Reed v. United Transp. Union

• Decision Date: 17 September 1987
• Docket Number: No. 86-2564,86-2564
• Citation: 828 F.2d 1066
• Parties: 126 L.R.R.M. (BNA) 2478, 56 USLW 2232, 107 Lab.Cas. P 10,206 G.P. REED, Plaintiff-Appellee, v. UNITED TRANSPORTATION UNION; Fred A. Hardin; K.R. Moore; J.L. McKinney, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1066

828 F.2d 1066

126 L.R.R.M. (BNA) 2478, 56 USLW 2232,

107 Lab.Cas. P 10,206

G.P. REED, Plaintiff-Appellee, v. UNITED TRANSPORTATION UNION; Fred A. Hardin; K.R. Moore;

J.L. McKinney, Defendants-Appellants.

No. 86-2564.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 7, 1987.

Decided Sept. 17, 1987.

Clinton Joseph Miller, III, Asst. General Counsel, United Transp. Union, Washington, D.C. (J. David James, Smith, Patterson, Follin, Curtis, James & Harkavy, Greensboro, N.C., on brief), for defendants-appellants.

John West Gresham (Ferguson, Stein, Watt, Wallas & Adkins, P.A., Charlotte, N.C., on brief), for plaintiff-appellee.

Before RUSSELL, WIDENER and CHAPMAN, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

This is an interlocutory appeal brought pursuant to 28 U.S.C. Sec. 1292(b). The sole issue before the court is whether the six-month limitations period provided in Section 10(b) of the National Labor Relations Act, 29 U.S.C. Sec. 160(b) (1982) ("NLRA") applies to a claim brought under Title I of the Labor Management Reporting and Disclosure Act, 29 U.S.C. Sec. 411 (1982) ("LMRDA"), or whether the most analogous state statute of limitations is applicable. The authoritative decision on the point in issue is Del Costello v. Internat'l Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). However, different constructions of that decision have been adopted by the Courts of Appeals. The view on the application of Del Costello have been well stated in two decisions, one by the Third Circuit in Local Union 1397 v. United Steel Workers, 748 F.2d 180 (3d Cir.1984), the other by the First Circuit in Doty v. Sewall, 784 F.2d 1 (1st Cir.1986). We find the Third Circuit view more persuasive and follow it in holding that the six-month limitations period of Section 10(b) applies to claims brought under Section 411 of the LMRDA, and reverse the decision of the district court below, 633 F.Supp. 1516, which adopted the view of the First Circuit.

The plaintiff, G.P. Reed, is a member of the United Transportation Union ("UTU") and a Secretary-Treasurer of its Local 1715. In August 1982 defendant Fred Hardin, UTU President, had the books and records of Local 1715 audited after concerns arose about the financial stability of the Local. The auditor disallowed reimbursement checks paid by the Local to Reed in the sum of $1,210.00 because Reed had failed to obtain prior approval for the reimbursements. Reed's counsel wrote to President Hardin on July 1, 1983, seeking repayment of the sum on the ground that different standards were applied to Reed than to other UTU members. He asserted that Local President Warlick ordered the disallowance of the reimbursement checks to harass the plaintiff for not supporting his views, and that if the UTU supported Warlick in those efforts, it would be in violation of Section 101 of the LMRDA. When Hardin responded that he considered the matter closed, Reed's counsel informed Hardin, by letter dated August 2, 1983, that he was advising Reed to commence litigation against the UTU under 29 U.S.C. Sec. 411 for violating Reed's equal rights and privileges as a UTU member. Reed commenced this action in August 1985, two years after his attorney's last letter to defendant Hardin.

In his Complaint, Reed raised claims under the LMRDA as well as pendent state implied contract and quantum merit claims. Specifically, Reed claimed that the defendants had violated his rights to freedom of speech and assembly as a union member as well as his right to be safeguarded from improper disciplinary action. He claimed that the selective application of the "prior approval" policy to disallow his reimbursement claims was meant to punish him for speaking out against Local President Warlick, whose claims for reimbursement were not denied despite his failure to obtain prior approval. He also claimed that the defendants had not properly exercised their fiduciary duties as officers of the Union pursuant to Title V of the LMRDA, 29 U.S.C. Sec. 501.

The defendants moved for summary judgment on the grounds that (a) Reed failed to commence the action within the six-month statute of limitations period provided in Section 10(b) of the NLRA, (b) Reed failed to exhaust his union remedies, (c) Reed's Section 501 claim failed to state a claim upon which relief could be granted, and (d) Reed's state law claims were barred as preempted by the LMRDA. The district court, by Order dated May 1, 1986, denied the defendants' motion as to all but Reed's Section 501 claim which it dismissed. The court, noting a split in the circuits concerning the statute of limitations applicable to Section 411 claims and that an immediate appeal from the Order might materially advance the ultimate termination of the litigation, certified an appeal of its Order with respect to the limitations issue pursuant to 28 U.S.C. Sec. 1292(b). The defendants appealed on that issue within ten days of the court's Order, and we agreed to hear the interlocutory appeal.

The only question before the court is whether the six-month limitations period provided in Section 10(b) of the NLRA applies to claims brought under Section 101 of the LMRDA. In Del Costello v. Internat'l Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), the Supreme Court determined what statute of limitations applies in an employee's "hybrid" suit against his employer, under Section 301 of the LMRA, and against his union, under the NLRA, when he alleges the employer's breach of a collective-bargaining agreement and the union's breach of its duty of fair representation by mishandling the ensuing grievance or arbitration proceedings. The Court began with the accepted proposition that because Congress did not specifically provide statute of limitations applicable to all federal labor claims, courts must often " 'borrow' the most suitable statute or other rule of timeliness from some other source." Id., at 158, 103 S.Ct. at 2287. It then reiterated the general rule that courts should apply to such claims the most closely analogous statute of limitations provided under state law. Id. The Court noted, however, that it has not hesitated to use timeliness rules drawn from federal law rather than state law when application of the most analogous state rule might unduly hinder or frustrate the federal policy behind the substantive federal law. See e.g. Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977) (declining to apply state statutes of limitations to enforcement suits brought by the EEOC under Title VII of the 1964 Civil Rights Act); McAllister v. Magnolia Petroleum Co., 357 U.S. 221, 78 S.Ct. 1201, 2 L.Ed.2d 1272 (1958) (applying federal limitations provision of the Jones Act to a seaworthiness action under general admiralty law); Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946) (refusing to apply a state statute of limitations to a federal action lying only in equity).

The Court analyzed the "hybrid Sec. 301/fair representation" claims brought by the plaintiffs and found that Section 10(b) of the NLRA, which establishes a six-month period for making charges of unfair labor practices to the NLRB, should be applied to the hybrid claim because it was more analogous to the claim than were the suggested state-law parallels. In a careful analysis, the Court explained that the suggested state parallels, i.e., breach of contract suits, suits for vacation of arbitration awards and malpractice suits, failed to adequately balance the opposing interests of the employee in vindicating his rights and the federal interest in the rapid settlement of labor disputes. Id. 462 U.S. at 164-69, 103 S.Ct. at 2290-93. The Court recognized a "family resemblance" between fair representation claims and unfair labor practice claims against unions:

Many fair representation claims ... include allegations of discrimination based on membership status or dissident views, which would be unfair labor practices under Sec. 8(b)(1) or (2). Aside from these clear cases, duty of fair representation claims are allegations of unfair, arbitrary, or discriminatory treatment of workers by unions--as are virtually all unfair labor practice charges made by workers against unions.

Id. at 170, 103 S.Ct. at 2294 (emphasis added).

More important, the Court stressed the "close similarity" in policy considerations relevant to the choice of a limitations period for both the hybrid action and unfair labor practice action. Id., at 171, 103 S.Ct. at 2294. It found that " 'the national interests in stable bargaining relationships and finality of private settlements,' " which necessitate a prompt resolution of labor related disputes, and " 'an employee's interest in setting aside what he views as an unjust settlement under the collective bargaining system,' " are considerations in both actions. Id., at 171, 103 S.Ct. at 2294, quoting United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 70, 101 S.Ct. 1559, 1568, 67 L.Ed.2d 732 (1981). Finding that the application of the proposed state limitations periods would frustrate federal interests, and that Congress adopted Section 10(b) with the competing interests of the government and employee in mind, the Court adopted the Section 10(b) limitations period for "hybrid 301/fair representation" actions. The Court emphasized, however, that its decision should not be taken as a departure from the general rule favoring the adoption of analogous state limitations periods.

Although Del Costello did not address the issue before this court, several circuits have applied the analysis of Del Costello to a LMRDA Section 101 claim, but with conflicting results. The majority of circuits considering the question have found Section 10(b) to be the most appropriate statute of limitations for Section 411 claims. See Davis v. United Auto Workers, 765 F.2d 1510 (11th Cir.1985), cert. denied, 475 U.S....