a United Food and Commercial Workers union shop steward in the plant.

Dolejsi denied having any firsthand knowledge of the situation, but he knew who did. In his capacity as a union representative, he agreed to identify the people who stole the steaks if IBP would give him written assurances that no employees would lose their jobs.

The company response was swift.

IBP, Dolejsi was told, would guarantee nothing. Moreover, the company said, if Dolejsi didn't tell who did it, he would be subject to suspension and discharge.

Dolejsi refused and was suspended. After nearly a week of unsuccessful negotiations with Dolejsi and the union in an effort to get the names of the steak stealers, Dolejsi was fired, setting off a battle between the two sides that could establish more clearly the rights of union representatives in the workplace.

The UFCW filed a grievance against IBP over the firing, claiming the act was illegal because Dolejsi was acting as a union steward and therefore had no obligation to provide information to the company.

The union said that Dolejsi had made it clear from the first time he was interrogated by the company that he had been approached by other employees in his role as union steward and was acting as a union official when he offered to tell who stole the steaks in exchange for a guarantee against dismissal.

Had Dolejsi snitched on his co-workers, the union argued, he might have been in violation of his legal duty to provide fair representation under federal labor law.

IBP saw the situation quite differently. The company argued before an arbitrator that Dolejsi had no "privilege" to withhold information from the company simply because of his union position.

This was particularly true, IBP argued, since the case involved "criminal activity."

In firing Dolejsi, IBP said that his refusal to disclose what he knew amounted to insubordination, and it viewed insubordination about the same way it viewed stealing.

IBP argued that his "continued insubordinate refusal to divulge the names of persons who attempted a crime of theft against their employer and fellow employees" provided proper cause for dismissal.

Arbitrator John M. Gradwohl sided with the union. For starters, he said, "The evidence presented at the arbitration hearing convincingly establishes that Dolejsi was acting as the UFCW representative in refusing to divulge the names of employees who had consulted with him. ... "

While it was perfectly proper for the company to interrogate employees in the department, as well as Dolejsi, about their personal knowledge of the attempted theft, Gradwohl ruled, it was wrong for the company to threaten him with dismissal when they tried to get him to divulge the names of the steak stealers once they knew the information was acquired in his capacity as union steward.

That effort, he said, "had the effect of denying rights of the employees and of the union under the National Labor Relations Act and the ... collective bargaining agreement."

He said that "when the investigation shifted from Dolejsi's personal knowledge to his knowledge properly acquired as a union steward, Dolejsi was engaging in protected activity under the National Labor Relations Act."

Gradwohl ordered Dolejsi reinstated with back pay because the company had "interfered with protected union and employee activities."

In ruling that union officials had what amounted to client-attorney privilege, Gradwohl cited a 1981 U.S. Court of Appeals decision involving the National Labor Relations Board and Cook Paint & Varnish Co., in which the court noted "there are fundamental differences between an interview of an employee and an interview of a shop steward."

In that decision, the court said that "to require collective bargaining representatives to submit to compulsory interviews might seriously infringe on protected activities."

If union stewards can be forced to divulge confidential information through the threat of disciplinary action, the court said, it would have a "chilling effect" on the willingness of other employees to consult with their union.