Hester v. Intern. Union of Operating Engineers

• Decision Date: 12 June 1987
• Docket Number: No. 85-7699.,85-7699.
• Parties: Edward C. HESTER, Plaintiff-Appellant, v. INTERNATIONAL UNION OF OPERATING ENGINEERS, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

818 F.2d 1537

Edward C. HESTER, Plaintiff-Appellant, v. INTERNATIONAL UNION OF OPERATING ENGINEERS, et al., Defendants-Appellees.

No. 85-7699.

United States Court of Appeals, Eleventh Circuit.

June 12, 1987.

C.V. Stelzenmuller, Birmingham, Ala., for plaintiff-appellant.

James T. Langford, Atlanta, Ga., for International Union.

Donald R. Rhea, Rhea, Boyd & Rhea, Gadsden, Ala., for International Union-Local 320.

Thomas N. Crawford, Jr., Birmingham, Ala., for International Union-Local 660.

Before TJOFLAT and KRAVITCH, Circuit Judges, and TUTTLE, Senior Circuit Judge.

PER CURIAM:

I.

The appellant in this case, Edward C. Hester, is a member of the International Union of Operating Engineers (IUOE) and its Local 320. He is a crane operator. Local 320 represents Hester and other heavy equipment operators engaged in construction work for employers in northern Alabama, including the Tennessee Valley Authority (TVA), a corporation wholly owned by the federal government.

Appointments to union jobs with TVA are restricted in two relevant ways. First, IUOE's collective bargaining agreement with TVA contains a provision giving preference in hiring decisions to veterans over non-veterans, and to disabled veterans over non-disabled veterans.¹ Second, IUOE's constitution prohibits a member of one local from working within the jurisdiction of another local without the latter local's consent.²

Hester was employed by TVA at its Yellow Creek facility in Iuka, Mississippi, which is within Local 320's jurisdiction. In the summer of 1983, TVA began laying off workers, including Hester, who was replaced by a disabled veteran. Hester, a non-disabled veteran, then asked TVA to place his name on its veterans' preferential hiring list.

Soon thereafter, in August of 1983, TVA needed a crane operator at its Brown's Ferry site in Athens, Alabama, which is in the jurisdiction of another local, Local 660.³ Local 660 referred a non-veteran to TVA from its hiring hall. TVA rejected that candidate and, pursuant to the collective bargaining agreement, looked to the veterans' preferential hiring list. TVA hired Hester.

On September 15, 1983, Local 660 initiated disciplinary proceedings against Hester for working within its jurisdiction without its consent. On November 8, 1983, Hester was found guilty in a Local 660 trial and was fined $3,000. Two days later, Hester appealed his fine to IUOE, which "waived" the fine pending the outcome of his appeal. On August 6, 1984, IUOE denied Hester's appeal but reduced his fine from $3,000 to $500. Local 320 then wrote a letter on September 5, 1984 to Hester explaining that IUOE's constitution would not permit it to accept his membership dues until he paid the $500 fine.⁴

On November 7, 1984, Hester filed suit in the district court against IUOE, Local 320, and Local 660. He alleged three causes of action: (1) the fine that IUOE and Local 660 imposed, and Local 320's refusal to accept his dues, were disciplinary actions in violation of the safeguards against improper disciplinary action provided by the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 411(a)(5) (1982);⁵ (2) IUOE breached its duty of fair representation when it affirmed a fine against Hester for exercising his right, under IUOE's collective bargaining agreement with TVA, to receive preference as a veteran; (3) Local 660 violated that collective bargaining agreement when it did not honor the veterans' preference provision. Hester later amended his complaint to add a pendent state law claim based on Alabama contract law.

IUOE, Local 320, and Local 660 each filed motions for summary judgment, asserting that Hester's causes of action were barred by the six-month statute of limitations found in 29 U.S.C. § 160(b) (1982).⁶ The district court granted the motions for summary judgment, concluding that "Hester is barred from litigating his claims in federal court because this court lacks subject matter jurisdiction." As to Hester's first and third causes of action, the court reasoned that because Hester's employer, an entity of the federal government, "is not subject to the LMRDA," 29 U.S.C. § 402(e) (1982), the protections afforded by that Act do not apply to Hester's relationship with his union and its locals; in other words, for the LMRDA to apply to either the employer or the union, both the employer and the union must be subject to the Act. The court similarly dismissed Hester's duty of fair representation claim, concluding that because neither TVA nor IUOE is subject to LMRDA, it would not imply from the Act a duty of fair representation to TVA employees. The court also dismissed Hester's pendent state law claim, in light of its finding that it was without subject matter jurisdiction. As a final matter, the court declined to discuss the statute of limitations defense.

II.

We begin our analysis of whether there is subject matter jurisdiction in this case by examining the Act's design. The Act is a piece of remedial legislation, a major purpose being "to protect union members against possible overreaching by union officials." In re Gopman, 531 F.2d 262, 266 (5th Cir.1976) (citation omitted).⁷ Fostering union democracy is one way the Act protects union members. By establishing a "bill of rights," the Act guarantees "each union member protection against infringement of his rights to vote, to meet, and to participate in discussions on matters of concern to him and his union." Navarro v. Gannon, 385 F.2d 512, 518 (2d Cir.1967), cert. denied, 390 U.S. 989, 88 S.Ct. 1184, 19 L.Ed.2d 1294 (1968). Essential to that protection are the due process safeguards the Act provides against improper disciplinary action. See 29 U.S.C. § 411(a)(5) (1982).⁸

This design reveals that the focus of the Act is on controversies between a worker and his union, not on the relationship between a union member and his employer. See Burns v. United Bhd. of Carpenters, Local No. 626, 204 F.Supp. 599, 601 (D.Del.1962) ("It is abundantly clear that the ... Act only concerns controversies between a member and the Union to which he belongs."). We believe that the district court's analysis of its subject matter jurisdiction was faulty because it asked whether the employer in this case was subject to the Act, when the Act's bill of rights does not apply to employers. The operative question on which the district court should have focused is whether IUOE and its locals are labor organizations subject to the LMRDA. As we discuss below, that question cannot be resolved solely by determining whether the employer for whom the union member happens to be working satisfies the Act's definition of employer.

A.

"Labor organization" is defined by the LMRDA, 29 U.S.C. § 402(i) (1982), as follows:

"Labor organization" means a labor organization engaged in an industry affecting commerce and includes any organization of any kind, any agency, or employee representation committee, group, association, or plan so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment....

One of the components of this definition is that the organization of employees must exist for the purpose of dealing with employers⁹: "a labor organization is not covered unless it represents, or is chartered to represent, or is actively seeking to represent `employees' of an `employer' as these terms are defined in the act." Smith, The Labor-Management Reporting and Disclosure Act of 1959, 46 Va.L.Rev. 195, 199 (1960).¹⁰ The LMRDA expressly excludes, as an "employer," the United States and its corporations, such as the TVA: "`employer' ... does not include the United States or any corporation wholly owned by the Government of the United States...." 29 U.S.C. § 402(e) (1982).¹¹

Although government-owned corporations are excluded from the definition of employer, we nevertheless read the definition of "labor organization" to include those associations of workers that deal with any "employer," as defined by the Act. In other words, labor unions that are "mixed" — unions representing employees working for private employers, as well as employees working for the federal government or government-owned corporations — are "labor organizations," and thus are subject to the LMRDA. See National Educ. Assoc. v. Marshall, 100 L.R.R.M. (BNA) 2565, 85 Lab.Cas. (CCH) ¶ 11,172 (D.D.C.1979) Available on WESTLAW, DCT database (association consisting mostly of public sector workers is "labor organization" under the LMRDA because it permitted private sector employees to join and represented those employees in negotiations with private employers). Labor unions that exclusively represent employees working for the federal government or government-owned corporations, on the other hand, are not "labor organizations," and thus are not subject to the LMRDA. See Local 1498, Am. Fed'n of Gov't Employees v. American Fed'n of Gov't Employees, 522 F.2d 486, 484-90 (3d Cir.1975) (union not subject to LMRDA, because union "limits its membership to, and represents only, federal government employees in their dealings with the federal government"); New Jersey County & Mun. Council # 61, Am. Fed'n of State, County & Mun. Employees v. American Fed'n of State, County & Mun. Employees, 478 F.2d 1156, 1159 (3d Cir.) ("Public employee unions are not covered by LMRDA, because ... these unions are not `labor organizations' under the Act."), cert. denied, 414 U.S. 975, 94 S.Ct. 290, 38 L.Ed.2d 218 (1973); Smith, The Labor-Management Reporting and Disclosure Act of 1959, 46 Va.L.Rev. 195, 200 (1960) ("A union exclusively representing or seeking to represent only employees of a ... governmental employer, is not covered by LMRDA."). This interpretation of the statutory definitions is in complete accord with the regulations of the Department of Labor:

PART 451 — LABOR

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