United Transp. Union, Local 74 v. Consolidated Rail Corp.

• Decision Date: 16 October 1989
• Docket Number: No. 88-3770,88-3770
• Citation: 881 F.2d 282
• Parties: 131 L.R.R.M. (BNA) 3145, 58 USLW 2102, 112 Lab.Cas. P 11,412 UNITED TRANSPORTATION UNION, LOCAL 74, Plaintiff-Appellant, v. CONSOLIDATED RAIL CORP., Defendant, United Transportation Union, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 282

881 F.2d 282

131 L.R.R.M. (BNA) 3145, 58 USLW 2102,

112 Lab.Cas. P 11,412

UNITED TRANSPORTATION UNION, LOCAL 74, Plaintiff-Appellant, v. CONSOLIDATED RAIL CORP., Defendant United Transportation Union, Defendant-Appellee.

No. 88-3770.

United States Court of Appeals Sixth Circuit.

Argued April 17, 1989.

Decided July 31, 1989.

Rehearing and Rehearing En Banc Denied Oct. 16, 1989.

Thomas J. Murray, Jr. (argued), Murray & Murray, Sandusky, Ohio, for plaintiff-appellant.

Clinton J. Miller, III (argued), Office of General Counsel, United Transp. Union, Cleveland, Ohio, for defendant-appellee.

Before WELLFORD and GUY, Circuit Judges; and PECK, Senior Circuit Judge.

JOHN W. PECK, Senior Circuit Judge.

This duty of fair representation case under the Railway Labor Act, 45 U.S.C. Sec. 151 et seq., was resolved in favor of defendant United Transportation Union ("UTU") in a bench trial, following the district court's grant of UTU's motion to strike the jury demand made in plaintiff United Transportation Union, Local 74's ("Local 74") Second Amended Complaint. For the reasons stated below, we conclude that Local 74 was entitled to the jury trial that it requested. We further hold that there are facts upon which reasonable jurors could conclude both that it would have been futile for Local 74 to continue to pursue internal union remedies and that UTU breached its duty of fair representation; therefore, a directed verdict would not have been appropriate and denial of Local 74's demand for a jury trial was not harmless error. See, e.g., Laskaris v. Thornburgh, 733 F.2d 260, 264 (3d Cir.), cert. denied, 469 U.S. 886, 105 S.Ct. 260, 83 L.Ed.2d 196 (1984); Cox v. C.H. Masland & Sons, Inc., 607 F.2d 138, 145 (5th Cir.1979).

I. Background

On April 1, 1976, eight separate bankrupt railroads, including Erie Lackawanna ("EL") and Penn Central ("PC"), were merged by Congress to form Consolidated Rail Corporation (Conrail), ¹ a multi-state rail carrier operating primarily in the northeast quadrant of the United States, under the Regional Railroad Reorganization Act ("3R Act"), 45 U.S.C. Secs. 701 et seq. ² UTU is a national labor organization engaged primarily in representing railroad employees for the purpose of collective bargaining throughout the United States pursuant to the Railway Labor Act, 45 U.S.C. Secs. 151 et seq. Local 74 is a local constituent of UTU and represents, among others, the former EL employees who worked as trainmen (conductors, brakemen and switchmen) and firemen at the Marion, Ohio yard and on the road. When Conrail came into being, it consolidated former PC and EL yards in the Ohio cities of Marion, Akron, Dayton and Mansfield. As a result of the merger, the number of switchmen needed in EL's former yard operations in Marion dropped immediately from 36 to 9, and eventually down to 3. As of the date of trial, the EL workers had not obtained a single yard job in any Conrail switching yard to which their work was allegedly diverted. However, they did get some road work three years after Conrail's formation.

Local 74 asserts that most of this lost yard work was diverted to former PC switching yards in other Ohio cities. Immediately upon Conrail's formation, the entire main line of the former EL between Chicago and Marion was abandoned; Local 74 claims that the road and yard work that was done at the Marion yard prior to the merger was diverted to the east/west routes of the former PC railroad. Local 74 further maintains that the majority former PC workers controlled UTU and precluded minority former EL workers from obtaining the equity due them in preserving their former work under federal law, existing contracts, and the UTU constitution.

The Act under which Conrail was organized provided that Conrail would initially assume all existing collective bargaining contracts and then negotiate new ones. 45 U.S.C. Sec. 772(b) (1976) (repealed 1981). The labor organizations were to negotiate with Conrail as to the procedure for determining seniority, and, "to the extent possible, preserve [workers'] prior seniority rights." 45 U.S.C. Sec. 774(b) (1976) (repealed 1981). Workers with seniority on "the lines, properties, or facilities acquired" were to have prior seniority roster rights on those lines, properties, or facilities. 45 U.S.C. Sec. 774(a) (1976) (repealed 1981). UTU and Conrail negotiated a bargaining agreement, effective April 1, 1976. All employees were merged into a "dove-tailed" seniority roster according to date of hire by the original railroads. Each employee was given an overriding prior right to positions in the operating area of his former railroad. See Ratkosky v. United Transportation Union, 843 F.2d 869, 871-72 (6th Cir.1988). The agreement also stated that:

When assignment, allocation, reallocating, reassignment or consolidation of work ... takes place, the parties will meet to determine an equitable allocation of work involved on a prior right seniority basis. The allocations will be determined on the basis of one or more of the work measurement factors listed below, but not limited to such factors:

1. Engine hours.

2. Cars dispatched.

3. Train miles and/or car miles.

4. Track miles.

The corporation will furnish all available data necessary for such allocation.

Article 90 of UTU's Constitution also dealt with employee rights following a permanent diversion of work from one carrier to another, by providing that a "General Committee of Adjustment" would arrange a "fair and equitable division of the work," which would preserve prior seniority rights to the extent possible.

UTU management operates on three levels. At the local level, a local chairperson handles members' business, including employee grievances. There have been two or three local chairpersons for Local 74 at all times since 1976. At the intermediate level, there are several General Committees that are authorized to bargain collectively on behalf of their respective locals. At the third, or international, level, there are a president and several vice presidents, and a Board of Appeals, which is the highest body for resolution of internal disputes. Article 75 of the UTU Constitution provides with respect to appeals that "a subordinate body may appeal an action or decision against it to an appropriate Board of Appeals, provided such appeal is filed with the General Secretary and Treasurer within ninety (90) days from the date the action or decision occurred."

Immediately following the merger in 1976, UTU assigned a representative to pursue the former EL workers' rights. The representative promptly asserted the workers' rights, seeking first to show road equity on the theory that establishing road equity would automatically show a right to yard equity. A temporary agreement for road work out of Toledo, Ohio was obtained, but was resisted by UTU General Chairman Swert, who claimed that Local 74 could show no equity in the merged system because it could not identify the particular trains that had been diverted. UTU's vice president rejected Swert's view, finding that some portion of the former EL work had been diverted to PC yards. This decision was appealed to the Union Board of Appeals by representatives of several former PC groups; in denying the appeal the Board stated that there is no such thing as an "identifiable" train, so equity must be determined on other bases. It appears that some road jobs for EL workers resulted from this sequence of events (ending in 1979); however, no yard jobs were obtained and Local 74 asserts that, unbeknownst to it or the workers (and contrary to the assurances of their appointed representative), yard jobs for former EL employees had not even been negotiated with UTU at that point. Local 74 contends that the availability of reliable data for determining an equity claim declined as time elapsed.

In 1979, Chairman Swert was assigned by UTU as Local 74's committee representative. The employees continued to pursue their claims. In 1981, Local 74 representatives pressed UTU with their claim for yard work for the former EL workers. Vice-president J.R. Wells was assigned to the dispute. In October 1981, Wells reported the impossibility of establishing the exact location of any group's equity, and recommended simply merging seniority rosters. The UTU president did not act on this recommendation, but rather referred Local 74 back to Swert and the PC representatives, dismissing Wells from any duties in relation to the dispute. In 1982, Local 74's counsel wrote a letter on behalf of Local 74 to the UTU president requesting a dovetail of seniority rosters or other equitable remedy for the former EL yard workers. The president responded by again referring the matter back to Swert. Two months later, Local 74 filed this action.

Local 74's Second Amended Complaint set forth numerous allegations of arbitrary, discriminatory and bad faith conduct by UTU in failing to respond to Local 74's inquiry concerning yard jobs. In its prayer for relief, Local 74 requested compensatory and punitive damages, as well as "an injunction ordering and requiring defendants to immediately take all reasonable and necessary steps to obtain for plaintiffs a fair and equitable division of all former EL work which has been diverted since April 1, 1976 to former PC terminals." Local 74 concedes that compensatory damages are mitigated to the extent former EL workers received any monthly displacement allowances between 1976 and 1981 under 45 U.S.C. Sec. 775(b) (1976) (repealed 1981). ³

II. Right to Jury Trial

There is a conflict among the circuits as to the right to a jury trial in the context of breach of duty of fair representation cases in which legal remedies are sought. ⁴ The unchallenged rule prior to two Supreme Court rulings, United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981) and DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76...