Aguinaga v. UNITED FOOD & COM. WORKERS INTERN., Civ. A. No. 83-1858-T.

• Decision Date: 12 July 1989
• Docket Number: Civ. A. No. 83-1858-T.
• Citation: 720 F. Supp. 862
• Parties: Stephen T. AGUINAGA, Wayne Pappan, and Janet Brown, Individually and on behalf of all other union members similarly situated, Plaintiffs, v. UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO/CLC, Defendant.
• Court: U.S. District Court — District of Kansas

720 F. Supp. 862

Stephen T. AGUINAGA, Wayne Pappan, and Janet Brown, Individually and on behalf of all other union members similarly situated, Plaintiffs, v. UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO/CLC, Defendant.

Civ. A. No. 83-1858-T.

United States District Court, D. Kansas.

July 12, 1989.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Ken M. Peterson, Morris, Laing, Brock, Evans & Kennedy, Robert C. Brown, Smith, Shay, Farmer & Wetta, Wichita, Kan., for plaintiffs.

Harry Huge, Stephen L. Hoffman and Gary L. Harris, Rogovin, Huge & Schiller, Washington, D.C., Paul L. Hulsey, Motley, Loadholt, Richardson & Poole, Charleston, S.C., for defendant.

OPINION AND ORDER

THEIS, District Judge.

I. INTRODUCTION

Following an eight week trial on the issue of liability in this hybrid breach of contract/breach of duty of fair representation case brought pursuant to section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, the jury returned a verdict in favor of the plaintiff class. Specifically, the jury found that the plaintiffs' former employer, defendant John Morrell and Company (Morrell), which has settled with the plaintiffs and was not involved in the trial, breached two provisions of the collective bargaining agreement in effect during the relevant time periods (the 1979 Master Agreement). The jury further found that defendant United Food and Commercial Workers International Union (UFCW or Union) breached the duty of fair representation which it owed to the plaintiffs in dealing with Morrell's breaches of the 1979 Master Agreement. The court directed a verdict in favor of defendant Local Union 340 at the close of all the evidence.

The court previously bifurcated the case into liability and damages phases. The damage phase is to be tried to the court. The parties have submitted briefs on the legal issues surrounding the damages phase. The court is now prepared to make certain preliminary rulings on damage issues which will govern the remainder of the case and determine the course of the damage trial.

The court notes that the same analysis applies to duty of fair representation suits brought in federal court pursuant to section 301 and unfair labor practice proceedings before the National Labor Relations Board. See San Francisco Web Pressmen and Platemakers' Union No. 4 v. NLRB, 794 F.2d 420, 424 n. 7 (9th Cir.1986). The court will therefore rely on NLRB cases in addition to section 301 cases.

In both its damages brief (Dk. No. 583) and its supplemental damages brief (Dk. No. 605), the Union makes several arguments that it cannot be held liable for any backpay to the plaintiff class. Some of the arguments are new; others have already been rejected by the court. The court finds the Union's position that it cannot, as a matter of law, be liable for backpay damages to be wholly without merit. The court therefore turns to the legal issues governing the assessment of liability and the measure of damages in the present case.

The jury found that Morrell breached the following two provisions of the 1979 Master Agreement:

10. The Management of the plant and direction of the working force, including the right to hire, suspend or discharge for just cause, to assign to jobs, to transfer Employees within the plant, to increase and decrease the working force, to determine products to be handled, produced or manufactured, to establish schedules of production and the methods, processes and means of products or handling, is vested exclusively in the Company, provided this will not be used for the purpose of discrimination against any Employee or to avoid any of the provisions of this Agreement, or any local agreement.

....

100....

(b) Within 5 years after the Company closes down or substantially terminates production operations at any plant or division or department of a plant covered by this Agreement, the Company will not enter into a contract or other similar arrangement whereby the Company agrees to purchase from a third party producer's plant located within 100 miles of the closed plant, division or department, the production output of such third party producer's plant or a volume of such output substantially equivalent to or exceeding the output of the closed Company plant, division or department, of the same product or substantially the same product which the Company produced at its closed plant of division or department thereof.

Plaintiffs' Exh. 1.

The evidence at trial established and the jury found that Morrell had a surreptitious plan to close its Rodeo Meats plant in Arkansas City, Kansas, where the plaintiffs were employed, and to reopen it later as a nonunion plant in violation of section 10 of the 1979 Master Agreement. The plant was closed in June 1982, purportedly permanently, and the plaintiffs were paid severance benefits. The plant was reopened in March 1983 as Ark City Packing Company (ACPC). ACPC employed significantly fewer employees at a lower wage rate than Rodeo Meats employed under the 1979 Master Agreement.

The jury's finding of a breach of section 100(b) was supported by evidence that, after Rodeo closed, Morrell obtained substitute product from outside the 100 mile limit and shipped this product into Wichita, which is within a 100 mile radius of Arkansas City. This substitute product was stored, inventoried, and distributed from a cold storage facility Morrell rented in Wichita.

The jury further found that the Union breached its duty of fair representation by acting arbitrarily, discriminatorily, or in bad faith in acting or failing to act to remedy Morrell's breaches of the Master Agreement. Specific facts and evidence will be discussed when necessary.

II. ASSESSMENT OF LIABILITY

A. Apportionment vs. Joint and Several Liability

Plaintiffs argue in their damages brief (Dk. No. 572) and reply brief (Dk. No. 584) that the Union should be held jointly and severally liable with Morrell for all damages suffered by the plaintiff class. Since Morrell has settled with the plaintiff class, the Union would be solely responsible for the payment of all damages awarded less the amount of Morrell's settlement. The Union argues that if liability is to be imposed, it must be apportioned between it and Morrell. The court agrees with the Union in this regard.

In discussing the imposition of damages against an employer and a union in a breach of contract/breach of duty of fair representation case, the Supreme Court has stated:

The governing principle, then, is to apportion liability between the employer and the union according to the damage caused by the fault of each. Thus, damages attributable solely to the employer's breach of contract should not be charged to the union, but increases if any in those damages caused by the union's refusal to process the grievance should not be charged to the employer.

Vaca v. Sipes, 386 U.S. 171, 197-98, 87 S.Ct. 903, 920-21, 17 L.Ed.2d 842 (1967). In Vaca, the Court noted in dicta that it was

not dealing here with situations where a union has affirmatively caused the employer to commit the alleged breach of contract. In cases of that sort where the union's conduct is found to be an unfair labor practice, the NLRB has found an unfair labor practice by the employer, too, and has held the union and the employer jointly and severally liable for any back pay found owing to the particular employee who was the subject of their joint discrimination. Even if this approach would be appropriate for analogous § 301 and breach-of-duty suits, it is not applicable here.

Id. at 197 n. 18, 87 S.Ct. at 920 n. 18 (citations omitted).

The Supreme Court recently reaffirmed Vaca's "governing principle" of allocation of responsibility in Bowen v. United States Postal Service, 459 U.S. 212, 103 S.Ct. 588, 74 L.Ed.2d 402 (1983). Of "paramount importance" is the right of the employee, who has been injured by both the employer's breach of contract and the union's breach of the duty of fair representation, to be made whole. Id. at 222, 103 S.Ct. at 594. While both the employer and the union have caused damages to the employee, the union will be responsible for the increase in damages caused by its breach of duty. Id. at 223, 103 S.Ct. at 595. While reaffirming the general rule that damages are to be apportioned between the employer and the union, the Court again noted in dicta that "this is not a situation in which either the union or the employer has participated in the other's breach." Id. at 223 n. 11, 103 S.Ct. at 595 n. 11 (citing Vaca, 386 U.S. at 197 n. 18, 87 S.Ct. at 920 n. 18). Under the general rule of Vaca and Bowen, liability must be apportioned; joint and several liability is the exception.

Plaintiffs cite several cases in support of their position that joint and several liability is appropriate in the present case. In two cases cited by the plaintiffs, the district courts did not impose joint and several liability. Ryman v. Office and Professional Employees Int'l Union, 628 F.Supp. 421, 427 n. 7 (E.D.Tex.1985) ("Because defendant Texaco played no part in the union's alleged breach of its duty of fair representation, it could not be held liable for that breach."); Hardesty v. Essex Group, Inc., 550 F.Supp. 752, 768 (N.D.Ind. 1982) (no damages could be awarded against the union defendants because they did not participate in the employer's alleged wrongful discharge of plaintiff). Hardesty is unpersuasive for the additional reason that the court held (prior to the Supreme Court's decision in Bowen) that back pay could be assessed only against the employer and not against the union. Id. at 767.

In Waters v. Wisconsin Steel Works, 427 F.2d 476 (7th Cir.), cert. denied, 400 U.S. 911, 91 S.Ct. 137, 27 L.Ed.2d 911 (1970), while the court stated that the union could be joined as a defendant if it was the "moving force in producing a violation of the contract by the employer," 427 F.2d at 491 n. 26, the court further held that the...