Merk v. JEWEL FOOD STORES DIV., JEWEL COMPANIES, 85 C 7876.

• Decision Date: 26 June 1986
• Docket Number: No. 85 C 7876.,85 C 7876.
• Citation: 641 F. Supp. 1024
• Parties: Kelly MERK, Joseph Staszewski, Vickie Menagh, Donna McCormick, David Therkield, John Malone, Marlene Wagner, Michael Demare, Wayne Volker, Eleanore Collins, Andrew Kachik and Patricia Todd, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs, v. JEWEL FOOD STORES DIVISION, JEWEL COMPANIES, INC., American Stores Company, Inc., and United Food and Commercial Workers Union, Local 881, Chartered by United Food and Commercial Workers International Union AFL-CIO and CLC, Defendants.
• Court: U.S. District Court — Northern District of Illinois

641 F. Supp. 1024

Kelly MERK, Joseph Staszewski, Vickie Menagh, Donna McCormick, David Therkield, John Malone, Marlene Wagner, Michael Demare, Wayne Volker, Eleanore Collins, Andrew Kachik and Patricia Todd, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs, v. JEWEL FOOD STORES DIVISION, JEWEL COMPANIES, INC., American Stores Company, Inc., and United Food and Commercial Workers Union, Local 881, Chartered by United Food and Commercial Workers International Union AFL-CIO and CLC, Defendants.

No. 85 C 7876.

United States District Court, N.D. Illinois, E.D.

June 26, 1986.

Jack Bartler, William Cremer, McKenna, Storer, Rowe, White & Farrug, Wheaton, Ill., James P. DeNardo, Barry S. Hyman, McKenna, Storer, Rowe, White & Farrug, Chicago, Ill., for plaintiffs.

Robert Karmel, Neal D. Rosenfeld, Jairus M. Gilden, Karmel & Rosenfeld, E. Allan Kovar, Kovar, Nelson & Brittain, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

This case presents difficult labor law issues which appear to be of first impression. The plaintiffs are part of a putative class of former supermarket employees of defendant Jewel Food Stores ("Jewel"). Their three-count complaint under § 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a),¹ while pleading alternative and inconsistent claims for relief, seeks one remedy—payment of back wages which Jewel allegedly owes plaintiffs under a collective bargaining agreement. Counts II and III are against Jewel and the defendant Union respectively, and together comprise the familiar "hybrid" suit. These counts rest on the existence and breach of a duty of fair representation owed to plaintiffs by the Union. Count I is a direct § 301 claim against Jewel only; it rests on the alternative theory that the Union owed no duty of fair representation to these former employees. The Union has moved for summary judgment on Count III, arguing among other things that it owed no duty to plaintiffs. For the reasons stated below, we agree with the Union and must necessarily dismiss the entire hybrid part of the suit, that is, both Counts II and III. We also have before us Jewel's motion to dismiss Count I, which argues that the direct suit is barred by the six-month statute of limitations set forth in Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). For the reasons stated below that motion is denied.

I.

The following facts appear to be undisputed. On October 20, 1983, the Union and Jewel entered into a three-year collective bargaining agreement which was effective retroactive to September 19, 1982, and ran to June 15, 1985. Jewel runs about 180 supermarkets in and near Chicago employing some 16,000 workers represented by the Union. In January 1984 the Union and Jewel started haggling over a modification of the Agreement. Jewel says it believes that the Union had agreed orally in 1982 to reopen the contract for negotiation when the discount "Cub Food Stores" chain was to begin operations. Jewel says that under this oral "reopener" agreement it had the right to unilaterally implement any final offer it made, if the "reopened" negotiations reached impasse. The Union says it made no such agreement, but agreed to meet with Jewel in January 1984 to discuss a proposal by Jewel to cut wages and benefits.

These negotiations got nowhere, and on February 26, 1984, in accordance with what it called its "final offer at impasse," Jewel unilaterally cut wages and benefits below levels specified in the 1982-85 Agreement. The wage cuts were as high as $1.25 per hour, and vacation and personal day benefits were reduced as well. The Union demanded arbitration,² Jewel refused and so the Union sued Jewel to compel arbitration. United Food & Commercial Workers Union, Local 881 v. Jewel Food Stores Division, Jewel Companies, Inc., No. 84 C 1648 (N.D.Ill.). The Union also lodged an unfair labor practice charge with the National Labor Relations Board ("NLRB").³

In December 1984, the NLRB urged Jewel and the Union to try to negotiate a settlement. The parties met and did not agree. However, the Union submitted Jewel's offer to the rank and file, who followed the Union's recommendation to reject the offer. Negotiations continued into the spring.

On April 9, 1985, the District Court granted the Union's motion for summary judgment and ordered Jewel to arbitrate. Jewel filed a notice of appeal. Before anything came of the court proceedings, however, the Union and Jewel began more intense and fruitful negotiations. In light of the imminent expiration of the Agreement on June 15, 1985, they combined negotiations over the wage and benefit cut with talks over a new collective bargaining agreement. After a few meetings, Jewel proposed a settlement on May 19, 1985, which would restore most of the wages and benefits to their previous level and also would provide full retroactive pay for wages lost because of the cuts. However, this latter offer extended only to employees then on the payroll. The Union submitted the proposal to the membership and recommended acceptance. On June 21, 1985, more than 80% of current employees voted to ratify the new contract and the settlement agreement. As a result, the parties dismissed the Court suit and asked the NLRB to drop its proceedings, which it did.

The plaintiffs are part of a putative class, containing perhaps as many as 2,000 members, of former Jewel employees who were not part of the above settlement. The class includes employees who retired, who quit or who were fired at various points during the fifteen months of the protracted battle. That the class should be so large is not surprising, since turnover is, we presume, normally high in the supermarket industry. Because the settlement included only employees of Jewel as of June 21, 1985, plaintiffs received no retroactive pay for the time they worked during the dispute at the reduced salary. Since they were former Jewel employees and ex-members of the Union, they could not and did not vote on the June 21, 1985 settlement; nor could they wield political power within the Union. They were not notified of the proposed resolution and, specifically, were not told that the resolution would not include them. They must have learned about it somehow, though, because they filed this suit on September 10, 1985, less than three months following the settlement.

Counts II and III form a traditional "hybrid" suit in the mold cast by Hines v. Anchor Motor Freight, 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976) and Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). Count II alleges that Jewel breached the 1982-85 Agreement by cutting plaintiffs' wages; Count III alleges that the Union breached its duty of representing plaintiffs fairly when it reached a settlement which left them high and dry. The twist in this case, though, is that plaintiffs were former employees when the settlement was reached. They claim, in the alternative, and the Union agrees, that the Union owed no duty to these former members. To protect themselves, plaintiffs amended their original complaint to add an alternative theory in what is now Count I, a direct suit under § 301 against Jewel only.

The first issue is whether the Union owed the plaintiffs a duty of fair representation after they left Jewel. While the Union and the plaintiffs agree that no continuing duty existed, we still must decide the question, since Jewel claims that the duty existed. All parties apparently agree about the legal and practical consequences of our decision on this issue. If Jewel is right that the duty existed, then plaintiffs are limited to their hybrid suit in Counts II and III, and we must grant Jewel's motion to dismiss the direct suit, Count I. This result would favor Jewel and hurt the ex-employees, since to recover they would have to carry the substantial burden of showing in Counts II and III that the Union breached its duty of fair representation. However, if the plaintiffs and the Union are right that the duty vanished when plaintiffs did, then plaintiffs will proceed on Count I only. To recover the plaintiffs would need only show that Jewel breached the contract; with the Union out of and irrelevant to their claim, their task would be lighter and Jewel's exposure greater.

This latter result, which we reach below, raises a second issue. We must decide whether the six-month statute of limitations of § 10(b) of the NLRA applies to the direct suit. We will take up the two issues in order below.

II.

The duty of fair representation is a creature of the judiciary, created as a necessary complement to the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq. The duty exists because the NLRA makes certified labor unions the exclusive bargaining representative of all employees in the bargaining unit. See Frandsen v. Brotherhood of Railway, Airline and Steamship Clerks, 782 F.2d 674, 678-79 (7th Cir.1986). Since the policy of exclusivity strips employees of normal methods of redress, for their protection, the employees' exclusive representative, the Union, necessarily has the duty "to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct." Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 909, 17 L.Ed.2d 842 (1967). However, this duty of fair representation extends no further than the Union's authority under § 9(a) of the NLRA, 29 U.S.C. § 159(a), to act as the exclusive representative of the bargaining unit. See, e.g., Freeman v. Local Union No. 135, Chauffeurs, Teamsters, Warehousemen and Helpers, 746 F.2d 1316, 1320-21 (7th Cir.1984). Thus, if the Union is not the exclusive representative of an employee, it has no corresponding duty to represent that employee fairly or at all. See id. at 1321.

The Union's authority to be...