United Parcel Service, Inc v. Mitchell, No. 80-169

• Court: United States Supreme Court
• Writing for the Court: REHNQUIST
• Citation: 101 S.Ct. 1559,451 U.S. 56,67 L.Ed.2d 732
• Parties: UNITED PARCEL SERVICE, INC., Petitioner, v. William MITCHELL
• Docket Number: No. 80-169
• Decision Date: 20 April 1981

451 U.S. 56 101 S.Ct. 1559 67 L.Ed.2d 732 UNITED PARCEL SERVICE, INC., Petitioner,

v.

William MITCHELL.

No. 80-169. Argued Feb. 24, 1981. Decided April 20, 1981. Syllabus

After respondent employee had been discharged by petitioner employer for alleged dishonest acts, respondent requested his union to file a grievance contesting the discharge. The collective-bargaining agreement provided a grievance and arbitration procedure for the resolution of covered disputes. Respondent was represented by the union at an arbitration hearing which resulted in a decision upholding the discharge. Seventeen months later, respondent filed suit in Federal District Court against the union and petitioner under § 301(a) of the Labor Management Relations Act, alleging that the union had breached its duty of fair representation and that petitioner discharged him not for the stated reasons, which it knew to be false, but to replace full-time employees with part-time employees. The court granted summary judgment for the defendants on the ground that the action was barred by New York's 90-day statute of limitations for actions to vacate arbitration awards. The Court of Appeals >>reversed, holding that the District Court should have applied New York's 6-year limitations period for breach-of-contract actions.

Held : Given the choices present here, and the undesirability of the results of the grievance and arbitral process being suspended in limbo for long periods, the District Court properly chose the 90-day period for the bringing of an action to vacate an arbitration award. Cf. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231. Pp. 60-64.

(a) The timeliness of a § 301 suit is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations, and the determination of which limitations period is the most appropriate depends upon the nature of the federal claim and the federal policies involved. Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192. Pp. 60-61.

(b) Although not styled as one to vacate the arbitration award, respondent's suit, if successful, would have that direct effect. He raised the same claim that was raised before the arbitrators—that he was discharged in violation of the collective-bargaining agreement. He sought the same relief reinstatement with full backpay. While his underlying claim against his employer was based on the collective-

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bargaining agreement, the indispensable predicate for the § 301(a) action was not a showing under traditional contract law that the discharge was a breach of the agreement, but instead that the union breached its duty of fair representation. Since the arbitrators' conclusion was, under the collective-bargaining agreement, "binding on all parties," respondent was required to show that the union's duty to represent him fairly at the arbitration had been breached before he was entitled to reach the merits of his contract claim. Thus, the suit is more analogous to an action to vacate an arbitration award than to a straight contract action. Pp. 61-62.

(c) An employee's unfair representation claim against his union, even though his employer may ultimately be called upon to respond in damages if he is successful, is more a creature of "labor law" as it has developed since the enactment of § 301 than it is of general contract law. And one of the leading federal policies in this area is the relatively rapid disposition of labor disputes. The system of industrial self-government, with its heavy emphasis on grievance, arbitration, and the "law of the shop," could easily become unworkable if a decision which has given "meaning and content" to the terms of an agreement, and even affected subsequent modifications of the agreement, could suddenly be called into question as much as six years later. Pp. 63-64

624 F.2d 394, reversed.

Bernard G. Segal, Philadelphia, Pa., for petitioner.

David Jaroslawicz, New York City, for respondent.

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JUSTICE REHNQUIST delivered the opinion of the Court.

We are called upon in this case to determine which state statute of limitations period should be borrowed and applied to an employee's action against his employer under § 301(a) of the Labor Management Relations Act, 1947, 61 Stat. 156, 29 U.S.C. § 185(a), and Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976).

I

Petitioner United Parcel Service, Inc. (UPS), employed respondent Mitchell (respondent) as a car washer at its facility on Staten Island, N. Y. On January 13, 1977, respondent was discharged for dishonest acts, including falsifying his timecards and claiming payment for hours which he did not work. Respondent denied the charges against him and requested his union, Department Store and Wholesale Drivers, Warehousemen and Helpers, Local Union No. 177 (the Union), to file a grievance on his behalf contesting the discharge. UPS and the Union were parties to a collective-bargaining agreement which provided a grievance and arbitration procedure for the resolution of disputes covered by the agreement. App. 57-67. Pursuant to the agreement respondent's grievance was submitted to a panel of the Atlantic Area Parcel Grievance Committee, composed of three union and three company representatives (the Joint Panel). Cf. Hines v. Anchor Motor Freight, Inc., supra, at 557, n.2, 96 S.Ct., at 1053 n.2. The Joint Panel conducted a hearing, at which respondent was represented by the Union, and on February 16, 1977, it announced its decision that the discharge be upheld. App. 103-104. Under the collective-bargaining agreement this decision was "binding on all parties." Id., at 66; see id., at 103.

Seventeen months later, on July 20, 1978, respondent filed a complaint in the United States District Court for the East-

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ern District of New York against the Union and UPS under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). See Hines v. Anchor Motor Freight, Inc., supra. He alleged that the Union had breached its duty of fair representation and that UPS discharged him not for the stated reasons, which it knew to be false, but to achieve savings by replacing full-time employees with part-time employees. App. 7-13. Both UPS and the Union moved for summary judgment on the ground that the action was barred by New York's 90-day statute of limitations for actions to vacate arbitration awards. Section 7511(a) of the N.Y. Civ. Prac. Law (McKinney 1963) provides that "[a]n application to vacate or modify an [arbitration] award may be made by a party within ninety days after its delivery to him."

The District Court granted summary judgment in favor of UPS and the Union, ruling that respondent's action was properly characterized as one to vacate the arbitration award entered against him. The court reasoned; "The relief sought was expressly denied in an arbitration award issued as a result of a full-scale, arbitration proceeding. The effect of any grant of the relief sought . . . would be to vacate the determination of the arbitrators." App. 129. Respondent appealed and the Court of Appeals for the Second Circuit reversed. 624 F.2d 394 (1980). That court held that the District Court should have applied New York's 6-year limitations period for actions alleging breach of contract, N.Y.Civ.Prac.Law § 213(2) (McKinney 1972). It reasoned that respondent's action was analogous to a breach-of-contract action because the issues were whether the collective-bargaining agreement had been breached and whether the Union contributed to that breach by failure to discharge its duty of fair representation. The court further reasoned that a 6-year limitations period "provides for relatively rapid disposition of labor disputes without undermining an employee's ability to vindicate his rights through § 301 actions." 624 F.2d, at 397-398.

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We granted UPS' petition for certiorari. 449 U.S. 898, 101 S.Ct. 265, 66 L.Ed.2d 127 (1980).¹

II

Congress has not enacted a statute of limitations governing actions brought pursuant to § 301 of the LMRA. As this Court pointed out in Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 704-705, 86 S.Ct. 1107, 1112-13, 16 L.Ed.2d 192 (1966), "the timeliness of a § 301 suit . . . is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations." ² Our present task is to determine which limitations period is "the most appropriate one provided by state law." Johnson v. Railway Express Agency Inc., 421 U.S. 454, 462, 95 S.Ct. 1716, 1721, 44 L.Ed.2d 295 (1975). This depends upon an examination of the nature of the fed-

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eral claim and the federal policies involved. See Hoosier Cardinal, supra, at 706-707, 86 S.Ct., at 1113-14.

Although respondent did not style his suit as one to vacate the award of the Joint Panel, if he is successful the suit will have that direct effect. Respondent raises in his § 301 action the same claim that was raised before the Joint Panel—that he was discharged in violation of the collective-bargaining agreement. He seeks the same relief he sought before the Joint Panel reinstatement with full backpay. In sum, "it is clear that [he] was dissatisfied with and simply seeks to upset the arbitrator's decision that the Company did not wrongfully discharge him." Liotta v. National Forge Co., 629 F.2d 903, 905-906 (CA3 1980), cert. pending, No. 80-890.³

The Court of Appeals purported to rely on this Court's decision in Hines v. Anchor Motor Freight, Inc., but that decision strongly supports borrowing the limitations period for actions to vacate arbitration awards. As Hines makes clear, an employee may go behind a final and binding award under a collective-bargaining agreement and seek relief against his employer and union only when he demonstrates that his union's breach of its duty "seriously undermine[d] the integrity of...