ALEXANDER v. SVC MANUFACTURING, INC., 1:12-cv-01636

Plaintiffs are former hourly employees at PepsiCo’s Indianapolis manufacturing facility (employed by SVC Manufacturing, a Stokely Van‑Camp subsidiary) who were terminated in 2012 and claim unpaid accrued vacation pay.
A collective bargaining agreement (CBA) between SVC and the Union governed vacation pay and included a four‑step grievance procedure culminating in binding arbitration (effective June 7, 2010–June 2, 2013).
Plaintiffs sent a demand letter to Defendants on August 22, 2012 and filed an Indiana wage‑claims suit in state court on October 11, 2012; the Indiana AG authorized pursuit of the claims on October 1, 2012.
Defendants removed the case to federal court and moved to dismiss for failure to exhaust contractual remedies and, alternatively, argued that parent company Stokely was improperly named.
The Court previously held Plaintiffs’ state‑law wage claims were preempted by § 301 of the LMRA, bringing the dispute within federal § 301 jurisprudence (thus requiring contractual exhaustion/arbitration remedies).
The Complaint alleged only that Plaintiffs sent a letter requesting payment and did not plead completion of the CBA grievance/arbitration procedure.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiffs were required to exhaust the CBA grievance/arbitration process before suing under § 301	Plaintiffs proceeded under state wage statute and submitted a demand letter seeking payment	Defendants argue § 301 preemption means this is a breach of CBA claim and Plaintiffs must exhaust the CBA grievance/arbitration procedure before litigating	Court: Plaintiffs failed to plead exhaustion; § 301 requires exhaustion; dismissal warranted
Whether parent company Stokely was a proper defendant	Plaintiffs named both SVC and Stokely in the complaint	Defendants argue Stokely was improperly named because it was only the parent corporation	Court: Did not reach or decide this issue because dismissal for failure to exhaust was dispositive

Atchley v. Heritage Cable Vision Assoc., 101 F.3d 495 (7th Cir. 1996) (§ 301 claims require exhaustion of contractual grievance/arbitration procedures; dismissal appropriate where exhaustion not pled)
DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151 (1983) (suit for breach of CBA is governed by federal § 301 and requires resort to contractual arbitration scheme)
Smith v. Colgate‑Palmolive Co., 943 F.2d 764 (7th Cir. 1991) (federal courts require exhaustion of collective‑bargaining grievance procedures for § 301 claims)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: allegations must plausibly suggest liability and courts need not accept legal conclusions as true)