Union News Company v. Hildreth

• Decision Date: 09 November 1961
• Docket Number: No. 14224.,14224.
• Citation: 295 F.2d 658
• Parties: UNION NEWS COMPANY, a New York Corporation, Defendant-Appellant, v. Gladys HILDRETH, Plaintiff-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

295 F.2d 658 (1961)

UNION NEWS COMPANY, a New York Corporation, Defendant-Appellant, v. Gladys HILDRETH, Plaintiff-Appellee.

No. 14224.

United States Court of Appeals Sixth Circuit.

October 2, 1961.

As Amended November 9, 1961.

Lester S. Moll, Moll, Desenberg, Purdy & Glover, Detroit, Mich., for appellant.

Dee Edwards, Detroit, Mich., for appellee, Harold Sleeper, Detroit, Mich., on the brief.

Before MILLER, Chief Judge, and CECIL and O'SULLIVAN, Circuit Judges.

O'SULLIVAN, Circuit Judge.

This is an appeal by defendant-appellant, Union News Company, from a judgment for $5,000.00 entered upon a jury verdict in favor of plaintiff-appellee, Gladys Hildreth. Her complaint charged that she had been discharged from defendant's employ without just cause, in breach of a collective bargaining agreement between defendant and the Hotel and Restaurant Employees and Bartenders International Union, AFL, Detroit Local Joint Executive Board, hereinafter referred to as the Union. Damages awarded included wages lost by plaintiff between her discharge and the time of trial and damages she claims she will suffer through loss of seniority as defendant's employee.

Defendant operated a soda fountain and lunch counter at the Michigan Central Railroad terminal at Detroit. Plaintiff was one of a crew of eleven or twelve persons employed at said counter. She had been employed at the Detroit terminal for about ten years, and was a member of the Union. During the period of plaintiff's employment, the Union was the designated exclusive bargaining representative of defendant's employees. The current agreement between the Union and defendant, dated October 15, 1957, was to run for one year with the usual provision for automatic yearly renewals unless terminated by either party.

Material and relevant to the issues on this appeal are the following paragraphs of the Collective Bargaining Agreement:

"14. No regular employe covered by this Agreement shall be discharged except for just cause. In the event of a claim by the Union that an employe has been discharged without just cause, such claim must be filed with the manager of the unit within five (5) days and disposed of by him within five (5) days thereafter. If the matter cannot be satisfactorily adjusted between the Union and the employer\'s manager, the same shall be promptly referred to the employer\'s home office at 131 Varick Street, New York City.

"15. Any and all questions and discussions which at any time may arise affecting the employes of the employer shall be taken up with the manager of the unit involved at such time and place as will be mutually agreed upon between the Union and the manager.

* * * * * *

"17. During the term of this agreement, any question arising hereunder which cannot be directly and satisfactorily adjusted between the Union and the employer shall be referred to a Committee which shall consist of one member representing the Union, one representing the employer, and a third member to be mutually agreed upon by the employer and the Union, and the decision of any two (2) members of such Committee shall be final and binding upon the parties hereto."

On March 14, 1958, plaintiff was laid off by defendant. Her layoff matured into a discharge as discussed hereinafter. For a period of nine to twelve months prior to plaintiff's discharge, the manager of defendant's enterprise was concerned about its cost experience at the counter where plaintiff worked. There was evidence that in the type of business there being carried on, efficient and honest work by counter employees should result in food costs being something less than 40% of the amount of gross sales; that a percentage of 35% to 37% in that regard is considered good; and that where the cost of merchandise reaches a figure above 40% of the amount of gross sales, it is indicative of a "poor operation" resulting from mishandling of merchandise and money by employees. Such mishandling could include dishonesty. From January, 1957, through February, 1958, this percentage was running rather uniformly above the 40% figure and was the cause of continuing discussions between defendant's manager and the Union. Defendant was unable to ascertain which of, and how many of, its counter employees were guilty of the misconduct causing its bad experience. Its manager suggested to the Union that the only solution was the replacement of all, or some of, the crew. The Union refused at first, suggesting less drastic measures such as talking to the girls and telling defendant's manager to "do the best you can and we will look into it further." Conditions did not improve, and in early 1958 defendant's manager opened its books to the business agents of the Union who made their own examination and analysis of defendant's continuing problem. In February, 1958, the food cost percentage was the highest, but one, of any of the preceding twelve months. Union representatives made their own analysis of the records of defendant and concluded that some action had to be taken to remedy the situation. Defendant's manager suggested that the entire crew on the soda and lunch counter be replaced. The Union representative felt that such action was too drastic and between the Union agent and defendant's manager, it was agreed that five of the counter employees be given a three day layoff and be replaced by new employees. There was then to be a trial period of ten days to two weeks to see whether such change of crew would bring about an improvement. It was agreed that if improvement came it would demonstrate that the laid off employees were, at least partially, the cause of the trouble. In such case, the laid off employees would not be rehired. It was further agreed that if conditions did not improve following the layoff, such experience would exculpate the laid off employees of fault and they would be rehired and paid the wages lost during the period of the layoff. The laid off employees were replaced by other members of the Union. Following the replacement of the five employees, one of whom was the plaintiff, defendant's operation did improve and for the month of March the percentage of food costs to sales dropped from 43.46% for February to 39.90% for March and to 35.90% for April. This percentage remained below 40% for the entire balance of 1958, except for the month of August. In the week following the layoff, the cash receipts of the counter in question were $250.00 more than the final week with the old crew. After about ten days of the new operation, the Union agreed with defendant that it had proved its point and the replacement of the five employees became permanent. On the trial, plaintiff, to some extent, challenged the validity of the conclusions of the Union and defendant as to the significance of the food cost figures. However, there was no evidence of bad faith in the reliance of the Union and defendant upon such analysis.

After learning that she had been replaced, plaintiff took the matter up with her Union. On March 24th, a meeting was had at which the Union and defendant's representatives were present, as well as plaintiff and the other replaced employees. At this meeting, defendant's representative told plaintiff that she was laid off under Code No. 12, which meant "change of crew without prejudice." Such a termination of employment, the company representative said, would not disqualify plaintiff for unemployment compensation. When first laid off, she was told that it was for the good of the Union News Company, with mention being made of the bad condition at the fountain. She was told that the matter had already been cleared with the Union. Except for this meeting of March 24, plaintiff made no further contact with defendant until her attorney wrote a letter to it some months later. Plaintiff continued for a time to press for action by her Union. She was told that the Union was convinced that her discharge was for just cause. With the other discharged girls, she met with Union officers at the various levels of authority, and with the Union's grievance committee. This committee referred the matter to the Executive Board of the Union, and final consideration of it was had at a meeting of the Executive Board in June following the discharge. Plaintiff was present at this meeting. No action was taken by the Board and no grievance was ever presented by the Union on Plaintiff's behalf.

Between May 6, 1958, and November 14, 1958, there was an exchange of correspondence between plaintiff's attorney, the Union News Company, and the latter's counsel. Plaintiff's attorney, on May 6, 1958, and on behalf of plaintiff and the other discharged employees, demanded that Union News Company "meet with us for the purpose of continuing the processing of the grievance in accordance with their rights under the law." This letter was unanswered and on May 31 the attorney advised the Union News that unless it set a time for a meeting, "with the above named persons and the writer, to process their grievances arising out of their wrongful discharge by you, legal action will be instituted to enforce their rights." This letter advised that a copy of it was being sent to the Union "in accordance with the provisions of Sec. 9 of the Taft-Hartley Act, to enable them to be present, but they will not participate in said grievance processing." In October, defendant's counsel advised that it was willing to proceed with grievance and arbitration proceedings as provided for in the bargaining agreement. Plaintiff's counsel however, advised that, "It is the intention of the grievants to process their own grievances, as provided by the Taft-Hartley Act (29 U.S.C.A. § 159) assisted by myself." Nothing further was done in this regard.

On July 11, 1958, the complaint in this case was filed. Its prayer for relief asked:

"A. That defendant may be ordered to meet with plaintiff for the purpose of processing her grievance out of her wrongful discharge, as provided by 29

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