Fulk v. United Transp. Union

• Decision Date: 08 November 1996
• Docket Number: No. 96-2849,96-2849
• Citation: 108 F.3d 113
• Parties: 154 L.R.R.M. (BNA) 2556, 133 Lab.Cas. P 11,766 Jesse FULK and Donald Cearlock, Plaintiffs-Appellants, v. UNITED TRANSPORTATION UNION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 113

108 F.3d 113

154 L.R.R.M. (BNA) 2556, 133 Lab.Cas. P 11,766

Jesse FULK and Donald Cearlock, Plaintiffs-Appellants, v. UNITED TRANSPORTATION UNION, Defendant-Appellee.

No. 96-2849.

United States Court of Appeals, Seventh Circuit.

Submitted Nov. 8, 1996. ^*

Decided Feb. 19, 1997.

James P. Baker, submitted, Springfield, IL, for Plaintiff-Appellant.

William K. Cavanagh, Cavanagh & O'Hara, Springfield, IL, Kevin C. Brodar, United Transportation Union, Cleveland, OH, for Defendant-Appellee.

Before CUMMINGS, CUDAHY, and FLAUM, Circuit Judges.

CUDAHY, Circuit Judge.

Plaintiffs Jesse Fulk and Donald Cearlock appeal a grant of summary judgment against them in their suit under § 301 of the Labor Management Relations Act case (LMRA). 29 U.S.C. § 185. Fulk and Cearlock were employees of the Norfolk & Southern Railroad (the Railroad) and were members of the United Transportation Union (the Union). This is the plaintiffs' second effort to upset a union membership vote to approve the modification of a collective bargaining agreement. ¹

At this juncture, the plaintiffs are appealing with respect to Count II. They claim that the Union's decision to conduct a membership vote craft-by-craft and district-by-district violated the Union's Constitution. The district court granted summary judgment on the grounds that the plaintiffs had not exhausted their Union grievance procedures. This issue is one for the district court to resolve in its discretion. The district court in this case, however, took an overly restrictive view of its own latitude to assess the plaintiffs' claims. We vacate and remand.

I. Factual Background

The Union represents workers employed by the Norfolk & Southern Railroad. The Railroad groups workers into several geographic districts, known as "seniority districts." The plaintiffs were members of the Springfield District. The Union membership was also divided into several, considerably larger, geographical units, known as General Committees of Adjustment (GCAs), which were in turn divided into local subcommittees. The plaintiffs were members of the same General Committee of Adjustment, which embraces several seniority districts.

This dispute arose when the Union brought up for membership vote a proposed modification of one of its agreements with the Railroad. The "crew consist" agreement, covering conductors, brakemen and yardmen, governs the size of the crew used to operate each train. The original agreement, adopted in 1984, allowed the Railroad to reduce the crew size from two brakemen and a conductor to one brakeman and one conductor as workers retired or otherwise left the Railroad's employ. As a complement to the reduction in crew size, the Railroad agreed to share, as the crews were reduced, the resulting cost savings with the workers. Whenever a train ran with only two crew members, the Railroad paid $53.25 into a "productivity fund," which was credited to the workers. A separate productivity fund was maintained for each seniority district. The amount paid into each fund depended on the number of trains in that particular district which had been operated with two-member crews.

The two modifications disputed here were negotiated in 1991. First, the crew consist agreement was to be modified to allow the Railroad to operate with one-person crews when the size of the work force within a particular seniority district had declined sufficiently. Second, the productivity funds were to be eliminated. In their place, the Railroad would make a one-time payment in December 1991 of $20,000 to each of its employees and an additional payment of $40,000 to each employee upon death, retirement or termination of employment.

The Union presented each modification separately to the membership for approval. If the membership failed to approve the modification to the crew consist agreement, the whole plan was to be abandoned. However, if the crew reduction were approved, it would go into effect whether or not the vote approved the productivity fund buyout.

The Union leadership decided to implement a different voting procedure for each of the two proposals. The reduction in crew size was put to an aggregate vote of all members of a particular GCA. Votes were tallied within each craft (conductor, brakeman and yardman). Acceptance of the proposal by a majority of each craft's workers was required to approve the new crew consist agreement. In the event, the new crew consist agreement was approved as required by each craft.

The Union leadership put the buyout vote to an independent vote in each seniority district, a smaller group than the GCAs. The result in each district would determine the fate of that district's productivity fund. The Union justified the district-by-district voting procedure for the productivity funds on the grounds that the value of the funds varied from district to district, as did the relative proportion of older workers to younger workers. Within each district, a majority of each craft was again required to approve the proposal. The results of the productivity fund buyout vote were mixed. Some districts approved and others rejected the proposal. Six hundred votes in all were cast within the GCA. Among those voters, the buyout received approval by nearly two-thirds of those voting in each craft. In the Springfield District, however, the proposal failed to carry a majority among the brakemen and therefore lost.

Plaintiffs Fulk and Cearlock complain that the seniority district-by-seniority district voting procedure violated Article 85 of the Union Constitution, which reads:

The General Chairperson must poll the entire membership holding seniority and working in the craft involved on the property by mail referendum ballot prior to signing any system agreements and be governed by the majority of votes cast.

The Union disputes the plaintiffs' interpretation of the constitution, the issue being whether the productivity fund buyout was a "system agreement."

In December 1991, the plaintiffs wrote a letter to Union President G.T. DuBose. They stated:

We ... wish to appeal the action and decision of General Chairperson K.N. Thompson, on behalf of all members adversely affected by the way the vote was handled on the productivity fund dated November 18, 1991[ ].

When the vote was counted, he allowed it to be counted on a fund to fund basis. We find nothing in the Constitution to allow the vote to be counted this way, ... as this is a system agreement and not a ... fund agreement.

President DuBose responded briefly by letter: "When changing a system or general rule, it is required that each affected craft must approve the change. In this particular case approval of both crafts (conductors and brakemen) was not obtained."

It is at this point that the current controversy arose. The plaintiffs attempted to appeal the Union's decision as expressed by its president through the Union's internal procedures, ultimately failing to navigate them successfully. The plaintiffs brought this suit against the Union under § 301 of the LMRA. 29 U.S.C. § 185. The district court granted summary judgment against the plaintiffs on the grounds that they had failed to exhaust their internal Union remedies and appeals procedure before seeking relief in the federal courts.

II. Analysis

Section 301 of the LMRA does not contain an explicit exhaustion requirement. When suing the employer or union for breach of a collective bargaining agreement, however, exhaustion is required by Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965). Exhaustion is required, in part, because the procedures prescribed by the collective bargaining agreement were themselves subject to the bargaining process. In Republic Steel the Court found that federal labor policy favored requiring employees to "afford the union the opportunity to act on [their] behalf." Id. at 653, 85 S.Ct. at 616. Exhaustion was found to "complement[ ] the union's status as exclusive bargaining representative ... [and] enhance the union's prestige with employees." Id.

In Clayton the Court addressed whether grievance procedures which were not bargained for (as in Republic Steel) but were instead created by the union in its constitution, like the one before us, also created an exhaustion requirement for the employee-plaintiff. Clayton v. Int'l Union, United Auto., Aerospace & Agric. Implement Workers of Am., et al., 451 U.S. 679, 101 S.Ct. 2088, 68 L.Ed.2d 538 (1981). The question of exhaustion of internal union procedures tends to arise in cases where the employees are suing the union instead of, or in addition to, the employer, as here. Recognizing that the procedures at issue in Republic Steel significantly differ from those procedures which are wholly a creation of the union constitution, the Court found that the policies underlying Republic Steel are not necessarily furthered by requiring an adherence to internal union appeals procedures. Clayton, 451 U.S. at 687, 101 S.Ct. at 2094. The Court found that "the policy of forestalling judicial interference with internal union affairs is [not] applicable to these cases ... involving the interpretation and application of a union constitution." Id. at 687-88, 101 S.Ct. at 2094-95. Thus, "courts have the discretion to decide whether to require exhaustion of internal union procedures" before allowing a suit under § 301 of the LMRA. Id. at 689, 101 S.Ct. at 2095. The Clayton Court set forth guidelines for the exercise of this discretion:

In exercising this discretion, at least three factors should be relevant: first, whether union officials are so hostile to the employee that he could not hope to obtain a fair hearing on his claim; second, whether the internal union appeals procedures would be inadequate either to reactivate the employee's grievance or to award him the full relief he seeks under § 301; and third, whether exhaustion of internal procedures would unreasonably delay the employee's...