Ratkosky v. United Transp. Union

• Decision Date: 24 March 1988
• Docket Number: No. 87-3175,87-3175
• Citation: 127 L.R.R.M. 3219,843 F.2d 869
• Parties: 127 L.R.R.M. (BNA) 3219, 108 Lab.Cas. P 10,399 Ronald J. RATKOSKY; Paul B. Brossard; Cloyd G. Case; Ray W. Coontz; J. DiPuccio; James D. Fogarty; Charles H. Girts; Robert Hanus; William C. Hansen; Rolf J. Haltrich; John H. Harrington; Thomas A. Kawecki; et al., Plaintiffs-Appellants, v. UNITED TRANSPORTATION UNION; Consolidated Rail Corporation, Defendants- Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 869

843 F.2d 869

127 L.R.R.M. (BNA) 3219, 108 Lab.Cas. P 10,399

Ronald J. RATKOSKY; Paul B. Brossard; Cloyd G. Case; Ray

W. Coontz; J. DiPuccio; James D. Fogarty; Charles H.

Girts; Robert Hanus; William C. Hansen; Rolf J. Haltrich;

John H. Harrington; Thomas A. Kawecki; et al., Plaintiffs-Appellants, v. UNITED TRANSPORTATION UNION; Consolidated Rail Corporation,

Defendants- Appellees.

No. 87-3175.

United States Court of Appeals, Sixth Circuit.

Argued Jan. 26, 1988.

Decided and Filed March 24, 1988.

Wallace R. Steffen (argued), Cleveland, Ohio, for plaintiffs-appellants.

Norton N. Newborn (argued), Norton N. Newborn Co., L.P.A., Helen Kryshtalowych, Squire, Sanders & Dempsey, Cleveland Ohio, Ronald J. James, Jeffrey H. Burton (argued), Consol. Rail Corp., Philadelphia, Pa., for defendants-appellees.

Before: MILBURN and GUY, Circuit Judges, and CONTIE, Senior Circuit Judge.

RALPH B. GUY, Jr., Circuit Judge.

Plaintiffs, fifty railroad workers, filed suit against the United Transportation Union (UTU or the Union) and the Consolidated Rail Corporation (Conrail) seeking damages and a change in their seniority rights. Specifically, plaintiffs brought a claim for "equitable reformation" of the collective bargaining agreement. Plaintiffs also alleged that the UTU breached its duty of fair representation to its members. Finally, plaintiffs alleged that Conrail conspired with UTU to deprive plaintiffs of their employment rights. The district court granted defendants' motion for summary judgment, ruling that plaintiffs' contract claims for reformation of the bargaining agreement were preempted by federal labor laws. The district court also ruled that plaintiffs' claim against the UTU was time-barred, and even if it was not, that the plaintiffs had failed to show that the Union had breached its duty of fair representation. Accordingly, the district court also dismissed the conspiracy claim against Conrail. We agree and affirm.

I.

In 1973, Congress passed the Regional Rail Reorganization Act, as amended, 45 U.S.C. Secs. 701-797 ("3R Act"). This Act authorized the formation of Conrail through the acquisition and consolidation of eight financially troubled railroads including the Erie Lackawana and the Penn Central. Under the 3R Act, Conrail was required to offer employment to the employees of the bankrupt railroads. 45 U.S.C. Sec. 772(b) (1976) (repealed 1981). Moreover, in the event that a railroad worker with more than five years experience lost his job as a result of the merger, then he was entitled to collect monthly cash payments in the form of monthly "displacement allowances" until he reached the age of 65. 45 U.S.C. Sec. 775(b) ("Title V") (repealed 1981). ¹

In addition to the job protection provisions, the 3R Act also provided that Conrail would assume existing collective bargaining agreements with the various trade unions representing railway workers and undertake the negotiation of new agreements. 45 U.S.C. Sec. 772(b) (1976) (repealed 1981). The 3R Act provided that any agreement between Conrail and organized labor unions would ensure that the employees of the bankrupt railroads "who have seniority on the lines, properties or facilities acquired by [Conrail] ... shall have prior seniority roster rights on such acquired lines, properties, or facilities." Id. Sec. 774(a) (repealed 1981). The Act further mandated that Conrail and the labor unions were to negotiate "the procedure for determining the seniority of such employees in their respective crafts or classes on [Conrail's] system which shall, to the extent possible, preserve their prior seniority rights." Id. Sec. 774(b)(4) (repealed 1981).

Pursuant to this Congressional mandate, UTU and Conrail negotiated a bargaining agreement in 1975 establishing seniority rights according to a complicated two-tiered system. First, all Conrail employees were merged into a "dove-tailed" seniority roster according to the date each employee was hired by the original railroad. Second, each employee was given a prior right to positions in the operating area of the employee's former railroad. For example, if a position opened up in an area formerly operated by Penn Central, then a worker with ten years seniority with Erie Lackawana would have priority over another applicant who had five years seniority with Reading Railroad; but, a former Penn Central worker would have priority over both the other applicants regardless of their relative seniority. The collective bargaining agreement which established this seniority system went into effect on April 1, 1976, when Conrail officially commenced operations.

Plaintiffs are all former employees of Erie Lackawana. After the merger, Conrail shut down many of the old Erie Lackawana facilities but continued to operate much of the Penn Central system. As a result, many former Penn Central "trainmen" exercised their "prior rights" and were able to continue to work, whereas many former Erie Lackawana employees were laid off, despite their relatively greater seniority. Apparently, some of these laid-off workers complained to the UTU about the seniority system, but most were willing to accept the lay-offs since they continued to receive full benefits under the Title V protection plan. These benefits were curtailed, however, in 1981 when Congress repealed Title V. According to plaintiffs, they renewed their complaints to the UTU; nevertheless, the Union refused to renegotiate the seniority system established under the collective bargaining agreement with Conrail.

On July 25, 1984, plaintiffs filed this suit in federal court against UTU and Conrail. In Count I of the complaint, plaintiffs claimed that they were entitled to equitable reformation of the seniority provisions of the collective bargaining agreement. Specifically, plaintiffs argued that the two-tiered seniority system was contrary to the statutory mandate contained in the former 45 U.S.C. Sec. 774(b) (repealed 1981) which provided that "the procedure for determining the seniority of such employees ... shall, to the extent possible, preserve their prior seniority rights." Plaintiffs also argued that the contract should be rewritten by the court based on common law contract theories of "mutual mistake of fact" and "lack of consideration." According to plaintiffs, the seniority system was negotiated under the assumption that the Title V protections would continue indefinitely. Thus, plaintiffs contended that the subsequent repeal of these provisions amounted to a "mutual mistake of fact" or a "lack of consideration."

In Count II of plaintiffs' complaint, they alleged that the UTU breached its duty of fair representation by refusing to renegotiate the two-tiered seniority system after Congress repealed the Title V income protection provisions in 1981. Finally, in Count III, entitled "Conspiracy," plaintiffs alleged that Conrail was liable for "collaborating" with UTU by failing to prevent UTU's alleged breach of its duty of fair representation.

In granting defendants' motions for summary judgment, the district court relied heavily on its previous opinion in a similar case involving nearly identical claims brought against Conrail and two other unions. See Loew v. Consolidated Rail Corp., No. 84-2976 (N.D. Ohio, Oct. 31, 1985), aff'd, 812 F.2d 1407 (6th Cir.1987). With respect to plaintiffs' claim for reformation of the collective bargaining agreement, the district court ruled that the common law claims were preempted by federal law and that a claim for breach of the duty of fair representation is the exclusive remedy available to a union member who seeks to challenge the terms of a collective bargaining agreement. Again relying on Loew, the district court ruled that the plaintiffs' claims in Count II alleging that UTU had breached its duty of fair representation were barred by the applicable six-month statute of limitations. The district court found that plaintiffs should have known no later than May 25, 1982, that the UTU would not renegotiate the seniority issue, since the local union had received a letter to that effect from the UTU on that date. Thus, the district court concluded that plaintiffs' claims for breach of the duty of fair representation based on the UTU's failure to renegotiate were untimely.

In the alternative, the district court found that, based on the undisputed evidence presented for summary judgment, plaintiffs had failed to show that UTU's refusal to renegotiate the contract was arbitrary or in bad faith. Thus, assuming arguendo, that plaintiffs' claims against the Union were not untimely, the district court ruled that the Union was entitled to summary judgment on the merits. The district court summarily disposed of plaintiffs' "conspiracy" claim against Conrail finding that such a claim was necessarily dependent upon the plaintiffs prevailing in their claims against the Union.

II.

Plaintiffs concede that the claim for reformation of the collective bargaining agreement is not an independent cause of action but, rather, is more in the nature of a request for a particular type of relief based upon a showing that UTU has breached its duty of fair representation. ² Plaintiffs' arguments in favor of reformation of the contract based on state common law theories of mutual mistake and failure of consideration are clearly preempted by federal law. See generally Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 208-10, 105 S.Ct. 1904, 1909-11, 85 L.Ed.2d 206 (1985). Accordingly, we now consider the central question raised on appeal, i.e., did the district court err in granting summary judgment in favor of defendants on the plaintiffs' claim that the Union breached its duty of fair representation by refusing to renegotiate the seniority provisions of the collective bargaining agreement.

III.

The district court correctly stated the standard for granting summary judgment under Fed.R.Civ.P. 56(c) which provides in part:

The judgment sought shall be rendered...