Deshetler v. Fca U.S. LLC

• Court: U.S. District Court — Northern District of Ohio
• Writing for the Court: JUDGE JACK ZOUHARY
• Decision Date: 30 November 2018
• Docket Number: Case No. 3:18 CV 85,Case No. 3:18 CV 78
• Citation: DeShetler v. FCA U.S. LLC, Case No. 3:18 CV 78, Case No. 3:18 CV 85 (N.D. Ohio Nov 30, 2018)
• Parties: Robert DeShetler, Jr., et al., Plaintiffs, v. FCA US LLC, et al., Defendants.

Robert DeShetler, Jr., et al., Plaintiffs, v. FCA US LLC, et al., Defendants.

Case No. 3:18 CV 78

Case No. 3:18 CV 85

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO WESTERN DIVISION

November 30, 2018

MEMORANDUM OPINION AND ORDER

JUDGE JACK ZOUHARY

INTRODUCTION

Defendant FCA US LLC (FCA) and Defendants International Union United Automobile, Aerospace and Agricultural Implement Workers of America and UAW Region 2B (collectively "UAW") move to dismiss the Amended Complaints (Docs. 18, 20) (referred to as "DeShetler Complaint" and "Sheets Complaint"). Plaintiffs oppose (Docs. 21, 22), and FCA replies (Doc. 23). This Court then sent the parties questions (Doc. 25), to which the parties responded (Docs. 28-30) and a hearing was held.

BACKGROUND

This case arises from Plaintiffs' employment in the Wrangler Paint Shop at the Toledo Supplier Park, which is operated by FCA (DeShetler Complaint ¶ 73; Sheets Complaint ¶ 65). At all relevant times, Plaintiffs were represented by UAW.

The Toledo Supplier Park Arrangement. "In the early 2000's," then-Chrysler, now-FCA (hereinafter referred to as "FCA" regardless of ownership or corporate structure at the time) constructed a new assembly line "to manufacture the 2007 Jeep Wrangler" -- the Toledo Supplier Park (DeShetler Complaint ¶¶ 96-97; Sheets Complaint ¶¶ 85-86). This assembly line tested a new "collaborative" structure where "third-party suppliers would be co-located and would perform portions of the manufacturing and assembly process traditionally undertaken by [FCA] hourly employees" (DeShetler Complaint ¶ 97; Sheets Complaint ¶ 86). Plaintiffs allege this "'collaborative structure' deviated significantly from a long-established practice" and "violated several provisions of the master agreements" prohibiting the use of independent contractors (DeShetler Complaint ¶ 98; Sheets Complaint ¶ 87).

To successfully launch the Toledo Supplier Park, FCA and the collaborating suppliers "needed a cadre of experienced autoworkers" (DeShetler Complaint ¶ 99). But such workers were hard to find. To fill the spots, FCA and UAW began recruiting "senior UAW members already employed by [FCA] . . . by encouraging them to retire from [FCA], begin collecting their pensions[,] and begin working at the Toledo Supplier Park through the nominally independent third-party suppliers" (id. ¶ 101). This group included the DeShetler Plaintiffs. Relying on FCA and UAW's representations that they "could continue to work indefinitely" and would otherwise be "taken care of," the DeShetler Plaintiffs retired from FCA "in or around 2006" and shortly after, began working in the Toledo Supplier Park Wrangler Paint Shop (id. ¶ 102-04, 134). The Sheets Plaintiffs were also hired around this time "to work for the [third-party] suppliers" (Sheets Complaint ¶¶ 1, 108, 113).

"Between 2006 and 2011," Plaintiffs worked for a variety of third-party employers (DeShetler Complaint ¶ 116; Sheets Complaint ¶ 116). These included, "[i]n approximate chronological order[,] . . . Hayden, Durr[,] Magna Styer[,] Gonzalez/[FCA]" (DeShetler Complaint ¶ 116; Sheets Complaint ¶ 116). "From 2008" forward, Plaintiffs "were covered by a collective bargaining agreement between the UAW . . . and a [sic] Magna Styer" (DeShetler Complaint ¶ 111; Sheets Complaint ¶ 106).

Plaintiffs contend these third-party employers were "independent in name only" and, in reality, FCA "operated the Wrangler Paint Shop" (DeShetler Complaint ¶ 110; Sheets Complaint ¶ 105). Plaintiffs further allege that, "[a]s a practical matter," "all workers in the Wrangler Paint Shop . . . were [FCA] employees at all times," but FCA "intentionally sought to avoid acknowledging [this] through the fig leafs [sic]" of the independent-contractor arrangement (DeShetler Complaint ¶¶ 118, 122; Sheets Complaint ¶¶ 117-21).

By early 2011, the relationship between Magna Styer and FCA "had deteriorated" and FCA "desired to exercise more direct control over management of the plant" (DeShetler Complaint ¶ 138; Sheets Complaint ¶ 127). Plaintiffs contend that FCA, through a letter sent in February 2011, "took over direct management of the Wrangler Paint Shop" and became a party to the 2008 Magna-Styer agreement (DeShetler Complaint ¶¶ 139-44; Sheets Complaint ¶¶ 128-33). But this letter also provided that the Wrangler Paint Shop employees would be "hired by a third party" (Doc. 16-5), and Plaintiffs were assigned to "Gonzalez Contract Services" around this same time (DeShetler Complaint ¶ 146; Sheets Complaint ¶ 136). Plaintiffs allege that "Gonzalez performed almost no management or business function besides serving as the[ir] nominal employer" (DeShetler Complaint ¶ 147; Sheets Complaint ¶ 137). They assert that despite the fact the independent-contractor arrangement "was contrary to various master agreements," UAW "permitted the unconventional arrangement to continue," while "repeatedly assur[ing] Plaintiffs . . . that the arrangement would have no adverse affect [sic]" on them (DeShetler Complaint ¶¶ 151-52; Sheets Complaint ¶¶ 141-42).

The New Agreement. "At some point in late 2011 or early 2012," FCA and UAW "decided to end the nominal supplier/contractor agreement that had prevailed in the Wrangler Paint Shop since it opened" (DeShetler Complaint ¶ 153; Sheets Complaint ¶ 143). As a result, FCA terminated the Gonzalez contract. Then, "[a]s FCA expected and intended," Gonzalez laid off all the Wrangler PaintShop employees, including Plaintiffs (DeShetler Complaint ¶ 154; Sheets Complaint ¶ 144). FCA's decision to "insource[]" the Wrangler Paint Shop employees "created a need for collective bargaining concerning the[ir] status" (DeShetler Complaint ¶ 155; Sheets Complaint ¶ 146). As discussed further below, this bargaining process was "marred by several procedural and substantive irregularities" and, in November 2012, resulted in a new proposed collective bargaining agreement (New Agreement) (DeShetler Complaint ¶ 156; Sheets Complaint ¶ 147).

In this New Agreement, UAW accepted FCA's position that Plaintiffs were "solely employed by Gonzalez" and "functionally equivalent to new hires from the street," despite the parties' previous course of dealing and UAW's own repeated representations (DeShetler Complaint ¶ 194; Sheets Complaint ¶ 174). The New Agreement resulted in the DeShetler Plaintiffs' termination (DeShetler Complaint ¶ 185). At the time, an FCA spokesperson told media outlets that, "[b]y virtue of their retirement," the DeShetler Plaintiffs were ineligible for reemployment (DeShetler Complaint ¶ 170). Plaintiffs allege this was patently false and that they brought this to UAW's attention several times before and after their termination (id. at ¶¶ 169-75). The New Agreement also "stripped [the Sheets Plaintiffs] of their seniority based upon their actual date of hire and arbitrarily assigned a seniority date of November 30, 2012, or the date that [FCA] purported to officially take over direct management of the Wrangler Paint Shop" (Sheets Complaint ¶ 163).

The New Agreement was eventually presented to the affected employees on November 18, 2012 -- a mere twelve days before the DeShetler Plaintiffs were to be terminated and the Sheets Plaintiffs were to lose their seniority status (DeShetler Complaint ¶¶ 191-92; Sheets Complaint ¶¶ 171-72). UAW "indicated that the proposal was the result of complex negotiations conducted in good faith . . . [and] was the best that could be accomplished under difficult circumstances" (DeShetler Complaint ¶ 193; Sheets Complaint ¶ 173). A majority of the Wrangler Paint Shopemployees approved the agreement (DeShetler Complaint ¶ 199; Sheets Complaint ¶ 179). The DeShetler Plaintiffs then signed a release of their potential claims against the UAW, FCA, and Gonzalez in exchange for a severance payment (DeShetler Complaint ¶¶ 201-03).

Plaintiffs attempted to challenge their termination and loss of seniority through the grievance process but were unsuccessful (DeShetler Complaint ¶¶ 210-15; Sheets Complaint ¶¶ 181-90). UAW "refused to process any grievance concerning Plaintiffs' [treatment] once it escalated beyond the early stages of the process where the local shop stewards and the local union" maintained control, citing the November 2012 agreement and "its judgment that any such grievance lacked merit" as that agreement was "the best possible resolution under the circumstances" (DeShetler Complaint ¶¶ 214-15; Sheets Complaint ¶¶ 185-86).

The Indictments. Several years later, in July 2017, federal indictments against Alphons Iacobelli (FCA Vice President of Employee Relations during the fall of 2012); Monica Morgan (girlfriend/wife of General Holiefield, Vice President of UAW's FCA Division before his death in March 2015); and Jerome Durden (FCA accountant and subordinate of Iacobelli) were unsealed (DeShetler Complaint ¶¶ 222-26; Sheets Complaint ¶¶ 192-95). These Indictments and the "surrounding press coverage" revealed that Iacobelli "diverted millions of dollars from [FCA] . . . to the individual pockets of Holiefield, his family[,] and close associates" (DeShetler Complaint ¶ 226; Sheets Complaint ¶196). The Indictments do not identify any particular agreement or union action influenced by the bribes, but generally allege that the scheme continued between January 2009 and July 2015. Plaintiffs allege that Iacobelli paid these bribes to Holiefield and UAW officials "in exchange for company-friendly treatment in collective bargaining negotiations," including the New Agreement (DeShetler Complaint ¶¶ 232-33; Sheets Complaint ¶¶ 202-03).

Plaintiffs filed these actions in January 2018 -- about five and a half months after the Indictments were unsealed and five and a half years after the terminations and loss of seniority rights. Defendants move to dismiss under Federal Civil Rule 12(b)(6).

STANDARD OF REVIEW AND DOCUMENTS CONSIDERED

When ruling on a motion under Federal Civil Rule 12(b)(6), this Court must accept all well-pled...