F.W. Woolworth Co. v. Miscellaneous Warehousemen's Union, Local No. 781

Decision Date07 August 1980
Docket NumberNo. 79-1839,79-1839
Citation629 F.2d 1204
Parties104 L.R.R.M. (BNA) 3128, 59 A.L.R.Fed. 711, 89 Lab.Cas. P 12,280 F. W. WOOLWORTH CO., Plaintiff-Appellee, v. MISCELLANEOUS WAREHOUSEMEN'S UNION, LOCAL NO. 781, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Defendant, Appeal of Gerald FELL, Clifford Kendricks and Ernest Turner, Applicants for Intervention.
CourtU.S. Court of Appeals — Seventh Circuit

Harvey A. Nathan, Chicago, Ill., applicants for intervention.

Francis X. Dee, Newark, N.J., for plaintiff-appellee.

Before SWYGERT, BAUER and CUDAHY, Circuit Judges.

CUDAHY, Circuit Judge.

This action arose from the decision of plaintiff, F. W. Woolworth Co. ("Woolworth"), to discharge three of its employees, Gerald Fell, Clifford Kendricks and Ernest Turner. Their discharge was the subject of an arbitration proceeding pursuant to the collective bargaining agreement between Woolworth and the Miscellaneous Warehousemen's Union, Local No. 781, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the "Union"), the labor organization which represented the discharged employees. The arbitrator ordered the reinstatement of Fell, Kendricks and Turner, so Woolworth brought this action in the district court under § 301 of the Labor Management Relations Act of 1947 ("LMRA"), as amended, 29 U.S.C. § 185 (1976), to vacate the arbitrator's award.

The Union appealed and argued in support of the arbitration award in the district court but Woolworth's motion for summary judgment was granted and the award was vacated. The Union did not seek appellate review of the district court's decision so the three employees moved to intervene and filed notice of the instant appeal. The employees did not claim that the Union had breached its duty of fair representation. The district court denied their motion to intervene, as well as Fell's separate motion for reconsideration of the district court's decision.

The issues presented by this appeal are (1) whether the employees may intervene in order to bring this appeal and (2) whether the district court properly vacated the arbitrator's decision. We find that the three individual employees had standing to intervene in order to bring this appeal. We also reverse the district court's order vacating the arbitration award.

Facts

Fell, Kendricks and Turner were employed by Woolworth at its Chicago, Illinois, distribution center where they were represented by the Union. 1 Fell had been employed by Woolworth since 1957, Turner since 1966 and Kendricks since 1975. All three employees were discharged in early 1978 for violation of Rule 10 of Woolworth's rules and regulations. Rule 10 states that

When an employee is absent from work, he shall notify the Company at the earliest possible time, giving reason for such absence, and keep the Company advised daily as to the probable date of return to work. Excessive absenteeism is cause for discharge.

The facts surrounding each discharge may be summarized as follows. On Tuesday, January 24, 1978, Fell telephoned Turner broke his hand on December 19, 1977, and was under a doctor's care with Woolworth's knowledge. Woolworth expected Turner to return to work on February 21, 1978, based upon a previously submitted medical report. When Turner did not return to work on February 21, and did not call in, he was discharged. On February 27, 1978, Turner returned to work and found out he had been discharged. That afternoon Turner submitted a second medical report indicating that he (Turner) would not be able to return to work until March 1, 1978.

Woolworth's personnel manager, Steve Knawa, and informed him that he (Fell) was ill and would not be coming to work. There is some dispute as to whether Fell told Knawa how long he would be absent. Thereafter, Fell did not call in and he was discharged when he reported for work on Monday, January 30, 1978.

Kendricks was on sick leave and was released by Woolworth's physician to return to regular duties on April 17, 1978. Kendricks called in on April 18 and stated that he was under another doctor's care and would bring in a note the next day. Kendricks returned to work on April 24, 1978, with a doctor's note dated April 20 indicating that Kendricks was still under the physician's care. Kendricks was under the impression that his doctor had called on April 19. The records indicated that the doctor did call but only inquired about insurance coverage.

Article X of the collective bargaining agreement between Woolworth and the Union provides that

No employee shall be discharged except for just cause. Violation of any Company rule shall be considered a just cause. Any dispute with respect to justification for a discharge of any employee shall be considered a grievance and subject to the grievance and arbitration machinery provided in this agreement. The term "just cause" shall not be limited solely to violation of Company rules.

The issue presented for arbitration was whether Woolworth had "just cause" for discharging these employees. If the arbitrator determined that Woolworth did not have just cause, he was to order an appropriate remedy.

Although Rule 10 suggests that employees must call in daily when absent from work, the arbitrator found that in practice the requirement was to report every three days, and this finding was uncontested. The arbitrator also found that under certain conditions the three day rule had not been enforced, stating that

As a matter of practice under this Rule, employees who are hospitalized, on Workmen's Compensation, injured in a car accident, on Jury Duty or on funeral leave are not required to call in every three days. Other extenuating circumstances, if they are clear and understandable, may also provide relief from the three days rule.

The arbitrator found that all of the grievants were guilty of a "technical violation" of Rule 10. However he found that, with respect to Rule 10, the "Rule itself does not . . . provide for absolute discharge . . . ." He further found that an employee who fails to report for three days is only "subject to discharge." He also noted that each grievant had a legitimate illness of which Woolworth was aware and that each had called in initially. The arbitrator found that in each case "there was some confusion as to the exact date on which the grievant was to return to work." He differentiated these cases from those in which an employee does not call in at all.

Reviewing all of the facts and evidence, the arbitrator concluded that the violation of Rule 10 was only "technical" and that the just cause standard for discharge provided for in Article X had not been met. The arbitrator directed Woolworth to reinstate Fell, Kendricks and Turner with full backpay except for certain periods of time which would stand as suspensions without pay (30 days for Turner and 90 days for Fell and Kendricks).

Woolworth then brought this action in the district court to vacate the arbitration award and further brought a motion for

summary judgment toward that end. The district court granted Woolworth's motion for summary judgment and vacated the arbitration award because it concluded that since there was a technical violation of Rule 10, Woolworth had the right to impose the penalty of discharge for violation of the Rule. The district court found that the arbitrator had exceeded his authority by ordering a lesser penalty of suspension for the employees' infraction of Rule 10.

Discussion

1. Right to Intervene and Standing to Appeal

When the Union did not file a notice of appeal from the district court's grant of summary judgment, Fell filed a motion to intervene pursuant to Rule 24 of the Federal Rules of Civil Procedure, reciting that the Union was not taking an appeal of the district court's order granting summary judgment and that without such an appeal Fell was foreclosed from challenging the district court's order setting aside the arbitration award. At the same time Fell filed a motion for reconsideration, in which he asserted that he was the real party in interest and that the arbitrator had not exceeded his authority. Subsequently, Turner and Kendricks filed their motion for intervention.

The district court denied the motions for intervention and for reconsideration, finding that the movants lacked standing, citing Acuff v. United Paper Makers and Paper Workers, AFL-CIO, 404 F.2d 169 (5th Cir. 1968), cert. denied, 394 U.S. 987, 89 S.Ct. 1466, 22 L.Ed.2d 762 (1969). Fell, Kendricks and Turner then filed their notice of appeal. The issue presented here is whether under federal substantive labor law and under Rule 24 of the Federal Rules of Civil Procedure, employees have standing to intervene to prosecute an appeal from an order of the district court setting aside an arbitration award in their favor when their union, which has represented them up to that point, declines to take the appeal but does not object to the employees' attempt to intervene and prosecute the appeal.

A. Federal Substantive Labor Law

We agree with Woolworth's contention that principles of federal substantive labor law affect the right of Fell, Kendricks and Turner to intervene in an action concerning the collective bargaining agreement entered into by their Union and Woolworth. We shall discuss these labor law principles before we determine whether the requirements of Rule 24 have been met.

An individual employee may, with significant limitations, bring suit against his employer in federal district court under § 301(a) of the LMRA to resolve a dispute arising under the collective bargaining agreement between his union and his employer. Smith v. Evening News Association, 371 U.S. 195, 200, 83 S.Ct. 267, 270, 9 L.Ed.2d 246 (1962). For example, an employee may maintain such a suit against his employer for wrongful discharge. See Harrison v. Chrysler Corporation, 558 F.2d 1273,...

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