Shea v. International Ass'n of Machinists and Aerospace Workers

• Decision Date: 14 September 1998
• Docket Number: No. 97-10490,97-10490
• Citation: 154 F.3d 508
• Parties: 159 L.R.R.M. (BNA) 2257, 136 Lab.Cas. P 10,250 Elizabeth A. SHEA, et al., Plaintiffs, Elizabeth A. Shea; Jan Christy; Peggy Gallerani; Victor Garza; Norma Kunzler; Josephine Morton; Debbie Nickell; Donna Rozenburg; Jamie Selva, Plaintiffs-Appellants, v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, an unincorporated association, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 508

154 F.3d 508

159 L.R.R.M. (BNA) 2257, 136 Lab.Cas. P 10,250

Elizabeth A. SHEA, et al., Plaintiffs,

Elizabeth A. Shea; Jan Christy; Peggy Gallerani; Victor

Garza; Norma Kunzler; Josephine Morton; Debbie

Nickell; Donna Rozenburg; Jamie Selva, Plaintiffs-Appellants, v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE

WORKERS, an unincorporated association, Defendant-Appellee.

No. 97-10490.

United States Court of Appeals, Fifth Circuit.

Sept. 14, 1998.

Robert F. Gore, Springfield, VA, for Plaintiffs-Appellants.

Gary S. Witlen, Upper Marlboro, MD, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before GARWOOD, JOLLY and HIGGINBOTHAM, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiffs-appellants (Appellants) are Southwest Airlines (Southwest) customer service agents who are represented by the defendant-appellee International Association of Machinists and Aerospace Workers (IAM) pursuant to a union shop agreement. Appellants contend that the IAM's annual objection requirement, whereby an employee can opt out of full union membership only if he notifies the union in writing every year, violates their rights under the Railway Labor Act, 45 U.S.C. § 151 et seq. (RLA). The district court granted summary judgment in favor of the IAM, finding that the IAM's procedures do not violate the union's duty of fair representation. We disagree with the district court, and reverse the grant of summary judgment.

Facts and Proceedings Below

Because Southwest is a "carrier by air," its labor relations are governed by the RLA. See 45 U.S.C. § 181. Under Section 2, Eleventh of the RLA, an employer and a union can enter into "union shop agreements" whereby all employees must become members of the union as a condition of continued employment. See 45 U.S.C. § 152, Eleventh. Pursuant to this section, Southwest and the IAM entered into such an agreement, which is included as a union security clause in their collective bargaining agreement. This union security clause requires that the Southwest employees who are represented by the union either become members of the union or financially support the union as a condition of continued employment by Southwest.

Appellants chose not to become members of the union, but, in accordance with the union shop agreement, they paid an agency fee to the union for their pro rata share of the expenses incurred by the union in providing representational services to the employees.

The current dispute between the IAM and the appellants concerns the IAM's objection procedures, that is, the procedures by which employees are required to notify the union that they will not become members and will only pay the objector fee. The IAM's objection procedure requires that the objectors provide the IAM with written notice during a 30-day window period every year. The IAM does not honor written (or other) "continuing objections," and thus the objector must renew his written objection every year or he will be obligated to pay full union dues. The sole issue before this Court is whether the annual objection renewal requirement is permissible as applied to written continuing objections.

As a reminder of this annual objection requirement, the IAM publishes a notice to its dues objectors in its newsletter, "The Machinist." From 1990 through 1993, the notice was published in the December issue of "The Machinist," reminding the objectors to renew their objection during the upcoming January 30-day window period. "The Machinist" was not published in December of 1994, so the notice for the 1995 year was printed in the November 1994 issue.

The IAM maintains a database to keep track of employees and designates them as "members," "nonmember agency fee payors," or "objecting nonmember agency fee payors." An employee who objects is designated as an "objecting nonmember agency fee payor." If that employee renews his objection the following year, he remains an "objecting nonmember agency fee payor"; if he fails to object, however, he is redesignated as a "nonmember agency fee payor." If a new employee does not object to becoming a member of the union, he is automatically designated a "member," and he does not have to provide any notice to renew his membership.

The purpose of the database is to allocate the union's annual expenses as "chargeable" and "non-chargeable." An objecting member is not required to fund the "non-chargeable" expenses because they are not related to the union's representational services. Many of these non-chargeable expenses have been defined by the Supreme Court, and include expenses for political activities and other activities that are not related to collective bargaining. According to the IAM, the costs of collective bargaining and other activities are allocated among the members and nonmembers every year, and an amount is determined that fee objectors must pay for the following year. All employees are then sent a notice that indicates what percentage of their dues were spent on collective bargaining activities, the reduced amount which must be paid by fee objectors, and the requirements for becoming/remaining fee objectors.

All nine appellants filed objections in 1990, 1991, and 1992, but only five filed objections in 1993. None of the appellants' objections were received by the IAM during the 1994 window period. The reason for this was that the IAM had moved its headquarters two years earlier. The address of the new headquarters was listed in the annual notice, but appellants, who did not then realize this, continued to mail their objections to the old address. By January of 1994 the forwarding order had expired and the objection letters were returned to appellants. Upon receiving the returned objections, appellants resubmitted their objections to the correct address after the window period had ended, but these objections were rejected by the IAM as untimely. Because they did not file objections during the required window period, the appellants became obligated to pay an agency fee that was equivalent to full union dues; the reduced annual agency fee for an "objecting nonmember agency fee payor" would have been approximately $42 less than the full fee.

In order to avoid this liability for full dues, appellants relied on written "continuing objections" to any noncollective bargaining related expenditures that they had filed in earlier years. Since 1989, each of the appellants had filed at least one such written objection that contained the statement, "the objection is to be considered as a continuing objection and remain in force from year-to-year until canceled by me." The IAM, however, does not recognize continuing objections, and instead requires objectors to renew their objections annually.

Appellants challenged this annual renewal requirement, arguing that their written continuing objections ought to be recognized and honored. The district court rejected this argument and granted the IAM's motion for summary judgment and dismissed the case. The district court applied the Duty of Fair Representation standard (DFR standard) and held that neither the thirty-day window period nor the annual renewal requirement violated the IAM's duty to fairly represent the interests of all employees in its collective bargaining unit.

Discussion

In 1934, Congress made major revisions to the Railway Labor Act of 1926 that significantly strengthened the position of the union towards the carrier. One important revision was that the union selected by a majority of employees in the bargaining unit was deemed the exclusive bargaining agent of all those employees, regardless of whether they were union members. 45 U.S.C. § 152, Ninth. On its face, this provision of the RLA requires only that this exclusive bargaining agent act on behalf of all employees, but it does not explicitly require that the exclusive bargaining agent act equitably toward all employees. There is thus no explicit statutory directive that the union fairly represent the minority interests of certain classes of employees. To curb abuses, the courts created a duty of fair representation. This judicially created duty of fair representation dictates that the exclusive bargaining agent has the duty not to just represent all employees, but to represent them equitably and fairly, regardless of their class, or whether they are union members. See generally 2 The Developing Labor Law 1409 (Patrick Hardin, ed., 3d ed.1992).

This duty of fair representation was first announced in Steele v. Louisville & Nashville R.R., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944), where the Supreme Court held that a union could not exercise its statutory power as exclusive bargaining representative in a manner that discriminated against employees who were not, and could not become, union members because of their race. The Steele Court reasoned that when Congress conferred exclusive representative bargaining power on the union, it implicitly created a duty to act fairly toward all employees. See Steele, 65 S.Ct. at 232 (1944) (finding that the RLA implicitly "expresses the aim of Congress to impose on the bargaining representative of a craft or class of employees the duty to exercise fairly the power conferred upon it in behalf of all those for whom it acts without hostile discrimination against them."). The Court further held that if the duty of fair representation was violated, an individual union member could seek "the usual judicial remedies of injunction and award of damages...." Id. at 207, 65 S.Ct. at 234. ¹ In Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967), the Supreme Court specifically defined the DFR standard. The Court stated that a union breaches its duty of fair representation when its actions are "arbitrary, discriminatory, or in bad faith." Id. at 190, 87 S.Ct. at 916.

Steele created the duty of fair representation in the context of a racially discriminatory union...