Adams v. Budd Co.

• Decision Date: 06 July 1988
• Docket Number: No. 87-1771,87-1771
• Citation: 846 F.2d 428
• Parties: 128 L.R.R.M. (BNA) 2387, 56 USLW 2708, 109 Lab.Cas. P 10,488 Henry C. ADAMS, Jr., et al., Plaintiffs-Appellants, v. The BUDD COMPANY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 428

846 F.2d 428

128 L.R.R.M. (BNA) 2387, 56 USLW 2708,

109 Lab.Cas. P 10,488

Henry C. ADAMS, Jr., et al., Plaintiffs-Appellants, v. The BUDD COMPANY, et al., Defendants-Appellees.

No. 87-1771.

United States Court of Appeals Seventh Circuit.

Argued Dec. 3, 1987.

Decided May 5, 1988.

Rehearing Denied July 6, 1988.

Gilbert King, Jr., MacArthur Drake, Drake & Assoc., Gary, Ind., for plaintiffs-appellants.

Nora L. Macey, Segal & Macey, Indianapolis, Ind., John C. Wright, Jr., Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., for defendants-appellees.

Before BAUER, Chief Judge, RIPPLE, Circuit Judge, and WILL, Senior District Judge. ^*

WILL, Senior District Judge.

Plaintiffs, 31 former employees of the Budd Company's Indiana plant ("Budd"), filed this action alleging that Budd violated their preferential hiring rights under a collective bargaining agreement by refusing to hire them at other Budd facilities after they were laid off. Plaintiffs also sued their collective bargaining agent, Local 1122 of the United Automobile, Aerospace & Agricultural Implement Workers of America ("the union"), alleging that the union breached its duty of fair representation by refusing to arbitrate their charge that Budd violated the collective bargaining agreement. The district court granted summary judgment in favor of both defendants. We affirm.

I.

The undisputed facts on appeal reveal the following. The Budd Company is a manufacturer of automobile and truck body parts. It has two plants in Philadelphia and other plants in Tennessee, Michigan, and Ohio. Until November 1982, Budd also operated a plant in Gary, Indiana, which closed due to business conditions. The plaintiffs in this action were all employed by Budd's Gary facility. All were laid off between 1979 and 1980; they had not been recalled when Budd shut the Gary plant down. The following agreements set the terms and conditions of future employment for laid off workers in the Gary plant: a National Production and Maintenance Agreement; a local supplemental agreement; a letter agreement on preferential hiring; and a plant closedown agreement negotiated in October 1982.

These four agreements did not provide the laid-off workers much security. For example, the preferential hiring agreement required only that Budd (1) post job openings for plants covered by the National Agreement, (2) make available applications to seniority employees of the Gary plant on indefinite layoff at its Indiana personnel office, and (3) allow seniority employees to apply through the mail rather than having to apply in person at each Budd facility.

Each application by a laid-off worker under the provisions of the preferential hiring agreement was valid for only six months. After six months, the employee was required to send in a new application if he wished to be considered for employment at other Budd plants. Moreover, under the national and local agreements, preferential hire rights were limited to "seniority employees." Employees could retain seniority status for a maximum of five years after the date of layoff, or for a period equal to total seniority, whichever was less. Finally, laid-off senior Gary employees were not given absolute preferential hiring rights; the July 27, 1982 letter agreement provided instead that laid-off employees were entitled to consideration for employment at other plants but that Budd reserved sole discretion to establish "local plant hiring eligibility requirements" and to reject employees on the basis of these local standards.

Budd closed its Gary plant in November 1982. Between 1982 and 1984, laid-off Gary employees submitted approximately 550 applications for openings at surviving Budd plants. One hundred and sixty of these employees eventually got jobs at other Budd plants; none of the plaintiffs ever received offers of employment.

In February 1984, a group of laid-off employees formed "The Committee of Former Budd Employees" ("the Committee"). All of the plaintiffs were members. The Committee sent a letter on March 7, 1984 to Dallas Sell, a director of the union, asking for assistance with their problems involving the recall and relocation practices of Budd's Philadelphia plant. On March 9, 1984, Owen Beiber, the President of the union, wrote back stating that he was referring the Committee's correspondence to the union's "Budd Company Department" for "investigation and follow-through."

Thomas Rodgers, the International Representative of the union's Budd Company Department, investigated the Committee's complaints. Rodgers obtained from Budd the personnel records of 24 Committee members denied employment. On April 10, 1984, Rodgers wrote the Committee that he had investigated Budd's refusal to hire them and that he was enclosing employment records which contained information on why Budd had denied them jobs at other plants. Rodgers stated: "It is for the reason shown that the Company refuses to hire you at the Philadelphia plant. If you have any further questions, do not hesitate to write to me."

Approximately one year later (and following two successive National Labor Relations Board dismissals of unfair labor practice charges filed by the Committee against the union), plaintiffs again submitted applications to Budd for jobs at other plants. By this time, however, fifteen of the former employees had lost their seniority rights (including the right to assert breach of the collective bargaining agreement) because five years had passed since Budd had laid them off. Moreover, because Budd had closed the Gary area personnel office the previous summer, Budd was no longer accepting mailed applications for preferential hire. When Budd denied the plaintiffs' February 1985 applications, the plaintiffs again asked the union to file grievances. Rodgers, however, refused this request because, he alleged, plaintiffs' applications were both untimely and without support in the contract.

Plaintiffs subsequently filed this action against Budd and the union alleging that the union breached its duty of fair representation, and that Budd's failure to rehire them at other plants constituted a breach of the collective bargaining agreement. At the close of discovery, both the union and Budd successfully moved for summary judgment. In granting the defendants' motions for summary judgment, the district court first found that the statute of limitations had run on plaintiffs' claims involving the union's failure to grieve or arbitrate Budd's refusals to hire them at other plants from 1979 through 1984. Second, the court found that although plaintiffs' June 1985 complaint was timely with regard to the union's failure to grieve Budd's February 1985 denials of preferential hire, defendants were entitled to summary judgment as to fifteen of the plaintiffs because they had lost seniority status prior to the filing of the 1985 applications. Finally, the court concluded that the remaining plaintiffs could not pursue their breach of contract claim against Budd because they were unable to establish a necessary element of that cause of action: that is, breach of the union's duty of fair representation.

II.

At issue is whether the court correctly granted defendants' motions for summary judgment. In a somewhat rambling fashion, plaintiffs raise various arguments on appeal. Many of the specific contentions advanced by the plaintiffs were not raised before the district court and hence were waived. Hunter v. Allis-Chalmers Corporation, 797 F.2d 1417, 1430 (7th Cir.1986); Evans v. Fluor Distribution Cos., 799 F.2d 364, 366 (7th Cir.1986). Here, we need only review two issues: (1) whether there are material facts in dispute which could establish a breach of the union's duty of fair representation, which breach is a condition precedent to the plaintiffs' suit against Budd for violation of the collective bargaining agreement, and (2) whether plaintiffs' June 1985 complaint was timely as to the union's refusal to grieve Budd's denials of employment through 1984.

We first examine whether plaintiffs' claims surrounding the union's failure to grieve Budd's alleged violations of the collective bargaining agreement from 1979 through 1984 are time barred.

Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. Sec. 185(a), establishes a federal forum to resolve suits for violation of contracts between an employer and a labor organization. The LMRA contains no statute of limitations for Sec. 301 actions. Yet the Supreme Court has held that the six-month statute of limitations set forth in Sec. 10(b) of the National Labor Relations Act, 29 U.S.C. Sec. 160(b), applies to "hybrid Sec. 301/duty of fair representation" claims like the present case. DelCostello v. Teamsters, 462 U.S. 151, 154, 103 S.Ct. 2281, 2285, 76 L.Ed.2d 476 (1983). The six-month limitations period begins to run "from the time a final decision on the employee's grievance has been made or from the time the employee discovers, or in the exercise of reasonable diligence should have discovered, that no further action would be taken on his grievance." Richards v. Local 134, 790 F.2d 633, 636-37 (7th Cir.1986); Metz v. Tootsie Roll Industries, Inc., 715 F.2d 299, 304 (7th Cir.1983) (union's refusal to file grievance constitutes a final decision that triggers the running of the statute of limitations).

Here, though plaintiffs continually applied and were continually refused employment by Budd from 1979 through 1984, plaintiffs did not file their complaint in the district court until June 17, 1985. Plaintiffs contend that this filing was timely because the union never told them that it had completed its inquiry into plaintiffs' claims that Budd had violated the preferential hiring agreement. Yet, it is clear that plaintiffs knew or should have known as early as April 10, 1984--the date of Thomas Rodgers' letter stating that he had investigated plaintiffs' complaints--that the union intended to take no further...