Bonds v. Coca-Cola Co.

• Decision Date: 03 December 1986
• Docket Number: No. 85-2597,COCA-COLA,85-2597
• Citation: 806 F.2d 1324
• Parties: 123 L.R.R.M. (BNA) 3284, 105 Lab.Cas. P 12,106 Johnnie BONDS, et al., Plaintiffs-Appellants, v. TheCOMPANY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1324

806 F.2d 1324

123 L.R.R.M. (BNA) 3284, 105 Lab.Cas. P 12,106

Johnnie BONDS, et al., Plaintiffs-Appellants, v. The COCA-COLA COMPANY, et al., Defendants-Appellees.

No. 85-2597.

United States Court of Appeals Seventh Circuit.

Argued Sept. 22, 1986.

Decided Dec. 3, 1986.

Jacob N. Gross, Jacob N. Gross, Ltd., Abramson & Fox, Chicago, Ill., for plaintiffs-appellants.

Marvin Gittler, Asher Pavalon Gittler & Greenfield, Ltd., Lawrence L. Summers, Vedder, Price, Kaufman & Kammholz, Chicago, Ill., for defendants-appellees.

Before FLAUM and EASTERBROOK, Circuit Judges, and SWYGERT, Senior Circuit Judge.

EASTERBROOK, Circuit Judge.

Johnnie Bonds and 36 other truck drivers were employed by Midwest Machinery Movers under an industry-wide collective bargaining agreement to which Midwest and Local 710 of the Teamsters were parties. Midwest provided transportation services for The Coca-Cola Company. In 1982 Coca-Cola moved some of its operations from Chicago to St. Paul, Minnesota. It terminated its contract with Midwest, which in turn laid off the drivers. The drivers, asserting that Midwest was an alter ego of Coca-Cola, invoked a provision of the collective bargaining agreement providing that employees may transfer to follow the work. Midwest denied the request, because it had not transferred any work to St. Paul, and Coca-Cola, which was not a party to the collective bargaining agreement, denied that it had obligations to the drivers.

The drivers asked their union to represent them in this dispute. Local 710 presented the drivers' claim to the Joint Area Council, an arbitral body including representatives of labor and management, on December 15, 1982. The drivers contend that Local 710's agent did not press their case before the Council, and that the labor representative on the Council voted with management to reject the claim. On July 28, 1983, more than seven months later, some of the drivers filed this hybrid contract and duty of fair representation action under Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, against Local 710, Midwest, and Coca-Cola. After the completion of discovery and some preliminary skirmishing, the district court granted summary judgment for defendants. The court held that the suit is untimely under DelCostello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), which established that hybrid Sec. 301 actions must be filed within six months after the claim accrues.

The drivers argue that DelCostello does not apply to this case because it was decided on June 8, 1983, only seven days before the date that the district court held was the last on which the drivers could have filed and therefore "was not in the public domain within the period of limitation held by the court below." We take this to be an argument that DelCostello is not retroactive. It is an argument we have rejected in several cases, none acknowledged by the drivers. E.g., Landahl v. PPG Industries, Inc., 746 F.2d 1312 (7th Cir.1984), pointing out that until DelCostello this court had applied an even shorter period of limitations.

The drivers' principal argument is that the claim did not accrue until mid-February 1983. It is undisputed for current purposes that, shortly after the Council's decision, the business agent of Local 710 told some of the drivers that the union would commence litigation to challenge the Council's decision, and that on January 20, 1983, the union's lawyer told three of the drivers that such litigation had no prospect of success, implying that none would be pursued. The drivers claim--and this is hotly disputed--that the others did not learn until mid-February that the union would not sue, because until then Local 710's business agent continued to represent that the union would act. The drivers contend both that the failure to sue was a breach of the duty of fair representation and that until they learned of the decision not to sue they did not know that the union had been against them all along. (They also contend that the union's negotiation of an agreement with Midwest rather than Coca-Cola violated the duty of fair representation.) Because the failure to sue was a breach of duty by the drivers' lights, they insist that the claim did not "accrue" until mid-February.

The district judge relied on Freeman v. Teamsters, 746 F.2d 1316 (7th Cir.1984), for the proposition that the claim accrued the date the Council decided against the drivers. We held in Freeman that the failure to contest an arbitration award in court cannot be a breach of the duty of fair representation. Arbitral awards are binding, and courts sustain them except in the most extraordinary circumstances. We discourage efforts to upset these awards. E.g., Dreis & Krump Mfg. Co. v. Machinists, 802 F.2d 247 (7th Cir.1986). A union is never obliged to contest an award in court in order to discharge its duty of fair representation, and a suit is likely to be met with an award of attorneys' fees to the other side, as it was in Dreis & Krump. We therefore held in Freeman that the date of the arbitrator's decision is the critical one for purposes of DelCostello, because on that date the employees know or could discover that they have a potential claim against their union. See Metz v. Tootsie Roll Industries, Inc., 715 F.2d 299, 304 (7th Cir.1983), cert. denied, 464 U.S. 1070, 104 S.Ct. 976, 79 L.Ed.2d 214 (1984). The drivers do not discuss Freeman in either their opening or their reply brief. It is dispositive against them. See also the decision on remand from the Supreme Court in DelCostello v. Teamsters, 588 F.Supp. 902 (D.Md.1984), affirmed, 762 F.2d 1219 (4th Cir.1985), rejecting an argument almost identical to the one presented by the drivers.

There might have been room for an argument based on equitable tolling. The drivers might have argued that although the claim accrued in December 1982, it was tolled by the union's promise to sue, and perhaps such an argument is implied by their position. The tolling lasted until February 1983, the argument might proceed, because not until February were all of the plaintiffs told that the union was on management's side.

This is a problematic line of argument. DelCostello emphasized the importance of expeditious resolution of hybrid claims under Sec. 301. Freeman establishes a readily ascertainable time when the claim accrues, if the union has taken it to arbitration. A rule that contemplation of suit tolls the time is equivalent to the rule rejected in Freeman--that the claim does not accrue until the union has decided not to file a suit. Many unions will discuss litigation; discussion may or may not be taken as a promise to sue; to use open discussion to enlarge the time for suit is to extend from six to nine months the effective period of limitations. (The union would have had 90 days to file a suit, see Dreis & Krump, 802 F.2d at 249-251.) In the process all certainty would be lost, as this case demonstrates. Now more than three years old, the case has been sidetracked from the substantive question whether the union violated its duty to the procedural question whether the drivers learned in January rather than in February that the union would not file a suit. Rules of law should promote ready ascertainment of rights and responsibilities. A rule fixing the time on the date of the arbitrator's decision does this. Employees could discover their claim in the exercise of diligence, even if they are ignorant in fact. They will have at least three months to file the hybrid Sec. 301 suit after the expiration of the 90 days the union had to file a suit challenging the arbitral award, which suggests that expansive tolling doctrines are unnecessary.

Tolling is possible in principle; for example, the union might hide from its members the existence of the arbitrator's decision. Perhaps a message that the arbitrator's decision was not "final" but would be followed by another layer of administrative review should be treated similarly. Fraudulent concealment is an established ground of tolling, and there are others. Holmberg v. Armbrecht, 327 U.S. 392, 396-97, 66 S.Ct. 582, 584-85, 90 L.Ed. 743 (1946). Cf. Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 392-98, 102 S.Ct. 1127, 1131-35, 71 L.Ed.2d 234 (1982); Sentry Corp. v. Harris, 802 F.2d 229, 236 (7th Cir.1986). But it is not a good idea to use tolling to undo rules of the sort established in Freeman. We have attempted to keep the rules for computing time in DelCostello cases as simple as possible. In Frandsen v. Teamsters, 782 F.2d 674 (7th Cir.1986), for example, we concluded that the pursuit of administrative remedies within the union tolls the time automatically, even if pursuit of the remedies could have been excused as futile. Frandsen pointed out that it is hard to tell whether remedies should have been used, id. at 682-84, so that a mechanical approach to the period of limitations is beneficial. The same considerations counsel simplicity in the choice of rules that interrupt the running of a period of limitations. See also Galindo v. Stoody Co., 793 F.2d 1502, 1510 (9th Cir.1986).

Some of the facts in this case suggest a form of concealment of the significance of the Council's decision. The business agent may have told some of the drivers that the union did not do much to persuade the Council because its decision was just a formality and that the only step that mattered would take place in court. It could be a sticky question whether such statements disguised the existence of a final decision or instead simply amounted to a denial of dereliction of duty. The former might toll the time, although the latter would not. Galindo, 793 F.2d at 1509; cf. United States v. Kubrick, 444 U.S. 111, 100 S.Ct. 352, 62 L.Ed.2d 259 (1979) (a federal period of limitations runs from the time a person knows of the injury and its cause, not from the time he first realizes that the defendant breached a legal duty)....