Davis Co. v. United Furniture Workers of America, AFL-CIO
| Citation | 674 F.2d 557 |
| Decision Date | 31 March 1982 |
| Docket Number | AFL-CIO,No. 80-1477,80-1477 |
| Parties | 109 L.R.R.M. (BNA) 3192, 93 Lab.Cas. P 13,391 The DAVIS COMPANY, Plaintiff-Appellee, v. UNITED FURNITURE WORKERS OF AMERICA,; Local 282, United Furniture Workers of America,; and Willie Rudd, Defendants-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
B. J. Wade, Hicks, Gillespie, Mames & Agee, Memphis, Tenn., for defendants-appellants.
Ross B. Clark, II, Laughlin, Halle, Regan, Clark & Gibson, Stephen Goodwin, Memphis, Tenn., for plaintiff-appellee.
Before EDWARDS, Chief Judge, and WEICK * and LIVELY, Circuit Judges.
In this action, brought pursuant to § 301 of the Labor Management Relations Act of 1947 as amended (the Act), 29 U.S.C. § 185 (1976), an employer sought damages from a union and a union official for breach of a collective bargaining agreement. The employer also claimed damages for defamation, asserting pendent state jurisdiction. Following a bench trial, the district court entered judgment for the plaintiff on both claims.
The plaintiff, The Davis Company (the employer), a Tennessee corporation, entered into a three-year collective bargaining agreement with the United Furniture Workers of America, AFL-CIO, Local No. 282 (the union) on September 6, 1977. The agreement covered employees at the Memphis facilities of Davis. The defendant Willie Rudd signed the agreement on behalf of Local 282. He was president of Local 282 and a representative of the international union at all times pertinent to this case. Pursuant to the collective bargaining agreement (the agreement), on June 27, 1978 a group of Davis employees filed a grievance in which they claimed they had not been fully paid for overtime work. Article VI of the agreement provided for overtime as follows An employee will be paid 11/2 times over eight (8) hours in any day worked, provided (a) they are scheduled to work five (5) or more days in the work week and (italics in contract) (b) that employee works all scheduled hours during their work week. There shall be no pyramiding of overtime.
During the second stage of a four-step grievance procedure (which did not provide for arbitration) the employer determined that it had not been paying some employees for overtime work in accordance with Article VI. It was calculating overtime on a weekly rather than a daily basis. The affected employees were promptly reimbursed in accordance with the employer's revised understanding of the agreement. However, the union refused to settle the grievance on this basis and carried the grievance to the third stage where no settlement was reached. Both sides then agreed to waive the fourth step of the grievance procedure, which provided:
If no satisfactory settlement is arrived at within fifteen (15) days between the parties referred to in "c," the matter shall be taken up between a representative of the Union and a representative of the Employer. The parties will meet with each other within seven (7) days of a written request by either party to each other for such a meeting, and shall attempt to arrive at a settlement with a full hearing from all persons who know of the facts involved, both by the Union and the Employer. If no such settlement is arrived at within five (5) days after the meeting, then the Union may strike, and the Employer may lock out the employees.
On August 2, 1978 the defendant Rudd, as president of Local 282, posted a "Special Bulletin" on a bulletin board furnished by the employer pursuant to Article X, section 4 of the agreement, which provided:
The employer shall provide the Union with a bulletin board in the plant which the Union and its members shall have the right to use for the purpose of giving notice of Union activities, such as meetings, special events and other similar matters. The Union agrees that it will not publish or circulate any false or misleading remarks about the Employer, its products, its officers, and other personnel.
The August 2d bulletin, which is reproduced as an appendix to this opinion, called a meeting of all employees for 7:30 p. m. that day to discuss problems at the plant, particularly overtime pay. The bulletin stated, "Based on our interpretation of the contract, we believe this Company has cheated the employees out of thousands of dollars on overtime pay." (Underlining on original bulletin).
At the employees' meeting on the evening of August 2d there were complaints about overtime pay and talk of filing a lawsuit against the employer. Two union stewards testified that they, as well as other employees, felt that they had been cheated. However, there was no talk about a strike, no strike vote was taken and there was no authorization for a strike by the international union (a requirement of the union constitution). Nevertheless, in the early afternoon of August 3d many Davis employees walked off their jobs. The plant was shut down for the remainder of the day and operated on a limited basis between August 4th and 8th. Full production was resumed on August 9th.
The employer filed its complaint in the district court on August 11, 1978. It alleged that the statement in the special bulletin which accused The Davis Company of cheating its employees out of thousands of dollars violated the provision of Article X, section 4 of the agreement in which the union agreed not to "publish or circulate any false or misleading remarks about the Employer ...." It further alleged that the walkout of employees resulted from the false and misleading statement that the employer had cheated the employees and that the employer suffered damages from the loss of production during the walkout. The second count of the complaint charged that the publication "was willful and malicious The local union and Rudd filed a joint answer admitting that Rudd acted as agent of Local 282 in posting the special bulletin and denying that the statements in the bulletin were false and misleading or willful and malicious. The defendants denied that the agreement had been breached or the employer defamed. The answer also contained a number of affirmative defenses: that the statements in the bulletin were privileged under the First Amendment as expressions of opinion and fair comment; that the statements related to matters of public interest; that jurisdiction over the dispute was preempted under the Act and that the strike complained of was a "protected activity" within § 7 of the Act. By amendment these defendants added the defense that the employer had failed to exhaust the grievance procedures set forth in Article III of the agreement. The international union filed a separate answer denying its involvement in the activities complained of by the employer. The international union also filed a motion for summary judgment. The district court eventually dismissed the international union as a defendant.
and ... was known by the Defendants to be untrue at the time of the statement ...." Special and punitive damages were sought for alleged defamation.
The district court entered a pretrial order which recited the issues as set forth in the pleadings and noted one additional defense, that the walkout was not proximately caused by the special bulletin. The order contained a stipulation that the employer "does not owe employees money for overtime pay."
In its findings of fact the district court held that the union's refusal to settle the grievance because it claimed the employees were entitled to double overtime was based on a "specious theory." Rudd had testified that he interpreted the overtime provision of the agreement as follows: if an employee scheduled to work five days in a given week worked 10 hours each of the first four days and 8 hours the fifth day, the employee was entitled to overtime pay for 16 hours, that is for two hours each of the first four days and for eight hours the fifth day. His justification for this interpretation was that federal law requires the payment of overtime for all work over 40 hours per week and that this was required in addition to the daily overtime covered by the agreement. He clung to this interpretation despite the fact that the employee in the example worked a total of only 48 hours during the week and the agreement provided there would be no "pyramiding of overtime." Rudd's testimony indicated that he understood "pyramiding" to refer to the payment of double overtime for hours worked in excess of eight hours per day. Rudd was an experienced negotiator. He had participated actively in the negotiations which resulted in the September 6, 1977 agreement. Rudd testified that he honestly believed his interpretation of the overtime provision was correct at the time he posted the bulletin and only learned it was incorrect after suit was filed.
Among its conclusions of law the district court held that publication of the special bulletin constituted a breach of Article X, section 4 of the agreement; that Local 282 was responsible for the action of Rudd, its agent; that the accusation of cheating against the employer was false, misleading and defamatory because it accused the employer of dishonesty and "there was clearly no basis for the interpretation asserted by Mr. Rudd of the overtime provision of the contract, Article VI, section 1." The court further concluded that false, misleading and defamatory statements are not protected under either the First Amendment or the National Labor Relations Act. Though also labeled a conclusion of law the court made a finding that the loss of production which it found the employer had suffered was proximately caused by Rudd's "false, misleading and defamatory statements posted on the bulletin board." A judgment was entered awarding damages of $7,416.95 jointly against Local 282 and Rudd.
We do not believe the decision in this case can properly turn on the defamation law of Tennessee as urged by the employer. The language...
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