Kaiser v. US Postal Service

• Decision Date: 02 March 1992
• Docket Number: No. 90-CV-71356-DT.,90-CV-71356-DT.
• Citation: 785 F. Supp. 648
• Parties: Allen C. KAISER, Plaintiff, v. UNITED STATES POSTAL SERVICE and National Rural Letter Carriers' Association, Defendants.
• Court: U.S. District Court — Western District of Michigan

785 F. Supp. 648

Allen C. KAISER, Plaintiff, v. UNITED STATES POSTAL SERVICE and National Rural Letter Carriers' Association, Defendants.

No. 90-CV-71356-DT.

United States District Court, E.D. Michigan, S.D.

March 2, 1992.

Bruce B. Elfvin, Cleveland, Ohio, for plaintiff.

Peter A. Caplan, U.S. Atty., Detroit, Mich., Anthony W. DuComb, Washington, D.C., Michael Kimber, Southfield, Mich., for defendants.

OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

ROSEN, District Judge.

I. INTRODUCTION

This matter is before the Court on the Motions to Dismiss, or in the alternative, for Summary Judgment filed by the Defendants, the United States Postal Service (the "USPS" or the "Postal Service") and the National Rural Letter Carriers' Association (the "NRLCA"). The parties have waived oral argument.

In the instant action, Plaintiff Allen C. Kaiser, a former non-rural letter carrier, challenges his reduced salary resulting from his requested transfer from a "city carrier" position to that of a "rural carrier". Plaintiff has asserted a claim under 39 U.S.C. § 1208(b) alleging that, in processing his grievance, the NRLCA breached its duty of fair representation, and that, by reducing his salary when he transferred positions, the USPS breached the collective bargaining agreement that governed his employment. He has also alleged a claim of equitable estoppel against the Postal Service, contending that because his supervisors represented to him prior to transferring that he would not experience an cut in pay, the Service is estopped from reducing his salary.¹

II. FACTUAL BACKGROUND

A. PLAINTIFF'S TRANSFER TO HIS RURAL LETTER CARRIER POSITION

Plaintiff Allen Kaiser is a United States Postal Service letter carrier. He has been employed by the USPS since 1977. Since September 1987, Kaiser's employment relationship with the Postal Service has been governed by the collective bargaining agreement (the "CBA") entered into between the USPS and the National Rural Letter Carriers Association.

Prior to September 26, 1987, Kaiser was employed by the USPS as a "city carrier". Pursuant to the city carriers' "PS schedule", Kaiser's rate of pay was at grade 5, step 0, which provided him an annual salary of $27,401.00.

In 1987, Kaiser—who had in January of that year taken and passed the rural carrier examination, and had been placed on the rural carrier eligibility roster—requested a transfer to a "rural carrier" position. He was subsequently offered, and accepted, a rural carrier position in Saline, Michigan. Upon his reassignment to the rural carrier position on September 26, 1987, Kaiser's employment became covered by the USPS/ NRLCA collective bargaining agreement.

Kaiser alleges that, prior to his transfer, USPS officials made representations to him that his salary would not be reduced as a result of his reassignment. However, following his reassignment, Kaiser's salary was reduced to $19,541.00 per year, corresponding to "Level 00, Step B" on the "RC schedule".

"Step B" is the lowest step on the RC schedule. That step was created in January 1985 as part of the "Volz award" (discussed, infra) and has been provided for in Article 9 of the USPS/NRLCA collective bargaining agreement ever since.

B. THE PROVISIONS OF ARTICLE 9.1.B.1 OF THE CBA

The circumstances giving rise to the genesis of Step B are as follows. In 1984, the NRLCA and the Postal Service were unable to agree upon the terms of a collective bargaining agreement. In accordance with 39 U.S.C. § 1207(c), the dispute was referred to binding arbitration, and a three-member panel, made up of a representative from each the USPS and the NRLCA, and headed by Arbitrator Marlin Volz, issued an award determining the terms of an agreement covering the period from 1984 through 1987 (the "Volz award"). Part of that award was the creation of Article 9.1.B.1. This section of the CBA established a new entry wage level, known as "Step B". Step B was made applicable to all new regular as opposed to substitute rural letter carriers.

Article 9.1.B.1 provides in pertinent part:

There shall be a new Rural Carrier Evaluated Schedule, which expands each evaluated level to 14 steps by adding two (2) new lower steps. These two (2) lower steps shall be designated Steps B and C. (There shall be no Step A.) Effective January 19, 1985, all new regular carrier appointees will begin at Step B, except substitute rural carriers who convert to regular status. Substitute rural carriers will be converted to regular carrier status at Step 8 or their existing Step, whichever is lower, provided, however, that substitutes serving in excess of ninety (90) days on a vacant route at the time of conversion will convert at their existing step.

See NRLCA's Ex. 8, p. 3.

In 1988, the NRLCA and the Postal Service negotiated a successor agreement in which Article 9's Step B provisions with the exception of increased dollar amount of wages were carried forward without change, although during contract negotiations the union has sought an amendment of those provisions.²

C. PLAINTIFF'S FIRST LAWSUIT (KAISER I)

On November 17, 1987 Kaiser filed a grievance in accordance with the CBA's grievance and arbitration provisions seeking an upward adjustment of the reduction in his annual salary that occurred when he transferred from his city carrier position to that of a rural carrier. Then in June 1988, while arbitration of that grievance was pending, Kaiser also instituted a lawsuit in this Court ("Kaiser I").

In Kaiser I, Plaintiff sued the NRLCA and the Postal Service under 39 U.S.C. § 1208(b), alleging a breach of duty of fair representation claim against the union and a breach of collective bargaining agreement claim against the Postal Service. He also claimed (1) that he had an implied right of action against the Postal Service under 39 U.S.C. § 1006, which establishes career postal employees' right of transfer, and (2) that by virtue of the representations of USPS supervisors made to him prior to his transfer that he would not experience a cut in pay upon his transfer to the rural carrier position, an "equitable estoppel" was created which precluded the Postal Service from reducing his salary.

In March 1989, both the USPS and the NRLCA moved for summary judgment. Judge Suhrheinrich granted the defendants' motions on April 27, 1989. In his Memorandum Opinion and Order dated April 27, 1989, Judge Suhrheinrich held that no private cause of action exists under 39 U.S.C. § 1006, as a matter of law, and therefore dismissed that claim. He also dismissed Kaiser's remaining claims because of Kaiser's failure to exhaust his contractual arbitration remedies.

Kaiser subsequently appealed Judge Suhrheinrich's ruling. On July 10, 1990, the Sixth Circuit decided that appeal and affirmed Judge Suhrheinrich. See, Kaiser v. United States Postal Service, 908 F.2d 47 (1990). Kaiser then filed a Petition for Writ of Certiorari with the Supreme Court. The Petition was denied on January 11, 1991. See, Kaiser v. United States Postal Service, ___ U.S. ___, 111 S.Ct. 673, 112 L.Ed.2d 665 (1991).

D. ARBITRATION OF PLAINTIFF'S GRIEVANCE

In the meantime, during the district court and appellate court pendency of Kaiser I, the NRLCA proceeded with Kaiser's grievance.

By letter dated November 14, 1988, William Peer, General Counsel for the NRLCA informed Mr. Kaiser that his grievance was of the same kind and character of 10 or 11 other grievances that the union was processing through the grievance/arbitration procedures. As with Kaiser's grievance, these other grievances involved cases where there was evidence of the carriers' reliance upon misinformation and/or misrepresentations by Postal Service officials. Peer's letter informed Kaiser that the union had decided to consolidate his grievance with these other misinformation/misrepresentation grievances and submit them for National level arbitration in a consolidated proceeding. The information that Mr. Peer provided in his November 14, 1988 letter was confirmed in a subsequent February 1989 letter to Mr. Kaiser.

On June 7, 1989, the National level arbitration hearing was held before National Arbitrator Nicholas Zumas. The union took the position before the arbitrators that although they agreed with the Postal Service that the contract language explicitly states that the "carry over" salary features of Article 9 of the CBA applied only to substitute employees, it had decided that, based upon concepts of fairness, and in accordance with its duty of fair representation, it would pursue the grievances of employees who could establish to the satisfaction of the union that they had relied upon misrepresentations from the Postal Service in taking employment within the rural carrier craft, and seek full equitable estoppel remedies on behalf of those employees. See NRLCA's Ex. 5, pp. 12-13. It was these issues that were presented to the National arbitrators for resolution.

Both the union and the Postal Service submitted briefs presenting the factual and legal bases for their respective positions regarding these issues. Then, during the course of the June 7, 1989 National arbitration hearing, the union and the Postal Service submitted documentary evidence and presented testimony to further support their positions.

Among the evidence submitted to the arbitrators were articles that had appeared in the union's journal, The National Rural Letter Carrier, shortly after the January 1985 adoption of Volz award which created Article 9.1.B.1. These articles advised the membership that the union's National Board intended and interpreted Article 9.1.B.1 as excepting from the "carry over" salary protection provisions which covered current "substitute" rural carriers, those persons appointed to a regular rural carrier position from an eligibility roster resulting from the rural letter carrier examination. NRLCA Ex. 8, pp. 4-5.

Also submitted as evidence at the arbitration hearing were...