Buchholtz v. Swift & Co.
| Decision Date | 07 January 1980 |
| Docket Number | D,AFL-CI,Nos. 78-1559,78-1596,78-1573,s. 78-1559 |
| Citation | 609 F.2d 317 |
| Parties | 101 L.R.R.M. (BNA) 2229, 102 L.R.R.M. (BNA) 2219, 86 Lab.Cas. P 11,313, 87 Lab.Cas. P 11,542, 87 Lab.Cas. P 11,543 Charles N. BUCHHOLTZ and Lester J. Tauer, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, Cross-Appellants, v. SWIFT & COMPANY, Amalgamated Meat Cutters and Butcher Workmen of North America,efendants-Appellants, Cross-Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
John M. Bowlus, of Cotton, Watt, Jones, King & Bowlus, Chicago, Ill., for AFL-CIO.
Vance B. Grannis, Jr., of Grannis & Grannis, South St. Paul, Minn., for Swift & Co.; Roger N. Knutson, South St. Paul, Minn., on briefs.
Robert J. King, of Hvass, Weisman & King, Minneapolis, Minn., for Buchholtz and Tauer; Reed K. Mackenzie, Minneapolis, Minn., Thomas P. Lewis, Lexington Ky., and Robert F. Collins, Minneapolis, Minn., on brief.
Before GIBSON, Chief Judge, ROSS, Circuit Judge, and VAN SICKLE, District Judge. *
Appellants Swift & Company (Swift) and Amalgamated Meat Cutters and Butcher Workmen of North America (Amalgamated) appeal from an adverse judgment in the district court, after a trial to the court, which held them liable for over $1,000,000 in damages.
The plaintiffs are a class of former Swift employees who pursued claims against their former employer and former union for breach of the collective bargaining agreement and breach of the duty of fair representation.
This claim arose out of Swift's closing of its South St. Paul, Minnesota meat packing plant on November 29, 1969. Employees at that plant strongly reacted to Swift's announcement that it would pay no vacation benefits for the subsequent year, which employees urged had already been earned in 1969. According to Swift, because the plant would not be open on December 28, 1969, and because the contract provided that one requirement for vacation eligibility was that an employee be on the "active payroll" of the company on that date, none of the employees met the criteria and none were eligible.
While the union initially pressed these employees' vacation pay claim, it later settled with Swift by withdrawing the vacation pay claim and obtaining pension benefits for other employees who were then active union members. This "swap" resulted in the Settlement Agreement of June 30, 1971 entered into between Swift and Amalgamated, which barred the union's right to further press the vacation pay claim with the company. The trade was made without the participation of the former employees.
The plaintiffs thereafter came to federal court, urging that the trade of its valuable vacation pay claim by the union was a breach of the union's duty of fair representation to them, and further, that the company had wrongfully refused to pay the vacation benefits in violation of the collective bargaining agreement. 1
The district court held Amalgamated and Swift liable, and apportioned the damages between them. In reaching its final decision, the district court concluded that it was unnecessary for the plaintiffs to have exhausted intra-union appeals, that the union by arbitrary conduct and with hostile discrimination had unfairly represented the plaintiff class, and that the company, under the court's reading of the contract, owed plaintiffs the vacation benefits. We reverse, based on our interpretation of the collective bargaining agreement.
In its first line of defense in the district court, Amalgamated moved to dismiss plaintiffs' complaint by contending that plaintiffs had not exhausted internal union remedies provided by Amalgamated's constitution. 2 The district court denied the motion on grounds that the plaintiffs at the pertinent time were nonmembers who lacked standing to invoke remedies provided by the internal union mechanisms. 3
As a general rule, where a union provides its members with an appeal procedure, resort to the means of appeal is required prior to consideration of the member's unfair representation claim in federal court. If such exhaustion is required generally, however, it is certainly not the case that the courts are powerless to exercise discretion by assessing the adequacy of the remedy afforded and thus the essential utility of mandating exhaustion in a given case. 4 "Generally, the courts will require an exhaustion of intra-union remedies in the absence of some showing that to do so would be futile or that the remedies are inadequate." Foy v. Norfolk & Western Railway Co., 377 F.2d 243, 246 (4th Cir. 1967).
The Foy case, Supra, utilized a statutory section of the Labor-Management Reporting and Disclosure Act, 29 U.S.C.A. § 411(a)(4). The Proviso to that section (the Section primarily Prohibits a union from limiting the right of a member to institute an action in any court or agency) Permits the use of an exhaustion requirement of limited duration prior to a court suit or administrative action.
(4) Protection of the right to sue. No labor organization shall limit the right of any member thereof to institute an action in any court * * * Provided, That any such member may be required to exhaust reasonable hearing procedures (but not to exceed a four-month lapse of time) within such organization, before instituting legal or administrative proceedings against such organizations or any officer thereof * * * .
In Detroy v. American Guild of Variety Artists, 286 F.2d 75, 78 (2d Cir. 1961) the Second Circuit concluded that "it appears clear that the proviso was incorporated In order to preserve the exhaustion doctrine as it had developed and would continue to develop in the courts, lest it otherwise appear to be Congress' intention to have the right to sue secured by § 101 abrogate the requirement of prior resort to internal procedures." (Emphasis added.)
From the § 411 jurisprudence the courts have, with varying outcomes, on a case-by-case basis, analyzed the futility, the adequacy of remedy, and the reasonableness of an exhaustion requirement in the context of a § 301 action alleging breach of contract and unfair representation. See Chambers v. Local Union No. 639, International Brotherhood of Teamsters, 188 U.S.App.D.C. 133, 578 F.2d 375 (1978); Battle v. Clark Equipment Co., 579 F.2d 1338 (7th Cir. 1978); Winter v. Local Union No. 639, International Brotherhood of Teamsters, 186 U.S.App.D.C. 315, 569 F.2d 146 (1977). 5 We have carefully considered the posture of this case at the time the plaintiffs allegedly should have taken an intra-union appeal, and find no adequate remedy which such an appeal could have provided the plaintiffs.
The dispositive legal issue is whether appellant had a reasonable and substantial likelihood of obtaining redress of their grievances (if their claims were meritorious) by pursuing the internal remedies of their individual craft unions. If it is clear they could, the District Court is justified in dismissing their complaint for failure to do so. The appellants should not be denied a hearing on the merits of their claim, however, unless there was a genuine possibility that they could have obtained an adequate intra-union remedy.
Frederickson v. System Federation No. 114 of Railway Employees' Department, 436 F.2d 764, 768 (9th Cir. 1970). In the present case, not only did the union refuse to arbitrate the claim, it concededly gave up that claim to Swift in part for Swift's agreement to pay other claims in the amount of $928,200. The Settlement Agreement was then ratified by a vote of the then-members of the Local on June 21, 1971. It is difficult to understand how an appeal to the union hierarchy could have altered a binding, bilateral agreement between the union and the company, or have reversed the process at that point.
As the court said in Chambers v. Local Union No. 639, International Brotherhood of Teamsters, supra, 188 U.S.App.D.C. 133, 578 F.2d 375, in a similar situation:
The union-company position antagonistic to appellants has hardened. Appellants are confronted with a settled decision which conforms to the contentions of the Union, and Kane (the employer) is willing to implement it. That decision, reached on the merits, if not otherwise improper, is final and binding on all parties as provided by the Agreement. Recourse to internal union procedures could not conceivably change that opinion. The seniority-roster-merger question has gone too far, and involves the company too deeply, for the plaintiff-employees to expect any reasonable chance of relief from subsequent internal union complaint proceedings.
Id. 188 U.S.App.D.C. at 136, 578 F.2d at 387.
The text of the Settlement Agreement entered into between Swift and Amalgamated described their action as "final and binding":
WHEREAS, Local P-167, the International, and the Company have Now concluded a final and binding settlement of such four grievance cases in accordance with paragraph 59 of said Grievance Procedure;
NOW, THEREFORE, the International, Local P-167, and the Company agree as follows:
1. The International Local P-167 agree to withdraw from said Grievance Procedure With prejudice the following four grievance cases:
South St. Paul Grievance Case No. 69-22
(Emphasis added.) Note also that the agreement ostensibly bound All levels of the union, both local and international, which distinguishes this case from a case Amalgamated relies upon, Johnson v. Wilson Foods Corp. & Amalgamated Meat Cutters, No. 77-2051 (D.Kan. July 5, 1978). 6 We conclude that on this particular set of facts the chance for a Resolution, other than union affirmation of its prior action, was doubtful; neither direct relief...
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