Masiello v. U.S. Airways, Inc.

Citation113 F.Supp.2d 870
Decision Date14 September 2000
Docket NumberNo. 3:99CV319-H.,3:99CV319-H.
PartiesJohn MASIELLO and Craig Sickler, Plaintiffs, v. US AIRWAYS, INC., the International Association of Machinists and Aerospace Workers, Airline Machinists District Lodge 141-M, and Local Lodge 1725, Defendants.
CourtU.S. District Court — Western District of North Carolina

Philip M. Van Hoy, Van Hoy, Reutlinger & Taylor, Charlotte, NC, Glenn M. Taubman, Springfield, VA, for plaintiffs.

Louis L. Lesesne, Jr., Lesesne & Connette, Charlotte, NC, David L. Neigus, Upper Marlboro, MD,, Jeremiah A. Collins, Robert Alexander, Bredhoff & Kaiser, PLLC, Washington, DC, for International Ass'n of Machinists & Aerospace Workers, Airline Machinists Dist. 141, Local 1725, Intern. Ass'n of Machinists and Aerospace Workers Local Lodge 1725, defendants.

Deanna Ruddock Lindquist, Kilpatrick Stockton LLP, Charlotte, NC, Chris A. Hollinger, Robert A. Siegel, O'Melveny & Myers, L.L.P., Los Angeles, CA, for USAirways, Inc., defendant.

MEMORANDUM AND ORDER

HORN, Chief United States Magistrate Judge.

THIS MATTER is before the Court on the following motions, memoranda, and responsive pleadings:

1. "Plaintiffs' Motion for Summary Judgment" (document # 27) and "Plaintiffs' Memorandum in Support.," (document # 28), both filed July 18, 2000;

2. "Defendant U.S. Airways, Inc.'s Memorandum in Opposition..." (document # 36) and "Memorandum of Defendants International Association of Machinists ... in Opposition..." (document # 37), both filed September 1, 2000; and

3. "Plaintiffs' Reply Memorandum in Support..." (document # 38) filed September 12, 2000.

The parties have consented to Magistrate Judge jurisdiction under 28 U.S.C. § 636(c), and this motion is now ripe for disposition. Having carefully considered the parties' arguments, the record, and the applicable authority, the undersigned will grant the Plaintiffs' motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs John Masiello and Craig Sickler were hired by Defendant U.S. Airways, Inc. ("Employer" or "Airline" or "US Airways") in August 1988 and May 1988, respectively, to work in the craft or class of "mechanical and related personnel." Both became members of the Defendant International Association of Machinists and Aerospace Workers ("IAM" or "IAM International").

Defendant U.S. Airways is a corporation organized and existing under the laws of the State of Delaware which maintains its principal place of business in Arlington, Virginia. US Airways operates an airline in interstate commerce and is a "carrier by air" within the meaning of Section 201 of the Railway Labor Act ("RLA"), 45 U.S.C. § 181.

IAM International is an unincorporated association, with its principal offices in Maryland, existing in part to represent employees with respect to rates of pay, hours, and working conditions, and is a labor organization subject to the provisions of the Railway Labor Act, 45 U.S.C. §§ 151-88 (1982). Pursuant to RLA § 2 Ninth, 45 U.S.C. § 152 Ninth, the IAM has been certified as the exclusive bargaining representative of the craft or class of mechanical and related personnel at U.S. Airways. The IAM carries out its representational functions at U.S. Airways through the services of affiliated labor organizations, namely Defendant Airline Machinists District 141-M ("DL 141-M") and Defendant Local Lodge 1725 ("LL 1725").1 Along with and through these affiliates, Defendant IAM serves as the exclusive bargaining representative of U.S. Airways' mechanical and related personnel at Charlotte, North Carolina, which included representation of the Plaintiffs while they were U.S. Airways employees.

In 1995, both Masiello and Sickler resigned their memberships in the IAM unions and began annually informing the IAM, in writing, that each objected to supporting the nonrepresentational activities of the IAM and its affiliates. On July 8, 1996, and October 28, 1996, respectively, Masiello and Sickler each revoked the dues check-off authorization they had signed.

In the Fall of 1998 and pursuant to its own internal policy and procedures, the IAM published in the IAM Journal the then-current version of a "Notice to Employees Subject to Union Security Clauses" ("Notice to Employees") concerning the procedure for nonmembers to file objections and pay reduced dues. The Notice to Employees provided that nonmembers of the IAM who filed timely written objections to supporting the IAM's political and nonrepresentational agenda would pay reduced fees for the 1999 calendar year, to be calculated as "the percentage reduction in monthly Grand Lodge per capita payments ... 26.62 percent, plus a 12.71 percent reduction in district lodge per capita and an [sic] 17.83 percent reduction in local lodge fees." The Notice to Employees was not accompanied by any financial information or explanations about how the IAM or its affiliates arrived at their reduced fee calculations for the 1999 calendar year.2

Despite the lack of financial information, in November 1998, Plaintiffs each responded to the IAM's "Notice to Employees" by sending letters of objection. Later that month, the IAM's General Secretary-Treasurer, Donald E. Wharton ("Secretary Wharton"), wrote each Plaintiff that their objections had been properly "perfected" in accordance with the IAM's "Notice to Employees" and that they had thirty days to file a "challenge" to the IAM's reduced fee calculation before an "impartial arbitrator chosen by the American Arbitration Association (`AAA')."

Also included with Secretary Wharton's letter to each Plaintiff was a "financial disclosure package" containing single-page "fee reduction audit" summary sheets for the IAM and several of its local lodge and district lodge affiliates, most of which had nothing to do with DL 141-M or LL 1725. Certain of the information dated back to 1993, some was illegible, and whole sections and columns of information were cut off the copies received by the Plaintiffs. Significantly, the "financial disclosure package" nowhere mentioned the expenditures of Plaintiffs' local union, LL 1725, nor were any of the IAM affiliates' one page "fee reduction audits" prepared by independent certified public accountants.3

This "financial disclosure package," along with the earlier "Notice to Employees," was the only financial disclosure material ever sent to Plaintiffs by the Defendants prior to their discharge.

In his deposition, the IAM's Assistant Secretary-Treasurer, William Engler ("Assistant Secretary-Treasurer Engler"), conceded that a non-member objector would not be able to use the limited information provided to compute the percentage of dues used for political and other nonrepresentational purposes and thus to determine what reduction in dues was indicated.

Despite the IAM's failure to meet its disclosure obligation, the Plaintiffs both notified the IAM by letter sent in December 1998, that they "challenged" the IAM's reduced fee calculations, and requested arbitration. Both also requested an independent escrow account in which disputed fees could be deposited, and specifically asked for the financial disclosure to which they were clearly entitled. These letters were received by the IAM and accepted as timely "challenges" under the "Notice to Employees" and the IAM's internal procedures.

At no time prior to procuring Plaintiffs' discharge (in June 1999) did the IAM send either Plaintiff a copy of the notes or supporting schedules they requested or otherwise respond to the Plaintiffs' request for financial disclosure. Nor was this deficiency a mere oversight. When asked if the IAM would ever respond to an employee who asked for additional information, such as the notes to the financial statements, Assistant Secretary-Treasurer Engler, the man in charge of the IAM's objection program, bluntly answered: "I would not respond."

At no time after their challenges were submitted (in December 1998) did Plaintiffs receive any acknowledgment from the IAM unions that their correspondence had been received; that an arbitration had been scheduled; that any additional "fee reduction audits" would be conducted; or that an escrow account for disputed fees had been established with an independent third party. Accordingly, the Plaintiffs did not pay any dues that allegedly accrued after January 1, 1999.

Rather than providing the requested financial information — as clearly required by law — beginning April 7, 1999, LL 1725 and DL 141-M compounded their error by threatening Plaintiffs' employment if they failed to pay both the arrearage and a "reinstatement fee." None of the demand letters from the union acknowledged the Plaintiffs' pending "challenges," responded to their requests for arbitration, reported on any "fee reduction audit," or advised that an escrow account had been established.

Still having failed to afford Plaintiffs the required procedural protections, on May 14, 1999, Defendants IAM and DL 141-M requested that U.S. Airways discharge them both, citing their "noncompliance" with Article 19 (entitled "Union Shop and Dues Check-Off Agreement") of the collective bargaining agreement. In late May 1999, the Plaintiffs appealed to U.S. Airways, noting the complete lack of procedural protections required by law. US Airways brushed aside the argument as "not germane" to the standards of the U.S. Airways-IAM collective bargaining agreement,4 discharging the Plaintiffs on June 1, 1999. At the time of their termination, both Plaintiffs had good work records.

The record is replete with examples of the union's untimely, inadequate practices and procedures. For example, despite receiving the December 1998 letters and accepting them as valid challenges under its "Notice to Employees," the IAM did not contact the AAA to initiate arbitration until November 1999, almost one year after the challenges were received and five months after the Plaintiffs were discharged. Apparently such delays were not uncommon and, indeed, in other cases...

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    • U.S. Court of Appeals — Tenth Circuit
    • August 13, 2002
    ...courts and at least one circuit court have expressed a similar view. See Penrod, 203 F.3d at 46; see also Masiello v. U.S. Airways, Inc., 113 F.Supp.2d 870, 877 (W.D.N.C.2000); Reese v. City of Columbus, 798 F.Supp. 463, 468 (1992), further proceedings, 826 F.Supp. 1115 (S.D.Ohio 1993), aff......

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