McLeod v. Arrow Marine Transport

• Decision Date: 12 July 2001
• Docket Number: No. 01-1060,01-1060
• Parties: (7th Cir. 2001) Leon A. McLeod, Randy Sanders, Don Newman, et al., Plaintiffs-Appellants, v. Arrow Marine Transport, Incorporated, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 608

258 F.3d 608 (7th Cir. 2001)

Leon A. McLeod, Randy Sanders, Don Newman, et al., Plaintiffs-Appellants, v. Arrow Marine Transport, Incorporated, Defendant-Appellee.

No. 01-1060

In the United States Court of Appeals For the Seventh Circuit

Argued May 14, 2001

Decided July 12, 2001

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 C 655--John W. Darrah, Judge. [Copyrighted Material Omitted] Before Bauer, Rovner, and Diane P. Wood, Circuit Judges.

Bauer, Circuit Judge.

Plaintiffs- appellants (or "drivers"), ten former semitrailer tractor truck drivers for Arrow Marine Transport, Inc. ("AMT"), brought a hybrid breach of contract/duty of fair representation action under sec. 301 of the Labor Management Relations Act, 29 U.S.C. sec. 185(a) against AMT for failure by their exclusive bargaining agent, the Chauffeurs, Teamsters and Helpers Union Local No. 301 ("union"), who had entered into a collective bargaining agreement ("CBA") on their behalf with AMT, to fairly resolve their grievances. After several adverse rulings by the district court, the drivers appeal. We affirm.

BACKGROUND

AMT, an Illinois trucking corporation, hauls goods between locales for various construction and manufacturing companies. Arrow Specialized Carriers ("ASC"), a non-unionized company also in Illinois, provides broker services in that it finds available haul jobs and hires other trucking companies to do them. Michael Trinski is president and co-owner of both AMT and ASC. ASC often hired AMT to perform the jobs it found.

Plaintiffs-appellants all, at one time and in some capacity, worked for AMT. Leon McLeod, Randy Newman, Rick Sturm, William Lama, and Joe LaFlamme were owner-drivers, meaning that they drove their own tractors when hauling goods for AMT. Willis Rushing, George Kwapniewski, Jason Clavey, and Brian Cusker were employee-drivers hired to drive AMT trucks. Randy Sanders started his employ as an employee-driver and eventually became an owner-driver. Each of the drivers left AMT as follows: (1) Sturm prior to 1997; (2) Sanders on March 17, 1997; (3) Newman on April 17, 1997; (4) McLeod on April 28, 1997; (5) Lama on September 6, 1997; (6) Kwapniewski and Clavey on January 8, 1998; (7) Rushing on January 15, 1998; (8) Cusker on January 19, 1998; and (9) LaFlamme on January 24, 1998.

According to Article 8, Section 4 of the CBA, all employees were to be paid either hourly or on a percentage basis. All of the plaintiffs-appellants earned a percentage of the gross revenue paid to AMT per haul. Accordingly, their salary varied with each job, so, in order to assure the drivers that they were being paid the right amount, Article 17, Section 2 of the CBA promised that "[d]etailed statements will be furnished by companies to owner-drivers/employees at least once a month, designating all owner-drivers/employees full gross income and expenses for the month. Any money due at this time must be paid."

The CBA also detailed the procedure for employees to follow if they had a grievance. As per Article 15, Section 1(A), a grievance had to be raised with the Foreman by the employee alone or with a union representative within five days of its occurrence; if it was not resolved, the employee, either alone or with a union representative, would speak to the Plant Supervisor and then to a member of management; if still not resolved, the union referred the grievance to the Permanent Labor Committee ("PLC"), a four-member body which would hold a hearing and vote on a resolution; and if still unresolved, on to arbitration.

This elaborate grievance procedure could be bypassed in certain limited circumstances. Article 15, Section 2 created an exception to the procedure for any "willful or flagrant violations of the wage or overtime provisions . . . ." Article 18, Section 1 declared: "Authorized representatives of the Union shall have access to the Employer's establishment at all reasonable times for the purpose of . . . ascertaining compliance with this Agreement (which shall include the right to inspect and audit payroll records, time cards and work sheets)." Furthermore, Article 18, Section 2 instructed: "Should a Certified Public Accountant, designated by the Union, certify in writing specifically that an Employer is violating the wage scale . . . based upon the records for an audit . . . , then the grievance procedure shall have no application . . . and the Union shall be permitted all legal and economic recourse . . . ."

From here, the facts become dense because, despite an attempt by the drivers to unify themselves and obscure unattractive facts, we are really dealing with three distinct sets of plaintiffs- appellants. The first set includes McLeod, Sanders, Newman, Sturm, and Lama. These drivers filed a grievance in late 1997, months after they left AMT. The second set encompasses Kwapniewski, Clavey, and Cusker, whose grievance was timely filed, heard, and resolved by the PLC. Third and finally there is Rushing and LaFlamme, who never filed a grievance but joined this suit. Thus, for clarity's sake, we reserve further factual narrative until we address the issues specific to each set of drivers.

The drivers raise four issues on appeal, which are that the district court erred in: (1) granting summary judgment for AMT against Kwapniewski, Cusker, and Clavey; (2) granting summary judgment for AMT against Rushing and LaFlamme; (3) striking parts of their brief and fact statement; and (4) dismissing the claims of McLeod, Sanders, Newman, Lama, and Sturm.

While these four issues presented in their appellate brief seem straightforward, all of the drivers' arguments are infused with an overarching contention, and a rather serious one at that. They assert that Trinski formed and used ASC to funnel money away from AMT and into his own pocket. They believe that AMT paid ASC a broker fee for finding AMT jobs, jobs that AMT could have procured on its own, and that the broker fee was being skimmed off the top of the gross revenue AMT earned for each haul job, thereby reducing the amount from which the drivers' percentages were calculated. They believe that this wage- skimming scheme would have been discovered if the union had conducted a proper audit in resolution of their grievances. Therefore, they claim that through this scheme AMT breached the CBA and that the union breached its duty to fairly represent its members by failing to perform an audit by which this breach would have been discovered.

The drivers' theory is not one to take lightly, but, given the factual landscape (the nature of the drivers' grievances) and legal landscape (our standard of review) of this case, it is simply not one we may take at all. In other words, the drivers' theory did not come to fruition until discovery in this lawsuit was well under way, which is common in many cases; however, under the law governing this hybrid suit, we look at whether the union acted arbitrarily given the facts known at the time it acted. At the time the union acted there was not a hint of this theory--not in the drivers' grievances, not in the minutes from the hearing for the grievance filed by one set of drivers, and for that matter, hardly even in the complaint or amended complaint. Given this, the foundation of the drivers' appeal is swept away. As the union was unaware of this theory at the time it handled the drivers' grievances, it cannot be faulted for only addressing the particular issues raised.

DISCUSSION

"National labor policy has been built on the premise that by pooling their economic strength and acting through a labor organization freely chosen by the majority, the employees of an appropriate unit have the most effective means of bargaining . . . ." NLRB v. Allis- Chalmers Mfg. Co., 388 U.S. 175, 180 (1967). However, as always when individuals join together, "[t]he complete satisfaction of all who are represented is hardly to be expected." Id. Nevertheless, each employee is bound by the union's decisions because that is what they bargained for. See id. To help balance the power bestowed upon the union to exclusively represent all employees in employment disputes, "'a concomitant duty of fair representation [is owed] to each of its members.'" Garcia v. Zenith Elecs. Corp., 58 F.3d 1171, 1176 (7th Cir. 1995) (quoting Cleveland v. Porca Co., 38 F.3d 289, 295 (7th Cir. 1994)); see Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 44 (1998).

The type of case filed by the drivers is referred to as a hybrid suit because it is comprised of two causes of action that are "inextricably interdependent." See DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 164-65 (1983). To prevail, "[a]n employee must establish that the union breached its duty of fair representation to maintain an actionable sec. 301 claim against the employer." Filippo v. Northern Ind. Pub. Serv. Corp. Inc., 141 F.3d 744, 748 (7th Cir. 1998); see McKelvin v. E.J. Brach Corp., 124 F.3d 864, 869 (7th Cir. 1997). "A union breaches its duty to fairly represent its members where its conduct toward one of its members is 'arbitrary, discriminatory, or in bad faith.'" Crider v. Spectrulite Consortium, Inc., 130 F.3d 1238, 1243 (7th Cir. 1997) (quoting Vaca v. Sipes, 386 U.S. 171, 190 (1967)); see Marquez, 525 U.S. at 44. The drivers' sole argument is that the union acted arbitrarily in how it conducted the audit.¹ We examine the objective adequacy of the union's actions in determining whether they were arbitrary. See Trnka v. Local Union No. 688, 30 F.3d 60, 63 (7th Cir. 1994).

"The doctrine of fair representation is an important check on the arbitrary exercise of union power, but it is a purposefully limited check . . . ." United Steelworkers of Am. v. Rawson, 495 U.S. 362, 374 (1990). "[T]he test for determining whether particular conduct is arbitrary can be quite forgiving." Garcia, 58 F.3d at 1176. "[A] union's actions are arbitrary only if, in...