Mason v. Continental Group, Inc., Civ. A. No. CV80-L-1730-S.

• Decision Date: 27 July 1983
• Docket Number: Civ. A. No. CV80-L-1730-S.
• Citation: 569 F. Supp. 1241
• Parties: John A. MASON, III, et al., Plaintiffs, v. CONTINENTAL GROUP, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

569 F. Supp. 1241

John A. MASON, III, et al., Plaintiffs, v. CONTINENTAL GROUP, INC., et al., Defendants.

Civ. A. No. CV80-L-1730-S.

United States District Court, N.D. Alabama, S.D.

July 27, 1983.

Jerry O. Lorant, J. Gusty Yearout, Lorant, Harris & Yearout, P.C., Birmingham, Ala., for plaintiffs.

William F. Gardner, Sydney F. Frazier, Jr., Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham, Ala., for defendants.

MEMORANDUM OPINION

LYNNE, Senior District Judge.

This action has been submitted to the Court on the defendants' motions for summary judgment. Defendants are the United Steelworkers of America, AFL-CIO (hereinafter "the Union"), and The Continental Group, Inc., together with its operating division, Continental Can Company, U.S.A. (hereinafter collectively referred to as "Continental"). Plaintiffs are individuals who were employed by Continental at its Plant No. 411 in Fairfield, Alabama, until the plant was closed on December 21, 1979. At all times relevant to the allegations of the complaint, plaintiffs were members of the collective bargaining unit represented by the Union and were subject to a written collective bargaining agreement, insurance agreement and pension plan entered into between Continental and the Union.

This action was originally filed in state court, Continental being the only defendant specifically identified in the complaint, and was removed by Continental to this court. Jurisdiction is predicated upon the provisions of § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a). After Continental moved for summary judgment on the ground that plaintiffs have made no attempt to resolve their claims through the grievance and arbitration provisions contained in the collective bargaining agreement, insurance agreement and pension plan, the plaintiffs amended their complaint with leave of court to add the Union as a defendant and to assert claims against the Union, including a claim for breach of the duty of fair representation, principally based upon the Union's failure to prosecute plaintiffs' complaints through the grievance and arbitration procedure.

In their original complaint against Continental, plaintiffs claimed damages "for their wrongful termination, for the deprivation of employee benefits, pension retirement benefits, comprehensive employee benefits, seniority rights, and mental anguish" resulting from the closing of Plant No. 411. They allege:

Continental as employer of plaintiffs, continuously throughout said employment and prior thereto, represented to and agreed with plaintiffs, that plaintiffs would have continuous employment with Continental until plaintiffs reached the age of 65 or until plaintiffs became otherwise eligible to receive full retirement and other benefits under a comprehensive benefit program as long as plaintiffs performed their respective jobs in a satisfactory manner. Continental further represented and promised additional employee benefits including, but not limited to, extended vacation after employment with Continental for ten years.

Plaintiffs contend that Continental breached its agreement by terminating their employment, that the termination gives rise to a cause of action under the Alabama fraud statutes, see Ala.Code §§ 6-5-101 to 104 (1975), and that Continental conspired with others to defraud plaintiffs. Plaintiffs also contend that Continental violated the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., by terminating plaintiffs' employment out of a desire to interfere with plaintiffs' attainment of rights and benefits under a comprehensive benefit program administered by Continental.

In their amendment to the complaint adding the Union as a defendant, plaintiffs contend that the Union breached its duty of fair representation by (a) failing to provide a reasonable grievance and arbitration procedure for plaintiffs upon the termination of their employment; (b) failing to prepare and prosecute grievances; (c) failing and refusing to make available to plaintiffs administrative remedies provided under the collective bargaining agreement; (d) conspiring with Continental for the plant's shutdown; and (e) conspiring with Continental to terminate plaintiffs' employment without first submitting the proposed plant shutdown through the contractual grievance procedure. Aside from their claim for breach of the duty of fair representation, plaintiffs contend that the Union and Continental conspired to deprive them of their rights provided for in the collective bargaining agreement and other rights by planning to shut down the plant without providing a grievance and arbitration procedure before and after the termination of plaintiffs' employment.

I. Continental's Motion for Summary Judgment (Herein of Grieving the Death of a Plant)

Continental moves for summary judgment on the basis of plaintiffs' failure to attempt to resolve their claims through the grievance and arbitration provisions of the collective bargaining agreement. It is undisputed that no plaintiff initiated a grievance relating to the company's actions in closing Plant No. 411. Equally undisputed is the principle of law set forth in Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965):

As a general rule in cases to which federal law applies, federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress. If the union refuses to press or only perfunctorily presses the individual's claim, differences may arise as to the forms of redress then available. But unless the contract provides otherwise, there can be no doubt that the employee must afford the union the opportunity to act on his behalf.

379 U.S. at 652-53, 85 S.Ct. at 616 (footnotes and citations omitted). In response, plaintiffs argue that the claims they assert in this action are not within the scope of the grievance and arbitration procedure and that, in any event, under the circumstances they were excused from the requirement that they first resort to that procedure.

The provisions for the settlement of disputes in the contract establish a four-step grievance procedure culminating in arbitration and preceded by the following relevant language:

13.1 Purpose.

The purpose of this Article is to provide an opportunity for discussion of any request or complaint and to establish a procedure for the processing and settling of grievances, as defined in Section 13.2. 13.2 Definition

A grievance is defined as any difference between the Local Management and the Union or employees as to the interpretation or application of or compliance with this Agreement respecting wages, hours, or conditions of employment. Any dispute over whether a complaint is subject to these procedures shall be handled as a grievance in accordance with the procedures prescribed herein.

Also relevant is the description of the first step in the grievance procedure:

Within thirty (30) calendar days after wrong complained of was supposed to have happened or started to exist (but if the employee did not find out about the wrong immediately, he will be allowed thirty (30) calendar days after he reasonably should have found out about it to file the grievance) the employee, with a Grievance Committeeman or Steward, or if he so desires, alone, talks over the grievance with his Supervisor in a sincere effort to settle the problem. This does not preclude the handling of group grievances. (Emphasis added).

There can be little doubt that the grievance and arbitration provisions of the contract in question are sufficiently broad to encompass plaintiffs' claims that they have been wrongfully denied benefits provided by the contract. Plaintiffs' contention that, because they base their claim not on a breach of the collective bargaining agreement but rather on fraudulent misrepresentations and the breach of obligations created by those representations, their claims were not grievable was rejected by this Court in the closely analogous case of Reese v. Mead Corporation, 79 Lab.Cas. (CCH), 11,732 (N.D.Ala.1975), aff'd mem., 79 Lab.Cas. (CCH), 11,733 (5th Cir.1976). There the plaintiffs, who had elected under a collective bargaining agreement to receive a severance allowance upon the closing of one of defendant's furnaces at which they worked rather than electing to remain in layoff status, claimed that the defendant deprived them of seniority and pension rights by misrepresenting certain facts on the basis of which plaintiffs made the decision to elect the severance option. In response to the plaintiffs' argument that their claims based upon fraud could be maintained independently of the collective bargaining agreement, the Court stated:

In the present case former employees are complaining that statements made by their employer in and about the application of the collective bargaining agreement resulted in a denial of certain benefits that plaintiffs would not have had but for that agreement. The Court concludes that notwithstanding the "fraud" label applied by plaintiffs, the seniority and pension benefit claims are sufficiently bound up in the collective bargaining agreement between defendant and the Union to require the application of federal labor law principles recognized in Republic Steel, supra.

As in Reese, plaintiffs' attempt in the present case to separate their claims from the collective bargaining agreement is without merit.

This Court in Reese also addressed the principles for determining the breadth of a grievance and arbitration procedure:

Having concluded that federal labor policies control this dispute, the Court cannot then escape the strict standards for interpreting the scope of collectively bargained arbitration clauses set out in United Steel Workers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80

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