Degan v. Ford Motor Co.

Decision Date13 April 1989
Docket NumberNo. 88-3162,D,AFL-CI,88-3162
Citation869 F.2d 889
Parties131 L.R.R.M. (BNA) 2151, 57 USLW 2675, 57 USLW 2708, 111 Lab.Cas. P 11,092, 10 Employee Benefits Ca 2438 Sidney W. DEGAN, Jr., Plaintiff-Appellant, v. FORD MOTOR COMPANY and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America,efendants-Appellees. Summary Calendar.
CourtU.S. Court of Appeals — Fifth Circuit

Sidney W. Degan, III, New Orleans, La., for plaintiff-appellant.

G. Phillip Shuler, Kevin L. O'Dea, Julie D. Livaudais, New Orleans, La., for Ford Motor Co.

Jay Thomas Youngdahl, Deborah A. Jeon, Little Rock, Ark., for UA Local 855, Intern. Union, United Auto. Aerospace.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before POLITZ, KING, and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Plaintiff Sidney W. Degan, Jr., brought suit against his former employer and union, alleging breach of an oral agreement to pay special early-retirement benefits and full pension benefits as provided for in the retirement plan and agreement applicable to him. The district court granted summary judgment for defendants, holding that Degan's cause of action was in substance a hybrid section 301/fair representation suit against both employer and union. With the claim so cast, the court determined that Degan had not filed his suit within the applicable six-month statute of limitations and thus held that the suit was time-barred. We affirm, but for different reasons.

I. A Broken Promise.

After his discharge from the Navy in 1946, Degan began his employment with Ford Motor Company ("Ford") at its New Orleans parts distribution facility. That employment relationship would eventually last twenty-four years, during the whole of which Degan was a member of the United Auto Workers, Local 855 (the "union"), which had a collective bargaining agreement with Ford. Degan was covered by various Ford/union pension plans, the plan at issue here having been incorporated into a 1967 agreement.

Ford made a business decision to close the New Orleans facility in 1970, when Degan was forty-five years old. Ford offered the employees of that facility, including Degan, several options: relocation out-of-state; receipt of lump-sum separation pay; or receipt of "sub-pay"--the separation amount spread out in installment payments over a one-year period. In his affidavit, Degan testified that, in answer to his queries, representatives of Ford and the union advised him of a special benefits package available to New Orleans employees: If he took separation pay, Degan would still be eligible for early-retirement "partial pension benefits" at age fifty-five, and then full benefits at age sixty.

Apparently, that package was acceptable to Degan, who applied for and received $5,243.55 in separation pay. However, the application for that pay, which Degan signed, specified that acceptance of the pay would result in a "break in seniority." Degan did not realize that a break in seniority made an employee ineligible for early-retirement benefits under the Ford/union retirement plan.

After several months of unemployment, Degan hired on with Caterpillar Tractor Company and worked there for fourteen years, until his retirement. During that time, he maintained contact with Adrian J. Sylvera, a co-employee at Ford who also had elected to receive separation pay and early-retirement benefits at the 1970 closing. Sylvera, who was older than Degan, applied for and received his early-retirement benefits upon reaching age fifty-five.

On March 7, 1979, at age fifty-four, Degan wrote to Ford stating that he desired his early-retirement benefits to commence on his birthday and requesting the appropriate application forms. Seven months later, he heard the first words of betrayal: A letter from Ford, dated October 2, advised him that his "break in seniority" made him ineligible for the benefits he requested. As a consolation, he was told he would be eligible for an early deferred vested pension upon reaching his sixtieth birthday.

Degan contacted a union official in charge of pension matters who, after a purported investigation, told him nothing could be done. When Degan inquired as to why he was being treated differently from Sylvera, the official told him that Ford had "made a mistake" in Sylvera's case and was not likely to do so again. Degan contends that he made numerous amicable attempts, to no avail, to convince Ford and the union that he should receive the package of benefits to which he believed he was entitled.

In September 1981, Degan retained counsel, who made a written demand upon Ford for the early-retirement benefits, retroactive to Degan's fifty-fifth birthday. In February 1982, Ford refused the demand, offering the same explanation given to Degan two years earlier.

II. Summary Judgment See-Saw.

Degan filed suit in Louisiana state court in March 1986, claiming breach of contract and seeking both partial and full pension benefits previously promised him by Ford's and the union's representatives. Ford removed the suit to federal district court, predicating jurisdiction on both diversity and federal question grounds, the latter including Ford's contention that Degan was alleging a breach of the collectively-bargained retirement plan and that thus his cause of action was preempted by section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. Sec. 185. 1

In March 1987, Ford filed a motion for summary judgment seeking dismissal of Degan's suit, contending that the suit was time-barred under either the six-month limitations period set forth in section 10(b) of the National Labor Relations Act ("NLRA"), 29 U.S.C. Sec. 160(b), or the limitations periods stated in ERISA, 29 U.S.C. Sec. 1144. The district court denied the motion, holding that because the appropriate statute of limitations in straightforward section 301 suits is the state statute pertaining to contract actions, Louisiana's ten-year statute was applicable.

In November 1987, Ford again filed for summary judgment, setting forth the same timeliness claims. In February 1988, the court announced that it had made a mistake in its earlier denial of the defendants' summary judgment motion. Observing that Degan had brought suit against both Ford and the union, the court characterized Degan's suit as a "hybrid section 301" action and explained:

A hybrid Sec. 301 suit is a suit comprising two causes of action. First, the employee seeks relief under Sec. 301 alleging a breach of the collective bargaining agreement. Second, the suit against the Union is for a breach of the Union's duty of fair representation.

The plaintiff's claims indicate that he is asserting a hybrid Sec. 301 claim. He has alleged that Ford breached the collective bargaining agreement by failing to pay the benefits which he asserts are rightly due to him. He also sued the union claiming that it breached its duty of fair representation by inducing him to take the lump sum separation payments without informing him of the ramifications of his decision.

Following DelCostello v. International Bhd. of Teamsters, 462 U.S. 151, 163, 103 S.Ct. 2281, 2289, 76 L.Ed.2d 476 (1983), the district court applied the six-month statute of limitations in section 10(b) of the NLRA and held that Degan's suit was time-barred.

We review the district court's action de novo, applying the same standards which the court used. See Brooks, Tarlton, Gilbert, Douglas & Kressler v. United States Fire Ins. Co., 832 F.2d 1358, 1364 (5th Cir.1987). Thus, we review the record independently, make any factual inferences in favor of the nonmovant, and then ask whether the movant is entitled to judgment as a matter of law. See Reid v. State Farm Mut. Auto Ins. Co., 784 F.2d 577, 578 (5th Cir.1986). In addition, summary judgment may be affirmed, regardless of the correctness of the district court's rulings, when we find in the record an adequate, independent basis for that result. See Schuster v. Martin, 861 F.2d 1369, 1371 (5th Cir.1988).

III. Claim Confusion.
A. NLRA/LMRA Claims.

The district court categorized this suit as a hybrid section 301/fair representation suit subject to a six-month statute of limitations per DelCostello, 462 U.S. at 166, 103 S.Ct. at 2291. However, this characterization of Degan's claims cannot have been correct, for the simple reason that Degan never complained of the breach of a collectively bargained contract, the sole province of section 301 actions. See 29 U.S.C. Sec. 185. Degan's contractual claims assert only that the employer's oral promises to himself and several others similarly situated at the close of the New Orleans part facility are enforceable. He does not allege that these separate oral agreements were collectively bargained. Thus, since Degan's contractual claim was not one arising under section 301, his suit cannot be "hybrid" in nature.

Degan may, however, have adequately framed a fair representation claim against his union for having irresponsibly informed him that he would receive early retirement benefits if he took separation pay. See Acri v. International Ass'n of Machinists & Aerospace Workers, 781 F.2d 1393, 1397 (9th Cir.), cert. denied, 479 U.S. 816, 107 S.Ct. 73, 93 L.Ed.2d 29 (1986). Yet, such claims are subject to the six-month statute of limitations period set forth in section 10(b) of the NLRA. See Richardson v. United Steelworkers of Am., 864 F.2d 1162, 1167 (5th Cir.1989).

Degan's suit, filed in March 1986, could not have come within that limitations period; his cause of action against the union most likely arose in January 1980, when he received a letter from a union representative informing him that the union had made inquiries with respect to his eligibility for early retirement benefits and had received a negative answer which the union implicitly was willing to accept. Even assuming that Degan's cause of action against the union did...

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