Diaz v. Schwerman Trucking Co.

• Decision Date: 30 June 1983
• Docket Number: No. 81-5667,81-5667
• Parties: 113 L.R.R.M. (BNA) 3793, 98 Lab.Cas. P 10,311 Bienvenido DIAZ, et al., Plaintiffs-Appellees, v. SCHWERMAN TRUCKING COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1371

709 F.2d 1371

113 L.R.R.M. (BNA) 3793, 98 Lab.Cas. P 10,311

Bienvenido DIAZ, et al., Plaintiffs-Appellees, v. SCHWERMAN TRUCKING COMPANY, Defendant-Appellant.

No. 81-5667.

United States Court of Appeals, Eleventh Circuit.

June 30, 1983.

Hogg, Allen, Ryce, Norton & Blue, Donald T. Ryce, Jr., Barry Jay Warsch, Coral Gables, Fla., for defendant-appellant.

Harold Bronstein, Coconut Grove, Fla., for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before TJOFLAT, CLARK and MILLER ^*, Circuit Judges.

PER CURIAM:

In this case, Schwerman Trucking Company (Schwerman) appeals the district court's summary enforcement of an arbitration award made under a collective bargaining agreement. ¹ We vacate the district court's enforcement order and remand the case for further proceedings because a critical factual issue remains to be litigated.

Schwerman is a Miami based trucking firm. It is bound by a collective bargaining agreement that provides, inter alia, that Schwerman will not decrease the hauling rates paid employees. The agreement also provides that all employee grievances involving the collective bargaining agreement are to be settled by Schwerman and the employee's collective bargaining representative, Teamsters Local Union No. 769 (Union), and if settlement is not possible, by arbitration. Despite the first of the provisions stated above, on May 24, 1978, Schwerman unilaterally reduced the hauling rates paid some employees. The employees objected to these new rates and attempted, through the Union, to settle the grievance. Schwerman and the Union could not settle the dispute so they referred the matter to an arbitrator.

On May 15, 1979, the arbitrator rendered his decision, holding simply that the employees' "grievance is sustained and that the relief sought by the Union is granted." Schwerman responded to this decision by agreeing to pay the employees, henceforth, the proper hauling rates. Schwerman refused, however, to compensate the employees fully for the losses they had sustained since May 24, 1978, the date it improperly reduced the hauling rates. Schwerman relied on Article VIII, Section 1(b), of the collective bargaining agreement to justify this refusal. This section provides in pertinent part: "In the event final disposition of any grievance takes more than thirty days (30) from the day of occurrence, and any arbitral award is issued proving [sic] for back wages, the [employees] involved shall never be entitled to an amount exceeding thirty days of pay." Schwerman argued that this provision limited its back pay liability to the thirty-day period immediately preceding the date of the arbitral award. Therefore, Schwerman offered to adjust the hauling rates paid employees only for that thirty-day period.

The Union objected to this interpretation of the provision, however, arguing that the provision limited Schwerman's liability for back pay to an amount equal to thirty days pay, regardless of the time period the back pay covers. After some discussion of the matter, Schwerman and the Union settled their dispute, agreeing that Schwerman would extend the back pay award to October 12, 1978, the date that the Union filed the employees' grievance. Several employees of Schwerman objected to this interpretation of the arbitration award, however, and brought this suit in the district court against Schwerman to enforce the arbitration award effective May 24, 1978. They alleged that the court had subject matter jurisdiction of their case under section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185 (1976). ² The employees did not join the Union as a party defendant in the suit, but instead merely alleged in the complaint that they had

requested that [the Union] enforce their rights pursuant to the arbitration award, but [the Union's] action or lack of action on behalf of the [employees] has been arbitrary, capricious, discriminatory, and in bad faith, and in violation of the statutory duty of fair representation owed the [employees] by their collective bargaining representative.

When Schwerman denied liability, the parties commenced discovery.

During discovery, the parties filed a joint pretrial stipulation that stated that the only issue of fact to be litigated at trial was whether Schwerman had paid the employees the back pay due under the arbitrator's decision. The joint pretrial stipulation also stated that five issues of law remained for the court's determination. These issues of law were: (1) whether the district court has subject matter jurisdiction of the complaint; (2) whether the employees have standing under 29 U.S.C. Sec. 185 (1976) to compel enforcement of the arbitrator's decision; (3) whether the district court should dismiss the complaint pursuant to Rule 19, Fed.R.Civ.P., for failure to join an indispensable party, the Union; (4) whether the employees have individually or collectively stated a claim upon which relief may be granted; and (5) whether Gilberto Gonzalez (an employee and one of the plaintiffs) is entitled to payment under the arbitrator's decision.

On November 17, 1980, the district court held a pretrial conference, during which the issues raised in the joint pretrial stipulation apparently were discussed. ³ On December 19, 1980, the district court referred the matter to the arbitrator so that he could clarify the time frame covered by his back-pay award. On February 9, 1981, the arbitrator issued his response, stating that it was his intention "that back pay was to be granted to the date that [Schwerman] unilaterally deviated from the past form of compensation, that is on or about May 24, 1978." With this clarification, the district court, on March 11, 1981, sua sponte issued an order enforcing the award.

Schwerman appealed that order, contending that the district court erred in entering the final order sua sponte, without holding a trial or deciding the five issues of law stated in the parties' pretrial stipulation. Because the district court, in its final order, did not explicitly resolve these issues of law or indicate elsewhere in the record that it had resolved them, we remanded the case to the district court for the limited purpose of deciding these issues. The district court having entered these decisions and forwarded them to this court, and the parties having had the opportunity to file supplemental briefs on these decisions, we are now able to address Schwerman's arguments concerning four of these issues, ⁴ as well as its argument that the district court improperly entered the enforcement order without holding a trial.

Schwerman's first contention is that the district court lacked subject matter jurisdiction of the employees' suit under section 301 of the LMRA. Section 301, which provides for suits in the district court between labor organizations and employers for violation of collective bargaining agreements, also allows suits, based on such a violation, by and against employees. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562, 96 S.Ct. 1048, 1055, 47 L.Ed.2d 231 (1976). "[C]ontrary to earlier indications Sec. 301 suits encompass those seeking to vindicate 'uniquely personal' rights of employees such as wages...." Id. (quoting Smith v. Evening News Association, 371 U.S. 195, 198-200, 83 S.Ct. 267, 269-70, 9 L.Ed.2d 246 (1962)). Since the employees' suit is clearly founded upon a breach of the collective bargaining agreement and involves wages, a matter Hines and Smith expressly held to be a proper subject of an employees' section 301 suit, we affirm the district court's holding that subject matter jurisdiction existed under section 301.

Schwerman next contends that the employees do not have standing to bring this action. To prove standing, however, the employees need show only that they "personally would benefit in a tangible way from the court's intervention." Warth v. Seldin, 422 U.S. 490, 508, 95 S.Ct. 2197, 2210, 45 L.Ed.2d 343 (1975); see Santos v. District Council, 547 F.2d 197, 199-200 (2d Cir.1977). We believe that the employees have sufficiently shown such a benefit. If their suit succeeds, the employees will recover back pay. A more tangible benefit is difficult to imagine. We affirm, therefore the district court's holding that the employees have standing to maintain this action.

Schwerman's third contention is that the district court improperly denied its Rule 19, Fed.R.Civ.P., ⁵ motion to dismiss for failure to join an indispensable party, the Union. We again affirm the district court's ruling. This action is, in essence, an action by the employees against their employer for back pay. In such a suit, the Union cannot be considered an indispensable party. For without joining the Union, the employees can nonetheless be accorded the relief they seek from Schwerman, with no Union interest impaired, and without forcing Schwerman to face the risk of inconsistent obligations. Therefore, joinder of the Union is not necessary for just adjudication of this action. Moreover, we note that the Supreme Court has implicitly recognized this holding in Vaca v. Sipes, 386 U.S. 171, 186-87, 87 S.Ct. 903, 914-15, 17 L.Ed.2d 842 (1967), when it held that an employee, seeking enforcement of rights accorded him under a collective bargaining agreement, could sue the employer and union in separate actions. Accord, United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 73, 101 S.Ct. 1559, 1569 n. 2, 67 L.Ed.2d 732 (1981) (Stevens, J., concurring in part and dissenting in part).

Schwerman's final two contentions are that the employees' complaint failed to state a claim for relief, and that the district court committed reversible error in sua sponte enforcing the arbitrator's award without holding a trial. "In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it...