Hass v. Darigold Dairy Products Co.

• Decision Date: 15 January 1985
• Docket Number: No. 83-4231,83-4231
• Citation: 751 F.2d 1096
• Parties: 118 L.R.R.M. (BNA) 2530, 102 Lab.Cas. P 11,316 Gail C. HASS and Michael Hass, Plaintiffs-Appellees, v. DARIGOLD DAIRY PRODUCTS CO., and Teamsters Union, Local 66, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1096

751 F.2d 1096

118 L.R.R.M. (BNA) 2530, 102 Lab.Cas. P 11,316

Gail C. HASS and Michael Hass, Plaintiffs-Appellees, v. DARIGOLD DAIRY PRODUCTS CO., and Teamsters Union, Local 66 Defendants-Appellants.

No. 83-4231.

United States Court of Appeals Ninth Circuit.

Submitted Oct. 2, 1984.

Decided Jan. 15, 1985.

Robert Stevenson, Seattle, Wash., for plaintiffs-appellees.

Herman L. Wacker, Davies, Roberts, Reid, Anderson & Wacker, Seattle, Wash., for defendants-appellants.

Appeal from the United States District Court for the Western District of Washington.

Before FERGUSON and NELSON, Circuit Judges, and JAMESON, ^* District Judge.

NELSON, Circuit Judge:

Darigold Dairy Products Company ("Darigold") and Teamsters Union, Local 66 (the "Union") appeal from a judgment reinstating the original date-of-hire seniority of Gail Hass, an employee of Darigold and member of the Union, in accordance with the collective bargaining agreement between the Union and Darigold. After receiving assurances from Union representatives that she would not lose seniority if she transferred from full-time to part-time status, Mrs. Hass made such a change for health reasons. When she later returned to full-time status, she discovered that she had been stripped of her original seniority position. The Union refused to process Mrs. Hass' grievance. We affirm the district court's reinstatement of seniority.

FACTUAL AND PROCEDURAL BACKGROUND

Local 66 represents Darigold employees, including appellee Gail Hass, and in that capacity has been party to collective bargaining agreements with Darigold, a Washington corporation. Appellee began working for Darigold, as a full-time employee, in November 1968. In early 1979, however, she investigated the possibility of switching to part-time status within her department, for health reasons (high blood pressure). Concerned that she might thereby forfeit her date-of-hire seniority standing, Mrs. Hass spoke to the chief executive officer of the Union local, its Secretary-Treasurer, who advised her that she would not lose her seniority if she switched to part-time.

Appellee began working part-time on July 1, 1979. In May, 1981, however, Mrs. Hass transferred back to full-time status. Upon hearing rumors that she had lost her seniority, and had been placed at the bottom of the full-time seniority list, appellee wrote a letter in June 1981 expressing her concern to Darigold's Personnel Director. This letter was never answered. In September, Mrs. Hass received further assurances from the Union's Secretary-Treasurer that she had not lost her seniority. Yet in October, appellee was informed by her supervisor at Darigold that she had in fact lost her original date-of-hire seniority, whereupon she filed a grievance with the Union. The Union refused to process the grievance, maintaining that it did not agree with appellee that under the collective bargaining agreement she was entitled to retain her original seniority date.

Mrs. Hass filed a complaint in the Superior Court of the State of Washington in January 1982. The case was removed by the Union, pursuant to 28 U.S.C. Sec. 1441, to the United States District Court, which had jurisdiction of the action under 29 U.S.C. Sec. 185(a) and 28 U.S.C. Sec. 1331.

On August 24, 1983, less than three weeks before the commencement of trial, the Union and Darigold entered into a "Letter of Understanding" (the "Letter") which supplemented the seniority provisions of the collective bargaining agreement then in force. The amendment, in its general outline, had been endorsed overwhelmingly by the bargaining unit employees at a Union meeting held earlier that month. A central provision of the Letter was as follows (emphasis in original):

2. Separate seniority lists shall be established for full-time and part-time employees. "Seniority" for purposes of layoff and recall, and for other purposes provided herein shall be established based on the date upon which each employee last assumed their full-time (or part-time) status...

On September 12, 1983, the matter was brought to trial, after which the district court ordered that appellee's seniority be reinstated as of her original date of hire, November 8, 1968. This appeal followed. Our jurisdiction derives from 28 U.S.C. Sec. 1291.

ISSUES PRESENTED

1. Did the Letter of Understanding between the Union and Darigold render plaintiff-appellee's action moot?

2. If not, did the district court clearly err in finding, in the course of its interpretation of the bargaining agreement and Mrs. Hass' rights thereunder, that there was no past practice or custom at Darigold with respect to the seniority question posed by appellee's situation?

DISCUSSION

I. MOOTNESS

Appellants contend that the Letter of Understanding, which amended the collective bargaining agreement shortly before trial, rendered Mrs. Hass' claim moot. They argue that even if under the pre-Letter bargaining agreement Mrs. Hass was entitled to reinstatement of her original date-of-hire seniority, and even if the Letter represented an entirely new treatment of seniority not supported by prior custom or practice, the Letter properly and lawfully modified the pertinent seniority provisions such that Mrs. Hass, like all the office employees in the bargaining unit, became subject to the new seniority rules. These new rules, appellants insist, precluded the district court from lawfully reinstating Mrs. Hass' original seniority position.

This argument is without merit. Appellants, by virtue of their representations to Mrs. Hass that she would not lose seniority, were estopped from instituting such a change in seniority rules with respect to Mrs. Hass and those changes in her employment status which are under scrutiny in this case.

A. Standard of Review

The meaning of the Letter of Understanding is not in dispute. The only question concerns the legal effect of the Letter upon the parties and upon their litigation, and because this is purely a question of law, it is reviewable de novo on appeal. See United States v. McConney, 728 F.2d 1195 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

B. Analysis

"A case is moot when the issues presented are no longer 'live' or the parties lack a legally cognizable interest in the outcome." Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 1950, 23 L.Ed.2d 491 (1969), quoted in Murphy v. Hunt, 455 U.S. 478, 481, 102 S.Ct. 1181, 1183, 71 L.Ed.2d 353 (1982). An "actual controversy must be extant at all stages of review, not merely at the time the complaint is filed." Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975) (quoting Steffel v. Thompson, 415 U.S. 452, 459 n. 10, 94 S.Ct. 1209, 1216 n. 10, 39 L.Ed.2d 505 (1974)). We must decide whether the Letter validly modified the seniority rules pertaining to Mrs. Hass' changes from full-time to part-time and back again such that her action for seniority reinstatement under the collective bargaining agreement became moot.

It is quite well established in this Circuit that seniority rights are creations of the collective bargaining agreement, and so may be revised or abrogated by later negotiated changes in this agreement. Employee seniority rights are not "vested" property rights which lie beyond the reach of subsequent union-employer negotiations conducted in the course of their evolving bargaining relationship. See ILWU v. Kuntz, 334 F.2d 165, 171 (9th Cir.1964); Hardcastle v. Western Greyhound Lines, 303 F.2d 182 (9th Cir.) (relying upon Ford Motor Co. v. Huffman, 345 U.S. 330, 73 S.Ct. 681, 97 L.Ed. 1048 (1953)), cert. denied, 371 U.S. 920, 83 S.Ct. 288, 9 L.Ed.2d 229 (1962); see also Green v. Los Angeles Stereotypers Union No. 58, 356 F.2d 473, 475 (9th Cir.1966). Accord, e.g., Cooper v. General Motors Corp., 651 F.2d 249 (5th Cir.1981); Local 1251 UAW v. Robertshaw Controls Co., 405 F.2d 29 (2nd Cir.1968) (en banc); Charland v. Norge Division, Borg-Warner Corp., 407 F.2d 1062 (6th Cir.), cert. denied, 395 U.S. 927, 89 S.Ct. 1786, 23 L.Ed.2d 245 (1969). A union thus may renegotiate seniority provisions of a collective bargaining agreement, even though the resulting changes are essentially retroactive or affect different employees unequally. See Kuntz, 334 F.2d at 171; Hardcastle, 303 F.2d at 184-85, 187; Ford Motor Co. v. Huffman, 345 U.S. 330, 73 S.Ct. 681, 97 L.Ed. 1048 (1953).

Nevertheless, such bargaining discretion is not without limit. For one thing, a union, as representative of all of its members, has a duty of fair representation to each, which obligates it to "make an honest effort to serve the interests of all of those members, without hostility to any." Id. at 337, 73 S.Ct. at 685. Differences are to be tolerated in the manner and degree to which the terms of any negotiated agreement affect individual employees, as long as the bargaining representative acts with "complete good faith and honesty of purpose in the exercise of its discretion," id. at 338, 73 S.Ct. at 686, and its conduct toward any member of the bargaining unit is not "arbitrary, discriminatory, or in bad faith." Vaca v. Sipes, 386 U.S. 171, 190, 87 S.Ct. 903, 916, 17 L.Ed.2d 842 (1967).

The equitable doctrine of estoppel provides another constraint on the freedom of bargaining representatives and employers. Estoppel principles are applicable in actions arising under federal law. See, e.g., Heckler v. Community Health Services of Crawford County, Inc., --- U.S. ----, 104 S.Ct. 2218, 2223-27, 81 L.Ed.2d 42 (1984); Jablon v. United States, 657 F.2d 1064, 1067-70 (9th Cir.1981). In particular, "[t]he doctrine of estoppel is accepted in labor relations ... cases." Terones v. Pacific States Steel Corp., 526 F.Supp. 1350, 1356 (N.D.Cal.1981); see also, e.g., Bob's Big Boy Family Restaurants v. NLRB, 625 F.2d 850, 853-54 (9th Cir.1980); Amalgamated Clothing and Textile Workers Union v. Ratner Corp., 602 F.2d 1363, 1370 (9th Cir.1979)....