De Arroyo v. Sindicato de Trabajadores Packing., AFL-CIO, No. 7456-7458.

• Decision Date: 17 April 1970
• Docket Number: No. 7456-7458.
• Parties: Rosa M. Figueroa DE ARROYO et al., Plaintiffs, Appellants, v. SINDICATO DE TRABAJADORES PACKINGHOUSE, AFL-CIO, et al., Defendants, Appellants, and Puerto Rico Telephone Company, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

425 F.2d 281 (1970)

Rosa M. Figueroa DE ARROYO et al., Plaintiffs, Appellants, v. SINDICATO DE TRABAJADORES PACKINGHOUSE, AFL-CIO, et al., Defendants, Appellants, and Puerto Rico Telephone Company, Defendant, Appellant.

Nos. 7456-7458.

United States Court of Appeals, First Circuit.

April 17, 1970.

A. J. Amadeo Murga, Santurce, P. R., for Rosa M. Figueroa de Arroyo and another.

Irving M. King, Chicago, Ill., with whom Eugene Cotton and Richard F. Watt, Chicago, Ill., Luis G. Estades, San Juan, P. R., and Cotton, Watt, Jones, King & Bowlus, Chicago, Ill., were on brief, for Sindicato de Trabajadores Packinghouse, AFL-CIO, Distrito de Puerto Rico, and another.

Richard L. Marcus, Chicago, Ill., with whom Matthew E. Murray, Chicago, Ill., Fernando Ruiz-Suria, Antonio Bird, Jr., of San Juan, P. R., Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., and McConnell, Valdes, Kelley & Sifre, San Juan, P. R., were on brief, for Puerto Rico Tel. Co.

Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.

COFFIN, Circuit Judge.

Plaintiffs are seven telephone operators formerly employed by defendant Puerto Rico Telephone Company hereinafter "Company" at Mayaguez and members of defendant Sindicato de Trabajadores Packinghouse, AFL-CIO, and its local affiliate, Local 963 hereinafter collectively "Union". They were discharged by the Company — one in September 1963 and the other six in April 1964 — allegedly in contravention of the seniority provisions of the collective bargaining agreement between the Company and the Union. They immediately communicated the fact of their discharge to the Union but after the Union failed to take their claims through the grievance procedure, the plaintiffs filed suit, on November 22, 1965, against both the Union and the Company.¹

A first jury returned special verdicts that the Company's dismissal of plaintiffs had violated the seniority provisions, and that plaintiffs had properly submitted their claims to the Union. A second jury found that the Union had breached its duty of fair representation — with regard to six of the seven plaintiffs — and awarded plaintiffs varying amounts for lost earnings, allocated in varying portions between the Company and the Union.

The Union appeals from the finding of a breach of its duty of fair representation and the assessment of damages; the Company appeals from the finding of improper discharge, the finding that the Union had breached its duty, and the assessment of damages; and the plaintiffs appeal on the ground that additional elements of damages — including reinstatement — should have been awarded. We consider the appeals in that order.

The Union's Duty of Fair Representation

"Fair representation", conceived in a racial discrimination context in Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944), has matured into a broader obligation for unions, most recently articulated in Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). Republic Steel v. Maddox, 379 U.S. 650, 652-653, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965), had established that an employee under a collective bargaining agreement which provides exclusive remedies for breaches of that agreement must attempt to exhaust those contractual remedies before resorting to the courts. Vaca then made clear that the employee could overcome the employer's defense of failure to exhaust contractual remedies by proving that the employer had repudiated those remedies, or that the Union had — by a breach of its duty of fair representation — prevented the employee from exhausting those remedies, or that there was some other valid reason why the contractual remedies could be disregarded. Vaca v. Sipes, supra, 386 U.S. at 184-186, 87 S.Ct. 903; see Glover v. St. Louis-S. F. R. Co., 393 U.S. 324, 329-331, 89 S.Ct. 548, 21 L.Ed. 2d 519 (1969). Plaintiffs here sought to overcome this "exhaustion of contract" barrier by attempting to prove that the Union's "unfair representation" prevented the requisite exhaustion.

Vaca held that an employee does not have an absolute right to have his grievance taken through the grievance procedure;² unless the contract otherwise provides, the union has a range of discretion within which to determine that an employee's grievance is without merit. Vaca v. Sipes, supra, 386 U.S. at 191-193, 87 S.Ct. 903. Instead, the employee must prove arbitrary or bad faith conduct — variously referred to as the absence of honest purpose and judgment and/or the presence of hostility or discrimination — on the part of the union in order to prove that it has breached its duty. Vaca v. Sipes, supra at 190, 193, 87 S.Ct. 903; Humphrey v. Moore, 375 U.S. 335, 349-350, 84 S.Ct. 363, 11 L.Ed. 2d 370 (1964); Ford Motor Co. v. Huffman, 345 U.S. 330, 337-338, 73 S.Ct. 681, 97 L.Ed. 1048 (1953). However, while due care has not been made a part of the union's duty, the Court has "accepted the proposition that a union may not arbitrarily ignore a meritorious grievance or process it in perfunctory fashion." Vaca v. Sipes, supra at 191, 194, 87 S.Ct. at 917; see also Republic Steel v. Maddox, supra, 379 U.S. at 652, 85 S.Ct. 614.

Applying this multifaceted standard of fair representation to our case, we can rule out any possibility of subjective bad faith, hostility, discrimination, or dishonesty on the part of the Union officials in failing to press plaintiffs' grievances. Mr. Sanchez — the Union official who was responsible for the Union's action in this case — appears from the record as a dedicated Union leader and legislator of manifold responsibilities. However, we are still left with the Court's recognition that arbitrary and perfunctory handling by a union of an apparently meritorious grievance is not acceptable under the standard of fair representation.

This case reveals such handling. There was no evidence as to any plaintiff except Elsie Lugo Bernier³ that the Union ever investigated or made any judgment concerning the merits of her grievance. See Local Union 12, United Rubber, Cork, Linoleum, and Plastic Workers of America A.F.L.-C.I.O. v. N.L.R.B., 368 F.2d 12, 17-18 (5th Cir. 1966). Its entire attention during 1964 centered on an NLRB proceeding aimed at preventing the Company from contracting out work involving the installation of new equipment. Just before the six plaintiffs were dismissed in April 1964, the trial examiner made his report which explicitly confined its relief to those dismissed because of subcontracting, to which the Union filed no exceptions. In the face of that report and clear evidence that plaintiffs were dismissed because of automation rather than subcontracting, the Union president inexplicably concluded that the NLRB proceeding would adequately protect plaintiffs' rights. Clearly the jury was warranted in finding that the Union's failure to press plaintiffs' grievances was the result of its arbitrary and perfunctory handling of them.⁴

The Union's suggestion that its pressing of these grievances during the pendency of the NLRB proceeding would somehow have jeopardized that avenue of relief is completely without merit. There is nothing inconsistent in trying to protect the jobs of the more senior employees vis-a-vis the less senior employees in one forum, while trying to protect the jobs of a larger number of employees vis-a-vis outside employees in another forum. Moreover, it is obvious that the Union does not breach its duty when it presses legitimate seniority claims, even though the effect of success is to jeopardize the jobs of those defined by the contract as less senior.

Finally, the Union — joined by the Company — insists that the six plaintiffs discharged in April 1964 failed to specify the seniority basis for their grievances when they complained to the Union. It is true that these plaintiffs did not testify that they told either Miss Acevedo, the local Union delegate, or Mr. Sanchez that less senior employees had been retained when they had been discharged. However, Miss Acevedo, who undoubtedly knew all 30 telephone operators in the Mayaguez unit, forwarded to Mr. Sanchez not only plaintiffs' names but their dates of hiring, which indicated that five had worked over three years and two had worked over ten years. Almost identical communication had been sufficient to initiate the seniority grievance for Miss Lugo, the least senior of the seven plaintiffs who was discharged in September 1963 and whose grievance was pressed by the Union. Moreover, the Union had been informed just before these dismissals that they would occur because of the new automatic dialing system, so that seniority was the only possible basis for a grievance. Had the Union given anything but the most perfunctory attention to these grievances, it would have been obvious that they raised a seniority claim. We are satisfied, therefore, that the jury could have found that these seniority grievances were submitted to the Union in compliance with the appropriate provision in the collective bargaining agreement.⁵

Accordingly, we conclude that the jury was entitled to find that the Union's failure to press the six plaintiffs' grievances was the result of its arbitrary and perfunctory handling of them, and thus a breach of its duty of fair representation preventing an exhaustion of contractual remedies and enabling these six plaintiffs (see n. 3) to maintain their suit against the Company.

The Statute of Limitations

The Union contends, however, that even if it breached its duty of fair representation, plaintiffs' suit against it is barred by the one-year Puerto Rico statute of limitations for tort claims, 31 L.P.R.A. § 5298, since the Union's breach occurred over 19 months before plaintiffs filed suit on November 22, 1965. However, while International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (U.A.W.) A.F.L.-C.I.O. v. Hoosier Corp., 383 U.S. 696, 701-705, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966...