52 F.3d 623 (7th Cir. 1995), 94-1762, Chaney v. Suburban Bus Div. of Regional Transp. Authority

Docket Nº:94-1762.
Citation:52 F.3d 623
Party Name:Eton CHANEY and Amalgamated Transit Union, Local 1028, AFL-CIO, Plaintiffs-Appellants, v. SUBURBAN BUS DIVISION OF the REGIONAL TRANSPORTATION AUTHORITY, d/b/a Pace Northwest Division, and Brett Burkhardt, Regional Manager, Defendants-Appellees.
Case Date:April 06, 1995
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 623

52 F.3d 623 (7th Cir. 1995)

Eton CHANEY and Amalgamated Transit Union, Local 1028,

AFL-CIO, Plaintiffs-Appellants,

v.

SUBURBAN BUS DIVISION OF the REGIONAL TRANSPORTATION

AUTHORITY, d/b/a Pace Northwest Division, and

Brett Burkhardt, Regional Manager,

Defendants-Appellees.

No. 94-1762.

United States Court of Appeals, Seventh Circuit

April 6, 1995

Argued Dec. 2, 1994.

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[Copyrighted Material Omitted]

Page 625

J. Peter Dowd (argued), Robert E. Bloch, Linda Wyetzner, Dowd & Bloch, Chicago, IL, for plaintiffs-appellants.

Michael B. Roche (argued), Jeffrey E. Schiller, Michael F. Braun, Schuyler, Roche & Zwirner, Chicago, IL, for defendants-appellees.

Before FLAUM, GARZA, [*] and ROVNER, Circuit Judges.

FLAUM, Circuit Judge.

Plaintiffs Eton Chaney and the Amalgamated Transit Union, Local 1028, brought suit against Chaney's employer, the Suburban Bus Division of the Regional Transportation Authority, alleging violations of their Fourteenth Amendment due process rights. The plaintiffs alleged that the employer deprived Chaney and other union employees of due process by intentionally misinterpreting and misapplying grievance and arbitration procedures governing employee termination procedures in suspending and firing Chaney. The district court dismissed the suit for failure to state a claim for which relief could be granted.

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We now affirm in part, vacate in part, and remand.

I.

Eton Chaney worked as a part-time driver for the Suburban Division of the Regional Transportation Authority, which operates under the name "Pace." On January 29, 1993, Chaney was involved in an accident at the Jefferson Park Terminal of the Chicago Transit Authority when a bus he was driving hit and seriously injured a pedestrian. Pace immediately began investigating the incident and suspended Chaney without pay pending the results of drug and alcohol tests. Within a few days, test results showed that Chaney had not been under the influence of drugs or alcohol at the time of the test, but Pace nonetheless continued its investigation.

On February 2, 1993, Chaney and representatives from Amalgamated Transit Union, Local 1028, (the "Union") which represents Pace employees at Pace Northwest Division, met with Pace officials to discuss the incident. The officials did not provide Chaney with much information regarding their investigation but did notify him that they were continuing his suspension pending further inquiries into the accident. On February 10, 1993, Pace Regional Manager Brett Burkhardt met with Chaney and Union President John Folan and informed them that Pace had decided to fire Chaney. Burkhardt then gave Chaney a letter of termination stating that Chaney was being discharged because of the accident as well as his entire work history.

A collective bargaining agreement ("CBA") controls relations between Pace and the Union. The CBA permits employees "who consider themselves aggrieved by action of the Company" to file a grievance "within ten business days of the occurrence of the incident or notification to the employee, whichever is longer." All grievances must be initially brought to the attention of the Union representative, and Pace officials are obliged to discuss the grievance. If the grievance procedure does not resolve the problem, the dispute may then be arbitrated according to a process set forth in detail in the CBA.

After his dismissal, Chaney invoked his rights under the CBA's grievance procedure, and his grievance was ultimately arbitrated. On July 30, 1993, after a two-day hearing, an arbitration panel ruled that Chaney had not been dismissed for sufficient cause and ordered him reinstated and "made whole" for all wages and benefits lost due to the termination. Pace reinstated Chaney on August 9, 1993, but refused to award him lost wages or benefits. Pace, relying on its own interpretation of the arbitration, declined to pay Chaney wages or benefits from January 30, 1993, until the date of his reinstatement because Chaney had been a part-time worker without an hourly guarantee. Chaney insisted that his wages and back pay should be assessed based on his average work hours prior to January 30, but Pace would not provide the relevant information to make this calculation. Chaney and the Union also requested Pace to submit this dispute to the arbitration panel, but Pace refused.

Unable to persuade Pace to act, Chaney and the Union filed this suit in federal court. Chaney and the Union alleged that Pace violated 42 U.S.C. Sec. 1983 by stripping post-termination arbitration procedures of any finality. They also alleged that Pace had a policy of providing little or no information to an aggrieved employee during the grievance procedure such that Pace deprived the procedure of necessary elements of due process. Chaney also requested the district court to enforce the arbitration award as per 710 ILCS Sec. 5/11 under its pendant jurisdiction over that state law claim. The district court dismissed the Sec. 1983 action under FED.R.CIV.P. 12(b)(6) for failure to state an injury to anyone's due process rights and, having eliminated the federal claims, dismissed the pendant claim as well. This appeal followed.

II.

We review de novo a motion to dismiss for failure to state a claim under FED.R.CIV.P. 12(b)(6). Hinnen v. Kelly, 992 F.2d 140, 142 (7th Cir.1993). We accept as true the factual allegations of the complaint and draw all reasonable inferences in favor of the plaintiffs. Zinermon v. Burch, 494 U.S. 113, 118, 110 S.Ct. 975, 979, 108 L.Ed.2d 100

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(1990); Dawson v. General Motors Corp., 977 F.2d 369, 372 (7th Cir.1992). We permit dismissal under Rule 12(b)(6) only where "it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).

On appeal, Chaney and the Union assert two basic arguments. First, they contend that the grievance and arbitration procedures notwithstanding, Chaney and other Union members are entitled to a level of due process that Pace refused to provide. Specifically, Chaney and the Union argue that Pace failed to provide its employees with notice and an opportunity to be heard prior to termination, rendered the grievance process meaningless by withholding information about terminations until arbitration, and did not establish standards to guide its managerial employees in making termination decisions. Second, Chaney and the Union also insist that to the extent bargained-for, post-termination grievance and arbitration procedures can meet the requirements of due process, Pace's actions in refusing to comply with the award have deprived those procedures of any substance. Since the procedures as administered by Pace have not provided Chaney with relief, the plaintiffs maintain, the procedures have proven constitutionally inadequate in this case and threaten to do the same for other Union employees in the future.

To state a Sec. 1983 claim, Chaney and the Union must allege that Chaney and other Union members were deprived of a property interest under color of state law without due process. For the purposes of this motion to dismiss, we assume, as did the district court, that Pace acted under color of state law and that the action was the product of a systematic policy and practice. Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). We also assume that Chaney's contractual employment relationship with Pace gave Chaney a property interest in his further employment cognizable under the Fourteenth Amendment and that Chaney was deprived of that interest. Therefore, we focus solely on whether Pace improperly deprived Chaney and Union members of their interests in the matter. 1

The Supreme Court's decision in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), provides the analytical framework for an analysis of whether due process requires that Chaney should have received (and other Union members should receive) additional procedural protections. In Mathews, the Court weighed three factors in determining whether a plaintiff received adequate process:

First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

424 U.S. at 335, 96 S.Ct. at 903. We apply the Mathews analysis to both the pre-deprivation and post-deprivation phases of Chaney's case.

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A.

Due process is a "flexible" concept, Mathews, 424 U.S. at 334, 96 S.Ct. at 902, and in general, "[t]here is no rule that a 'pre-deprivation' hearing is required in every case." Brown v. Brienen, 722 F.2d 360, 365 (7th Cir.1983); id. at 367 (Flaum, J., concurring) ("Where there has been a deprivation of property, merely postponing the hearing does not deny due process if there is an adequate opportunity given for an ultimate determination of liability."). In the employment context, however, once an employee has established the existence of a property interest, the employee ordinarily has the right to notice and a reasonable opportunity to respond prior to termination. Cleveland Bd. of Education v. Loudermill, 470 U.S. 532, 542, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494 (1985); Schultz v. Baumgart, 738 F.2d 231, 235 (7th Cir.1984) (citing cases); see also Cotnoir v. Univ. of Maine Sys., 35 F.3d 6, 12 (1st Cir.1994) ("Where an employee is fired in violation of his due process rights, the availability of post-termination grievance procedures will not ordinarily cure the violation.")...

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