Young v. Internatl. Bhd. of Locomotive Engineers

• Decision Date: 30 September 1996
• Docket Number: 69582,Nos. 69317,s. 69317
• Citation: 114 Ohio App.3d 499,683 N.E.2d 420
• Parties: YOUNG, Appellee, v. INTERNATIONAL BROTHERHOOD OF LOCOMOTIVE ENGINEERS, Appellant. Eighth District, Cuyahoga County
• Court: Ohio Court of Appeals

Page 499

114 Ohio App.3d 499

683 N.E.2d 420

YOUNG, Appellee, v. INTERNATIONAL BROTHERHOOD OF LOCOMOTIVE ENGINEERS, Appellant.

Nos. 69317, 69582.

Court of Appeals of Ohio,

Eighth District, Cuyahoga County.

Decided Sept. 30, 1996.

Reminger & Reminger Co., L.P.A., and Nicholas D. Satullo, Cleveland, for appellee.

Nurenberg, Plevin, Heller & McCarthy Co., L.P.A., Joel Levin, John J. McCarthy, J. Charles Ruiz-Bueno, John Schloss and Kathleen J. St. John, Cleveland, for appellant.

NAHRA, Judge.

Appellee, Janet Young, sued appellant, International Brotherhood of Locomotive Engineers, for breach of a contract of employment. Appellant is appealing the jury verdict in favor of appellee, Janet Young, in case No. 69317. Appellant appeals the award of prejudgment interest to appellee in case No. 69582. For the following reasons, we affirm.

This case was previously before our court in Young v. Internatl. Bhd. of Locomotive Engineers (June 24, 1993), Cuyahoga App. No. 62771, unreported, 1993 WL 227069, and we reversed a summary judgment for appellant. Therein we held that there were genuine issues of material fact as to whether the union president, John Sytsma, had actual or apparent authority to make the contract, and as to whether the union ratified the contract. Appellant had argued that the contract was void as contrary to the Labor Management Reporting and Disclosure Act, Section 401 et seq., Title 29, U.S.Code, but did not argue federal preemption.

On remand, trial was had and the jury returned a verdict of $366,988.11. The trial court granted appellee's motion for prejudgment interest.

Appellee was employed by appellant as Director of Health and Welfare and Director of Taxes. Appellee was not a union member. Her job consisted of bookkeeping for the pension fund and employee benefits fund and collecting of taxes. She served as a liaison between the union members and the insurance companies and retirement board. Her supervisors described her work as "administrative," and more than merely clerical. Appellee was not involved in policy-making for the union.

Appellee was a friend of and politically connected to the union's president, John Sytsma. In 1986, Sytsma, was up for re-election. Sytsma requested that the law firm of Chattman, Garfield, Friedlander & Paul write employment contracts for appellee and two other employees, Simmerman and Loomis.

The contracts were dated August 18, 1986, but were drafted several days beforehand. It was not established when Sytsma signed the contracts. On August 18, the union convention of delegates had assembled to elect a new president. The union constitution provides that when the convention is in session, the delegates of the convention are the governing body of the union.

Sytsma did not win the election and was replaced by Delaney as president. Delaney resigned in 1987, and was replaced by the vice president, Larry McFather.

Appellee's contract provided a term of employment of ten years. Appellee could be discharged only for just cause. The contract provided for liquidated damages of $50,000 for each full year remaining of the contract's term if appellee was discharged without just cause.

Copies of the contract were never sent to the union. The attorney who prepared the contracts, Wolgamuth, and Simmerman, an employee who received a contract, testified that Sytsma told them to keep the contract a secret. Sytsma denied this and stated that he discussed the contract with two union officials, who were now deceased. Rinehart, a member of the union's executive committee, stated that Delaney told him about the contract in September 1986, and that McFather knew about the contract. The union's attorney, Harold Ross, and Larry McFather testified that they were not made aware of the contract until the instant lawsuit was filed.

Appellee believed that Sytsma had the authority to make the contract because the president had the authority to hire and fire without consulting the executive committee or advisory board. The president made other contracts extending beyond his term, including contracts with the railroads, insurance companies and building maintenance. Sytsma and Rinehart believed that Sytsma had the authority to make the contract. The union constitution did not provide for or prohibit such a contract. McFather stated that Sytsma did not have the authority, because if the constitution does not provide for an action, there must be a policy set by the advisory board or convention delegates. No union employee had ever received an employment contract. Additionally, McFather asserted that the president had no authority to do anything on August 18, because the convention was in session.

McFather terminated appellee on April 17, 1989, almost three years after the contract was made and the change in union leadership occurred. McFather stated that other employees told him appellee was insubordinate and uncooperative and had made derogatory remarks about McFather. Employees Bobby Crawford and Harry Volpe testified that appellee made derogatory remarks and was uncooperative. Dennis Simmerman testified that appellee urged him not to cooperate with the new administration to show their loyalty to John Sytsma.

Appellee denied making such remarks and stated that she cooperated. Rinehart testified that appellee cooperated. An auditor from Peat, Marwick and Main testified that appellee cooperated with the audit.

I

Appellant's first assignment of error states:

"The trial court was without jurisdiction to hear Janet Young's breach of contract action, as that action is preempted by federal law."

Appellant moved for summary judgment and directed verdict, arguing that appellee's action for breach of contract was preempted by the Labor Management Reporting and Disclosure Act of 1959 ("LMRDA"), Sections 401 et seq., Title 29, U.S.Code. Other jurisdictions have held that an employee's state causes of action for breach of contract and wrongful discharge are preempted by the LMRDA, if the employee is a policy-making or confidential employee removed by new union leadership for political reasons. See Coker v. Culinary Hotel & Motel Serv. Workers' Union, Local 226 (Aug. 12, 1993), C.A.9, No. 92-15799, unreported, 1993 WL 364472; Hurley v. Teamsters Union Local No. 856 (May 1, 1995), N.D.Cal. No. C-94-3750, unreported, 1995 WL 274349; Montoya v. Local Union III of the I.B.E.W. (Colo.App.1988), 755 P.2d 1221; Screen Extras Guild, Inc. v. Superior Court (1990), 51 Cal.3d 1017, 275 Cal.Rptr. 395, 800 P.2d 873. These cases are based upon a United States Supreme Court case which held that an employee's cause of action under the LMRDA for discharge by newly elected union leadership was contrary to the purpose of the LMRDA of providing for free elections of union officials, if the employee was a confidential or policy-making employee. Finnegan v. Leu (1982), 456 U.S. 431, 102 S.Ct. 1867, 72 L.Ed.2d 239. Under the LMRDA, newly elected union officials must be free to discharge incumbent policy-making and confidential employees. Otherwise, these employees may thwart the implementation of policies and programs advanced by the elected officials and frustrate the will of the electorate. Id.; Screen Extras Guild; Montoya; Hurley, supra.

Whether this action is preempted by federal law turns on the factual issue of whether appellee was a policy-making or confidential employee. A purely clerical employee, such as a secretary/bookkeeper, is not the type of employee to whom preemption applies. See Lyons v. Teamsters Local Union No. 961 (Colo.App.1995), 903 P.2d 1214. However, Finnegan has been applied to situations involving policy-implementing employees, although these employees do not make union policy. Genco v. U.A.W., Local 1005 (N.D.Ohio 1989), 721 F.Supp. 879, affirmed (C.A.6, 1990), 907 F.2d 150; Cehaich v. Internatl. Union, U.A.W. (C.A.6, 1983), 710 F.2d 234. Cehaich specifically held that a benefits representative who implemented key union policy should be considered a "policy-making or confidential" employee.

The evidentiary materials submitted with and in opposition to appellant's motion for summary judgment established that appellee handled correspondence and paperwork for various employee benefit programs; that mistakes by appellee could result in union members' losing benefits or penalties to the union; that she had access to workers' job descriptions, salaries and records of employment; that it was important that the union members felt comfortable with calling her if they had problems; and that a great deal of her duties were taken over by the computer which was installed in 1989. Based on this evidence, reasonable minds could reach different conclusions as to whether appellee was involved in implementing key union policy or had access to confidential information, such that she could thwart the policy objectives of new union officials. The trial court did not err in denying appellant's motion for summary judgment, because there were genuine issues of material fact.

The testimony at trial was clear that appellee did not make union policy. The evidence was such that reasonable minds could reach different conclusions as to whether appellee was involved in implementing key union policy. The trial court did not err in denying appellant's motion for a directed verdict. We also note that appellant failed to renew its motion for directed verdict at the close of all the evidence. See Helmick v. Republic-Franklin Ins. Co. (1988), 39 Ohio St.3d 71, 529 N.E.2d 464.

Appellant asserts that the trial judge precluded appellant from requesting jury instructions or interrogatories as to the issue of whether appellee was a "confidential or policy making" employee. The trial judge ruled that this case was not preempted by the LMRDA because the court of appeals must have so decided in the previous appeal, Young v. Internatl. Bhd. of Locomotive Engineers (June 24, 1993), Cuyahoga App. No. 62771, unreported, 1993 WL...