International Ass'n of Machinists and Aerospace Workers v. Tennessee Valley Authority

• Decision Date: 12 March 1997
• Docket Number: No. 95-6706,AFL-CI,D,95-6706
• Parties: 154 L.R.R.M. (BNA) 2677, 133 Lab.Cas. P 11,784 INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, Plaintiff-Appellant, v. TENNESSEE VALLEY AUTHORITY, Tennessee Valley Trades and Labor Council, and Building and Construction Trades Department,efendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 658

108 F.3d 658

154 L.R.R.M. (BNA) 2677, 133 Lab.Cas. P 11,784

INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, Plaintiff-Appellant, v. TENNESSEE VALLEY AUTHORITY, Tennessee Valley Trades and Labor Council, and Building and Construction Trades Department, AFL-CIO, Defendants-Appellees.

No. 95-6706.

United States Court of Appeals Sixth Circuit.

Argued Nov. 19, 1996.

Decided March 12, 1997.

Charles W. Van Beke (briefed), Herbert S. Sanger, Jr., General Counsel (argued and briefed), Wagner, Myers & Sanger, Knoxville, TN, for plaintiff-appellant.

A. Jackson Woodall (argued and briefed), Justin M. Schwamm, Sr., Asst. Gen. Counsel, Thomas F. Fine, Sr., Litigation Atty. (briefed), Linda J. Sales-Long (briefed), Tennessee Valley Authority, Knoxville, TN, for Tennessee Valley Authority.

Robert Jan Jennings, Branstetter, Kilgore, Stranch & Jennings, Nashville, TN, Richard M. Resnick (briefed), Martin J. Crane (argued), Sherman, Dunn, Cohen, Leifer & Yellig, Washington, DC, for Tennessee Valley Trades and Labor Council, Building and Const. Trades Council, AFL-CIO.

Before KENNEDY, JONES, and BOGGS, Circuit Judges.

BOGGS, Circuit Judge.

The plaintiff below, the International Association of Machinists and Aerospace Workers ("IAM"), appeals the dismissal of its complaint by the district court, which determined that all of IAM's federal claims were time barred, and that any state claims were preempted by federal law. For the reasons discussed below, we affirm.

I. Facts

On May 9, 1991, the Tennessee Valley Authority ("TVA") entered into a "Project Maintenance and Modifications Agreement" ("Project Agreement") with the Tennessee Valley Trades and Labor Council ("Council"), an organization comprised at that time of fifteen unions, including IAM, whose members were employed by the TVA. The Project Agreement governed the use of union labor by the TVA's contractors, and those contractors were also required to sign the agreement. Shortly after entering into the agreement, several of those contractors proceeded to employ members of the United Brotherhood of Carpenters and Joiners of America ("Carpenters") for power plant maintenance work. Members of IAM traditionally had performed such work directly for the TVA, and IAM interprets the Project Agreement to require the contractors to follow the TVA's historical staffing practices.

Accordingly, IAM filed five grievances against a total of thirty-three contractors, alleging that they had breached the Project Agreement by failing to hire IAM members. Under the terms of the Project Agreement, grievances are heard by the Joint Administrative Committee ("JAC"), which is comprised of representatives from the TVA, its contractors, and the Council. The JAC unanimously rejected each grievance, determining in each instance that the contractors were not bound by the TVA's prior practice and that they had not violated the Project Agreement. ¹ IAM requested arbitration for the first four grievances. The JAC denied each of those requests, pursuant to its interpretation of the Project Agreement that arbitration is not available for unanimous JAC decisions. ² IAM did not file an arbitration request for its fifth grievance.

On October 1, 1993, IAM brought suit in the United States District Court for the Middle District of Tennessee against three defendants: the TVA, the Council, and the Building and Construction Trades Department of the AFL-CIO ("BCTD"), a national organization of trade unions to which most members of the Council, including the Carpenters but not including IAM, belong. ³ The complaint, as amended, alleged breach of contract against the TVA and the Council; inducement of breach of contract against the TVA and the BCTD; and breach of fiduciary duty against the Council. The complaint sought damages, specific performance either in the form of substantive relief or in the form of an order to submit the dispute for arbitration, and a declaratory judgment.

The district court dismissed the complaint as time barred. The court applied DelCostello v. International Bhd. of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), to hold that the six-month statute of limitations under the National Labor Relations Act ("NLRA"), 29 U.S.C. § 160(b), governed each of IAM's claims. The court further determined that the statute began to run, at the latest, on October 2, 1992, the date on which the JAC refused to submit IAM's fourth and largest grievance for arbitration.

IAM raises four arguments on appeal. First, it argues that this court should not import the DelCostello statute of limitations to a case involving the TVA, which is exempt from the NLRA, see 29 U.S.C. § 152(2), but should instead apply the Tennessee three-year statute of limitations for breach of contract actions. Second, it argues that the statute did not begin to run until November 2, 1993, the date on which the JAC rejected its fifth and final grievance. Third, it argues that, even if its breach of contract and breach of fiduciary duty claims are barred, its inducement of breach claims survive because they arise solely under state law. Finally, it argues that its request for a declaratory judgment is not barred. We discuss each of these arguments in turn.

II. Breach of Collective Bargaining Agreement and Breach of Duty of Fair Representation Claims

A. Which Statute of Limitation Applies

Too often, Congress creates a federal cause of action, but neglects to provide a statute of limitations for that claim. ⁴ When a court is required to determine the limitations period applicable to such a claim, it engages in an inquiry into Congressional intent. The usual practice of the federal courts has been to apply the forum state's statute of limitations for the state law claim that provides the closest analogy to the federal cause of action. "Because this penchant to borrow from analogous state law is not only longstanding, but settled," North Star Steel Co. v. Thomas, 515 U.S. 29, ----, 115 S.Ct. 1927, 1930, 132 L.Ed.2d 27 (1995) (internal citations omitted), courts ordinarily interpret Congressional silence to evince an intent to follow that practice. ⁵

However, in some circumstances, the application of the state limitations period would be "at odds with the purpose or operation of federal substantive law," or would "frustrate or interfere with the implementation of national policies." DelCostello, 462 U.S. at 161, 103 S.Ct. at 2289. In such cases, courts follow the common sense presumption that "Congress would not wish courts to apply a limitations period that would only stymie the policies underlying the federal cause of action," North Star Steel, 515 U.S. at ---- - ----, 115 S.Ct. at 1930-31, and instead apply the limitations period from an analogous federal statute, if one is available. However, the Supreme Court has cautioned that such cases are rare, and that a court should "decline to borrow a state statute of limitations only 'when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking.' " Reed v. United Transp. Union, 488 U.S. 319, 324, 109 S.Ct. 621, 625, 102 L.Ed.2d 665 (1989), quoting DelCostello, 462 U.S. at 172, 103 S.Ct. at 2294-95.

We are called upon to determine whether the application of a state limitations period to IAM's lawsuit would impede federal policies in a way similar to that which motivated the DelCostello Court to borrow a federal limitations period. In that case, a union member had filed a grievance against his employer alleging breach of a collective bargaining agreement, pursuant to the grievance procedures established by that agreement. After the grievance was rejected, the union member filed a hybrid action against the employer for the alleged breach under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and against the union for breach of its federal common law duty of fair representation in the grievance proceedings. ⁶ No federal statute provided a statute of limitations for either the LMRA claim or the federal common law claim. The Court rejected the notion that the case was directly analogous to a state law contract suit; instead, the suit amounted to "a direct challenge to the private settlement of disputes," with "no close analogy in ordinary state law." DelCostello, 462 U.S. at 165, 103 S.Ct. at 2291 (internal citations omitted). Accordingly, the Court declined to apply the three-year state statute of limitations for contract claims, as such a lengthy period would be contrary to the parties' interests in the finality of the grievance and arbitration procedures created by the collective bargaining agreement.

"[T]he grievance and arbitration procedure often processes disputes involving interpretation of critical terms in the collective-bargaining agreement affecting the entire relationship between company and union.... This system, with its heavy emphasis on grievance, arbitration, and the law of the shop, could easily become unworkable if a decision which has given meaning and content to the terms of an agreement, and even affected subsequent modifications of that agreement, could suddenly be called into question as much as [three] years later."

Id. at 169, 103 S.Ct. at 2293 (ellipses and brackets in original), quoting United Parcel Serv., Inc. v. Mitchell, 451 U.S. 56, 63-64, 101 S.Ct. 1559, 1564-65, 67 L.Ed.2d 732 (1981) (internal quotations omitted).

The Court therefore turned instead to the six-month limitations period created under § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), noting that the statute evinces a general intent that "the relatively rapid final resolution of labor disputes [is] favored by federal law," 462 U.S. at 168, 103 S.Ct. at 2292, and that the considerations relevant to the...