In re Abf Freight System, Inc., Labor Contract, MDL No. 1120.

• Court: U.S. District Court — District of Maryland
• Writing for the Court: Alexander Harvey, Ii
• Citation: In re Abf Freight System, Inc., Labor Contract, 988 F.Supp. 556 (D. Md. 1997)
• Decision Date: 03 December 1997
• Docket Number: MDL No. 1120.
• Parties: In re ABF FREIGHT SYSTEM, INC., LABOR CONTRACT LITIGATION.

988 F.Supp. 556

In re ABF FREIGHT SYSTEM, INC., LABOR CONTRACT LITIGATION.

MDL No. 1120.

United States District Court, D. Maryland.

December 3, 1997.

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Joseph S. Kaufman and Schulman & Kaufman, LLC, Baltimore, MD, for Gorge plaintiffs.

J. Bruce Maffeo and Seiff & Kretz, New York City, for Alverson and Mittelstadt plaintiffs.

John D. Corrigan and O'Malley & Harvey, Boston, MA, for Ryder plaintiffs.

Robert E. Ballard and Powell, Trachtman, Logan, Carrle, Bowman & Lombardo, P.C., King of Prussia, PA, for Kleiner plaintiffs.

Joseph E. Santucci, Jr., Alissa A. Horvitz and Morgan, Lewis & Bockius, LLP, Washington, DC, for defendant ABF Freight System, Inc.

James A. McCall, Washington, DC, for International Brotherhood of Teamsters defendants.

Steven K. Hoffman, James & Hoffman, P.C., Washington, DC, for defendant Teamsters Local 557.

ALEXANDER HARVEY, II, Senior District Judge.

In this multidistrict litigation, five civil actions have been coordinated and consolidated for pretrial purposes in this Court pursuant to 28 U.S.C. § 1407. Gorge, et al. v. Carey, et al., Civil No. H-96-813, was filed in this Court on March 18, 1996. In that case, employees of ABF Freight System, Inc. ("ABF" or "the Company") sued the Company, the International Brotherhood of Teamsters (the "IBT" or the "International Union"), certain officers of the IBT and one of its Locals. As a result of certain corporate transactions which occurred in 1995 and which involved ABF, its parent and two competing trucking companies, the plaintiffs in Gorge were either laid off or lost their seniority. Plaintiffs in Gorge are members of Teamsters Local 557 of the IBT, and they have claimed in their complaint that defendant ABF breached the collective bargaining agreement between it and the IBT and that the IBT and Local 557 violated the duty of fair representation owed by them to their members under Section 301 of the Labor Management Relations Act (the "LMRA"), 29 U.S.C. § 185. Besides ABF, the IBT and Local 557, the complaint named as additional defendants Ronald Carey, General President of the IBT and Dennis Skelton, International Vice President of the IBT. Defendant Carey serves with defendant Skelton as Co-Chairmen of the Teamsters National Freight Industry Negotiating Committee (the "TNFINC").

Similar suits had been or were later instituted by other employees of ABF against these same defendants in other federal courts.¹ Mittelstadt, et al. v. Carey, et al., Civil No. 96-377, was filed in the Eastern District of New York in January of 1996. Alverson, et al. v. ABF Freight System, Inc., et al., Civil No. 96-459, was instituted in the Northern District of New York in March of 1996. Ryder v. International Brotherhood of Teamsters, et al., Civil No. 96-10577, was brought in the District of Massachusetts in March of 1996, and Kleiner, et al. v. Carey, et al., Civil No. 96-4305, was instituted in the Eastern District of Pennsylvania in June of 1996.

By Order dated July 29, 1996, the Judicial Panel on Multidistrict Litigation transferred the Mittelstadt, Alverson and Ryder cases to this District for coordinated or consolidated pretrial proceedings with the Gorge case pursuant to 28 U.S.C. § 1407. The cases were assigned to Judge Frank A. Kaufman of this Court. By later Order dated January 30, 1997, the Panel transferred the Kleiner case to this Court and assigned that case to Judge Kaufman for coordinated or consolidated pretrial proceedings with the other four actions.² In all five pending cases, the plaintiffs seek a judgment restoring their lost seniority rights as well as back pay, damages and other relief.³

Following a lengthy period of discovery, the parties have now filed dispositive motions. Presently pending in these consolidated cases are the following:

(1) The motion of the Gorge plaintiffs for partial summary judgment;

(2) The motion of defendant ABF for summary judgment;

(3) The motion for summary judgment of the International Union defendants;

(4) The renewed motion for summary judgment of defendant Local 557;⁴

(5) The motion for summary judgment of defendant ABF against the Kleiner plaintiffs on statute of limitations grounds; and

(6) The motion for summary judgment of the International Union defendants against the Kleiner plaintiffs on statute of limitations grounds.

The Court has now had an opportunity to consider the lengthy memoranda and the voluminous exhibits submitted by the parties in support of and in opposition to these six pending motions. A massive record has been presented to the Court and lengthy oral argument has been heard. For the reasons to be stated herein, the Court has concluded that the motion for partial summary judgment of the Gorge plaintiffs must be denied and that the motions for summary judgment of the International Union defendants, of defendant ABF and of Local 557 must all be granted.⁵ Summary judgment accordingly will be entered in favor of all defendants in all five pending cases.

I Background Facts

Defendant ABF is a multi-regional common carrier of freight. Its drivers, dock employees and certain other employees are represented by various local unions affiliated with the International Brotherhood of Teamsters. ABF and the local unions are parties to the National Master Freight Agreement ("NMFA"), which is a collective bargaining agreement governing the terms and conditions of employment for over 100,000 persons working nationwide in the unionized freight industry. The NMFA consists of an overall national agreement and thirty-two regional supplements.⁶

In July of 1995, Arkansas Best Corporation ("ABC"), the parent of defendant ABF, decided to acquire all of the outstanding stock of WorldWay, Inc. ("WorldWay"). A holding company known as ABC Acquisition Corp. was then created, and the outstanding stock of WorldWay was acquired by the holding company. WorldWay was the parent of Carolina Freight Carriers Corporation ("Carolina") and Red Arrow Freight Lines ("Red Arrow"), and steps were undertaken after ABC had acquired the stock of WorldWay to merge the operations of ABF, Carolina and Red Arrow.⁷ On August 11, 1995, the Interstate Commerce Commission granted ABC limited authority to operate these three corporate entities on a consolidated basis. When the stock purchase transaction had been announced in July of 1995, ABC and ABF had informed IBT of their intention to combine freight operations of the three subsidiary corporations and close various terminals. As a result, questions arose concerning the seniority of employees of the three ABC subsidiaries. Under the NMFA, the combining of operations and the closing of terminals could not be accomplished until ABF had secured union approval for these changes.

There were two possible approaches which ABF and the International Union could take for determining the seniority of the employees of the three merged companies. Employees of all companies could be "dovetailed" so that the seniority of each employee would be recognized based on the employee's date of hire and without regard to the corporate entity which had previously been the employer. The other possible approach was to "endtail" the various employees of the newly merged corporate entities, giving priority to the employees of ABF and placing Carolina and Red Arrow employees below the ABF employees on the assimilated seniority list. The decision eventually reached under the NMFA and its regional supplements was that all employees of the affected operating companies would be dovetailed. As a result, many employees of ABF were laid off or have been accorded less seniority than employees of Carolina. In these five civil actions, the plaintiffs claim that ABF breached the NMFA and that the IBT and Local 557 violated their duty of fair representation by not requiring that employees of Carolina be endtailed.⁸

Detailed provisions of the NMFA address the manner whereby the unions and management in the industry are required to resolve issues of seniority arising as a result of the combining of the operations of several signatory companies. If an entity is a party to a merger, the seniority of affected employees is to be determined by agreement between the employer and the unions involved. If terminals or operations of two or more companies are combined, the effects of the change must be considered and approved by a Change of Operations Committee. ABF accordingly requested the appointment of a Change of Operations Committee (the "Committee") to conduct a hearing and determine whether employees of the various merged entities should be dovetailed or endtailed. The Committee was then formed, consisting of three union representatives from each of the regions where ABF operated and three employer representatives, none of whom was an ABF employee.

Hearings before the Committee were held on September 14 and 15, 1995 in Rosemont, Illinois. Each local union affected by the proposed change of operations was given an opportunity to be heard before the Committee.⁹ The key issue for decision by the Committee was whether the seniority of the various affected employees should be determined by a dovetailing approach or by an endtailing approach. ABF had advanced a modified endtailing proposal based on a so-called "follow-the-work" principle. Officials of the IBT consistently supported dovetailing, claiming that such a result would be a fairer approach. Some of the local unions agreed with ABF's proposal while others implored the Committee to dovetail the seniority list. Local 557 represented both employees of ABF and employees of Carolina. The position of defendant Local 557 was presented by John D. Clemens, Jr., its President. Since some of the members of Local 557 would be benefited by a dovetailing approach while others would receive the benefits of endtailing, Clemens took no position on the issue. Rather, he referred the Committee to provisions of the NMFA which required...