Burklow v. Baskin — Robbins Usa, Co.

• Decision Date: 22 July 2003
• Docket Number: No. CIV.A.4:01-CV-147-M.,CIV.A.4:01-CV-147-M.
• Citation: 274 F.Supp.2d 899
• Parties: Jim BURKLOW, et al. Plaintiffs v. BASKIN — ROBBINS USA, CO. and International Brotherhood of Teamsters, A.F.L., C.I.O. Local Union No. 783 Defendants.
• Court: U.S. District Court — Western District of Kentucky

Page 899

274 F.Supp.2d 899

Jim BURKLOW, et al. Plaintiffs v. BASKIN — ROBBINS USA, CO. and International Brotherhood of Teamsters, A.F.L., C.I.O. Local Union No. 783 Defendants.

No. CIV.A.4:01-CV-147-M.

United States District Court, W.D. Kentucky, Owensboro Division.

July 22, 2003.

COPYRIGHT MATERIAL OMITTED

Shealia L. Murphy, Charles S. Wible, Owensboro, for Plaintiffs.

Paul Heylman, Schmeltzer, Aptaker & Shepard, P.C., Washington, D.C., for Defendant, Baskin Robbins USA, Co.

Herbert L. Segal, Segal, Steward, Cutler, Lindsay, Janes & Berry PLLC, Louisville, for Defendant International Brotherhood of Teamsters, Local 783.

MEMORANDUM OPINION AND ORDERS

McKINLEY, District Judge.

This matter is before the Court on motions for summary judgment filed by Defendant, Baskin-Robbins USA, Co. ("Baskin-Robbins") [DN 42], and by Co-Defendant, International Brotherhood of Teamsters, A.F.L., C.I.O. Local Union No. 783 ("Local 783" or "the Union") [DN 45]. Having been fully briefed, these matters now stand ripe for decision. For the reasons set forth below, both motions are GRANTED.

I. BACKGROUND

This case arises from the closing of the Baskin-Robbins ice cream plant in Owensbon, Kentucky. Plaintiffs are former Baskin-Robbins employees who, at all times pertinent to this litigation, were represented by Local 783. In 1998, Baskin-Robbins and Local 783 negotiated a collective bargaining agreement ("1998 CBA") effective through 2002. During those negotiations, the Union expressed concern about the possibility that Baskin-Robbins might sell the plant to another employer who would reduce employee wages or benefits. In response to this concern, Baskin-Robbins agreed to an Addendum to the 1998 CBA, entitled "Successors and Assigns Clause" ("S & A Clause"), requiring it to pay the greater of $1 million or all wages and benefits due under the agreement in the event that the plant was sold to a buyer that refused to abide by its terms.

On January 12, 2001, Baskin-Robbins announced that, as a result of its decision to outsource the manufacture of its ice cream to Dean Foods, the Owensboro plant would cease operations on March 15, 2001. On January 16, 2001, the Union filed a grievance under the 1998 CBA claiming that the plant closing was covered by the S & A Clause and that the employees were therefore entitled to their wages and benefits due for the remainder of the agreement or $1 million, whichever was greater. Baskin-Robbins denied the grievance, however, maintaining that the S & A Clause only applied in the event that the plant was sold to a "successor employer" and did not apply to a plant closing.

On January 25, 2001, Baskin-Robbins and Local 783 engaged in "effects bargaining" to resolve the impact of the plant closing on the employees. By the end of the second day of negotiations, Baskin-Robbins had presented a "last, best and final offer" to the Union which included: (1) a cash payout to each employee based on the employee's years of service; (2) a payout of accumulated sick pay; (3) six months of company-paid health insurance continuation; (4) a cash productivity bonus; and (5) a program to assist employees in finding new employment.

Baskin-Robbins'"last, best, and final offer" was subsequently memorialized in a letter ("Offer Letter") from Baskin-Robbins' counsel to Union representative Jerry Vincent ("Vincent"). The Offer Letter set forth the terms of Baskin-Robbins' offer and made it clear that "this last, best and final offer represents the Company's proposal for full settlement of all matters arising at the Owensboro plant, including the plant closing and pending grievance regarding same." (Letter from Paul Heylman to Vincent of 02/02/01, at 3.)

On February 25, 2001, the Union convened a meeting to vote on whether to accept or reject the terms of Baskin-Robbins' offer. As set forth above, the Offer Letter clearly stated that acceptance of the offer would settle all claims relating to the Owensboro plant, including the pending grievance. At the ratification meeting, however, Vincent allegedly assured the employees that acceptance of the offer would have no bearing on their ability to pursue the grievance. Ultimately, the employees voted to accept Baskin-Robbins' offer by a margin of 59-17.

After the vote, Union business representative Todd Thomason ("Thomason") formally accepted Baskin-Robbins' offer on behalf of the Union by writing "Accepted and Agreed" and signing his name on the last page of the Offer Letter. Soon thereafter, the parties executed a new agreement reaffirming Thomason's acceptance of the Offer Letter, but providing an exception in the event that Baskin-Robbins sold the plant to another company that manufactured ice cream during the term of the 1998 CBA. The parties' new agreement ("Closing Agreement") expressly provided that:

This agreement is a full settlement and release of all grievances and claims relating to the plant closing and the contract. Specifically, the parties agree that there will be no claim raised that the Company was obligated to pay out anything more than the Company's last, best and final offer of February 1, 2001 ....

Baskin-Robbins proceeded to pay out all amounts due under the Closing Agreement. Nonetheless, many of the former employees felt that they had been deceived throughout the plant closing process by both their employer and their union — especially regarding their ability to pursue the grievance. As a result, on August 31, 2001, Plaintiffs initiated the present lawsuit. Plaintiffs' original complaint asserted a "hybrid" claim under the Labor Management Relations Act ("LMRA") alleging that Baskin-Robbins had breached the 1998 CBA and that the Union had violated its duty of fair representation. On October 11, 2001, Plaintiffs filed an amended complaint, adding state law claims for fraud and civil conspiracy and attempting to join sixteen "new plaintiffs" not named in the original complaint. Baskin-Robbins and the Union (collectively "Defendants") now move for summary judgment on Plaintiffs' claims, against them.

II. STANDARD OF REVIEW

In order to grant a motion for summary judgment, the Court must find that the pleadings, together with the depositions, interrogatories and affidavits, establish that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56. The moving party bears the initial burden of specifying the basis for its motion and of identifying that portion of the record which demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party satisfies this burden, the non-moving party thereafter must produce specific facts demonstrating a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Although the Court must review the evidence in the light most favorable to the non-moving party, the non-moving party is required to do more than simply show that there is some "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Co., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The Rule requires the non-moving party to present "specific facts showing there is a genuine issue for trial." Fed.R.Civ.P. 56(e) (emphasis added). "The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

III. DISCUSSION

In support of their respective motions for summary judgment, Defendants argue: (1) that this Court does not have subject matter jurisdiction over Plaintiffs'"hybrid" claim; (2) that Plaintiffs' state law claims are preempted by federal law; and (3) that even if this Court were to reach the merits of Plaintiffs' federal and state claims, those claims are nonetheless insufficient to withstand summary judgment. In addition, Defendants contend that the claims of the sixteen "new plaintiffs" are time barred and must be dismissed.

A. Section 301 "Hybrid" Claim

Plaintiffs'"hybrid" claim, brought pursuant to Section 301 of the LMRA, alleges that Baskin-Robbins breached the 1998 CBA and that the Union violated its duty of fair representation. The Court will consider each part of Plaintiffs'"hybrid" claim in turn.

1. Section 301 Claim Against Baskin-Robbins

Section 301(a) of the LMRA provides that suits for "violation of contracts between an employer and a labor organization" may be brought in federal district court. 29 U.S.C. § 185(a). "Thus, under Section 301(a), district courts possess subject matter jurisdiction in cases involving an alleged violation of an existing collective bargaining contract." Heussner v. Nat'l Gypsum Co., 887 F.2d 672, 676 (6th Cir. 1989). In this case, however, Defendants contend that this Court does not have subject matter jurisdiction over Plaintiffs' Section 301 claim against Baskin-Robbins because adjudication of that claim would first require the Court to adjudicate the validity of the Closing Agreement which superceded the 1998 CBA. In support of their contention, Defendants cite the Sixth Circuit's decision Adcox v. Teledyne, Inc., 21 F.3d 1381 (6th Cir.1994).

In Adcox, as here, the employer and local union engaged in "effects bargaining" after the employer announced its intention to cease operations. The union demanded that the employer provide the employees with various benefits, including continuation of health insurance and early pension benefits for all employees regardless of the length of service. In addition, the union sought certain "special distribution" benefits (essentially severance pay) provided for in a collectively bargained "Service Award Agreement." The employer agreed to the union's demand for continued health insurance, but...