Stephen T. AGUINAGA; Wayne Pappan; Janet Brown,
individually and in behalf of all Union Members
similarly situated, Plaintiffs-Appellants,
v.
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION;
United Food and Commercial Workers, Defendants-Appellees.
Nos. 92-3091, 92-3093.
United States Court of Appeals,
Tenth Circuit.
May 19, 1993.
Ken M. Peterson, Morris, Laing, Evans, Brock & Kеnnedy, Chartered, Wichita, KS (Robert W. Coykendall, Morris, Laing, Evans, Brock & Kennedy, Chartered, Robert C. Brown, Patricia M. Dengler, Smith, Shay, Farmer & Wetta, with him on the brief), for plaintiffs-appellants.
Laurence Gold, AFL-CIO Legal Dept., Washington, DC (Harry Huge, Steven K. Hoffman, Annette M. Capretta, Donovan Leisure, Rogovin, Huge & Schiller, Richard Roesel, United Food & Commercial Workers Intern. Union, with him on the brief), for defendants-appellees.
Before TACHA, McWILLIAMS, and BALDOCK, Circuit Judges.
BALDOCK, Circuit Judge.
This appeal arises from a hybrid breach of contract/unfair representation class action brought by 641 union members ("Plaintiffs") against their employer, John Morrell & Company ("Morrell"), the United Food and Commercial Workers International Union ("the Union"), and the Local Union 340, United Food and Commercial Workers ("the Local"), under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. Plaintiffs alleged that Morrell breached several provisions of the 1979 collective bargaining agreement ("1979 Master Agreement") and that the Union and the Local breached their duty of fair representation in their response to Morrell's breaches. Morrell settled with Plaintiffs prior to trial and the Local was dismissed during the course of trial. The issue of the Uniоn's liability was tried to a jury, and the jury returned a verdict in favor of Plaintiffs, finding that the Union breached its duty of fair representation. By agreement of the parties, the issue of damages was submitted to the court. After nearly two and one-half years, the court, based on the parties' briefs, entered final judgment against the Union, finding it liable to Plaintiffs in the amount of $4,730,869. Plaintiffs and the Union raise various issues on appeal, and we have jurisdiction pursuant to 28 U.S.C. § 1291.
I.
Plaintiffs are a class of former employees at an Arkansas City, Kansas meat packing plant operated by Morrell, that produced "Rodeo" brand meats ("the Rodeo Plant"). During their course of employment at the Rodeo Plant, Plaintiffs were members of the Union and the Local. As was common in the industry, the Union and Morrell negotiated a "Master Agreement" in 1979, to control the rights and obligations of employees at all Morrell facilities, including the Rodeo Plant. The 1979 Master Agreement was in effect until September 1, 1982 and from year to year thereafter unless proper notice was given.
Three provisiоns of the 1979 Master Agreement are at issue here. Section 10 of the 1979 Master Agreement prohibited Morrell from decreasing the work force for the purpose of avoiding any of the provisions of the 1979 Master Agreement. Section 100 placed restrictions on Morrell following the closing of a plant. Under Section 100, Morrell was prohibited from contracting with other plants located within one hundred miles of a closed plant to provide services formerly provided by a closed plant. This restriction would remain in effect during a five-year period following a plant closing. Section 101 provided the conditions under which a new company plant would be brought under the provisions of a Master Agreement in effect at the time of the plant opening. Section 101 only applied to plants opened in the "greater Midwest" and the "far West" regions of the country.
In May 1981, Morrell began issuing notices of closing to certain of its meat packing plants covered by the 1979 Master Agreement. Morrell represented these closings tо be permanent. In December 1981, the Rodeo Plant became the fifth Morrell plant to receive a closing notice, with the effective date of closure scheduled for June 1982. By Spring 1982, Morrell had either closed or issued closing notices to seven of its ten plants.
In May 1982, as expiration of the initial term of the 1979 Master Agreement approached, the Union and Morrell met to begin new Master Agreement negotiations. In an effort to avoid the closure of several plants, the Union offered Morrell a concessionary package. Under the package, the Union offered, among other concessions, a three year wage freeze and suspension of all cost-of-living payments for the life of a new agreement. Morrell, however, rejected the Union's offer, and instead proposed changes in the Master Agreement whereby individual plants would be subject to separate wage and benefits packages. For the Rodeo Plant, Morrell proposed a forty percent cut in wages as well as cuts in benefits. The Rodeo Plant employees followed the Union's strong recommendations against the offer and voted to reject it.
As the time for the Rodeo Plant closing drew near, the Union, suspecting that Morrell might attempt direct negotiations with the Rodeo Plant Local, ordered the Local executive officer not to discuss any provisions of the Master Agreement with Morrell. Instead, the Union met again with Morrell officials in June 1982. However, nothing was achieved at that meeting and the Rodeo Plant was closed as scheduled on June 19, 1982. Pursuant to the 1979 Master Agreement, Plaintiffs received severance benefits upon closure of the plant.
In July 1982, negotiations between Morrell and the Union resumed. In August, Morrell offered what it termed a "final offer of settlement" which included the elimination of Sections 100 and 101 of the Master Agreement. The Union rejected the offer and Union representatives voted to authorize a strike at Morrell's Sioux Falls plant. Intervening negotiations failed, and, on September 1, 1982, the Sioux Falls workers went out on strike. Two days later, the Union distributed a handbill to the Sioux Falls workers that stated, "[o]n August 31st it became clear to us that Morrell wants [Sections] 100 and 101 eliminated because they intend to start operations at some or all of the closed plants." Appellant App. at 283.
Negotiations reconvened on September 7, 1982. On September 10, 1982, the parties signed a new Master Agreement, ending the Sioux Falls strike. In reaching agreement with Morrell, the Union entered into two secret side letter agreements. These side letter agreements, entered into on September 9, 1982 and September 10, 1982, affected the interpretation of Section 101 in the new Master Agreement. The September 9, 1982 letter provided that the plant located in Arkansas City, Kansas (the Rodeo Plant) "shall be included in the Southeast." Appellant App. at 295. The September 10, 1982 side letter specifically provided that "nothing in the Master Agreement executed today precludes [Morrell] from reopening previously closed plants located at ... Arkansas City, Kansas ... and thаt if such plants are reopened, no provision of said Master Agreement requires that such plants be subject to said Master Agreement." Appellant App. at 296. As a result of these two side letters, Morrell was allowed to reopen the Rodeo Plant as a nonunion plant without having to pay Master Agreement wages.
The Union failed to notify Plaintiffs of the existence or the content of the two side letter agreements. After hearing about the contents of the new Master Agreement from a Sioux Falls worker, the Rodeo Plant steward, a class member, contacted Union official John Mancuso. The steward asked Mancuso whether the Union agreed to let Morrell open the Rodeo Plant back up again. Mancuso's notes from the conversation state, "[t]his guy (the Rodeo Plant steward) kept asking if we (the Union) agreed with the company to let them reopen and I kept telling him we didn't." Appellant App. at 317.
In March 1983, Morrell reopened the Rodeo Plant facility as the Ark City Packing Company ("ACPC"). The Union notified Plaintiffs that "if it is estаblished that [Morrell] violated the [Master Agreement], ... we will pursue through the National Labor Relations Board [ ("NLRB") ], any and all damages as a result of such violations." Appellant App. at 334. On March 29, 1983, the Union filed an unfair labor practice charge with the NLRB. The Union charged Morrell with failing to recognize the Union, failing to recall Union employees, and unilaterally changing the terms and conditions of employment upon reopening of the plant. However, in exchange for Morrell's agreeing to let the Union represent the workers of the reopened ACPC plant (formerly Rodeo Plant), the Union withdrew the unfair labor practice charge. The NLRB approved withdrawal of the charge in September 1983, and Plaintiffs instituted the present action in the same month.
After an eight-week trial on the issue of liability, the jury found that Morrell breached Section 10 and Section 100 of the 1979 Master Agreement.1 The jury also found that the Union acted arbitrarily, discriminatively, or in bad faith by failing to protect Plaintiffs' rights with respect to Morrell's breaches. Furthermore, the jury concluded that Plaintiffs' claims against the Union were timely filed, and, with regard to Morrell's breach of Section 10 of the 1979 Master Agreement, the jury concluded that Plaintiffs were excused from exhausting their remedies. The Union filed a motion for judgement notwithstanding the verdict ("JNOV"), or in the alternative, for a new trial. The court denied the motions.
The issue of damages was determined by the court. Following extensive briefing by the parties, the court determined that damages were to be assessed based on apportionment rather than joint and several liability.
On appeal, Plaintiffs claim the district court erred in its calculation of damages. The Union cross appeals, claiming the court erred in denying its post-trial motions, and raising evidentiary issues relating to the court's damage award.
II.
The Union appeals the district court's dеnial of its motion for JNOV, or in the alternative, for a new trial. The Union argues that the court erred in denying its post-trial motions with respect to Plaintiffs' claim that the Union breached its duty of fair representation regarding Morrell's breach of Section 10 of the 1979 Master Agreement. Specifically, the Union claims that: (1) the Union's conduct did not amount to a breach of duty, (2) Plaintiffs' failure to exhaust their contractual remedies was not excused, and (3) Plaintiffs' Section 10-related breach of duty claim against the Union was barred by the applicable statute of limitations.
In reviewing the denial of a motion for JNOV, we apply the same standard employed by the district court. Rajala v. Allied Corp.,
A.
We first address Plaintiffs' contention that the Union has waived its arguments on appeal because it failed to seek a directed verdict on the same grounds. Only those questions which have been raised in a prior motion for directed verdict may be pursued in a motion for JNOV. Whalen v. Unit Rig, Inc.,
In its motion for directed verdict, the Union argued that there was insufficient evidence to sustain a jury finding that the Union breached its duty of fair representation by entering into the 1982 side letters, or by withdrawing its unfair labor practice charge. In its motion for JNOV, the Union raised the same argument it raises here--i.e., that therе was insufficient evidence to uphold the jury's verdict regarding a Section 10-related breach by the Union. Although Plaintiffs argue that the issues raised by the Union in its JNOV motion and on appeal are distinct from those issues raised by the Union in its motion for directed verdict, we hold that they are inextricably intertwined. Indeed, under Plaintiffs' theory of the case, the Union's Section 10-related breach of duty arose from the Union's entry into the two side letters and the Union's withdrawal of its unfair labor practice charge. Further, we are persuaded that the Union's motion for directed verdict put the court on sufficient notice that the Union was challenging Plaintiffs' Section 10-related breach of duty claim. In fact, upon the Union's motion for JNOV, the court below addressed the Union's challenges to Plaintiffs' Section 10-related breach of duty claim. Had the court deemed the Union's claims to be new issues not previously raised on directed verdict, the learned trial judge would not have addressed them.
B.
The Union claims that there was insufficient evidence from which the jury could have concluded that the Union breached its duty of fair representation with respect to Morrell's breach of Section 10 of the 1979 Master Agreement. A union breaches its duty of fair representation if its conduct toward a member is "arbitrary, discriminatory, or in bad faith." Vaca v. Sipes,
Viewed in the light most fаvorable to Plaintiffs, the evidence shows that, in August 1982, the Union knew of Morrell's plan to reopen the Rodeo Plant as a nonunion plant. Morrell's plan constituted a breach of Section 10 of the 1979 Master Agreement, yet the Union took no steps to remedy the breach. Instead, the Union entered into the two side letters with Morrell releasing all rights and claims Plaintiffs would have had against Morrell when the plant reopened. The Union then deceived Plaintiffs by concealing the side letters. As a result, Plaintiffs did not know that their rights had been sacrificed. Lastly, in an effort to conceal its acquiescence in Morrell's breach of Section 10, the Union filed an unfair labor practice charge against Morrell. However, after the NLRB decided to issue a complaint, the Union withdrew the charge and kept the withdrawal secret.
The Union's actions in sacrificing Plaintiffs' rights to recourse against Morrell for Morrell's breach of Section 10, and the Union's efforts to conceal its actions from Plaintiffs, support the jury's verdict against the Union. First, unlike O'Neill, this is not a case where union members are suing their union for its failure to strike a better deal through collective bargaining. See O'Neill, 499 U.S. at ----,
Moreover, if, as the Union argues, O'Neill counsels that the Union be accorded due deference in its decision to sacrifice Plaintiffs' rights, such deference would only be appropriate insofar as the Union's motive had been proper--i.e., to gain advantage with Morrell in bargaining over other Morrell plants. See 499 U.S. at ----,
C.
The Union claims that there was insufficient evidence whereby the jury could have concluded that Plaintiffs were excused from exhausting their contractual remedies. The Union claims that because there was no evidence that the Local breached its duty of fair representation, Plaintiffs were not excused from pursuing a grievance through the Local.
An employee can bring suit under § 301 of the LMRA only if he or she has exhausted the contractual remedies provided in the collective bargaining agreements. Hines v. Anchor Motor Freight, Inc.,
Under the 1979 Master Agreement, an individual employee could initiate the grievance procedure, but the later stages of the grievance process required union participation. Although the local unions generally had primary responsibility for enforcing the 1979 Master Agreement, the evidence supports a finding that in the case of Morrell's Section 10 breach, the Union, not the Local, assumed control over the matter. Upon the reopening of ACPC, the Union reassured Plaintiffs that if Morrell had violated the 1979 Master Agreеment, the Union, not the Local, would seek to remedy the violation. Therefore, in determining whether Plaintiffs are required to exhaust, the relevant inquiry is whether the Union, not the Local, breached its duty of fair representation. As set out supra part II.B, Plaintiffs successfully proved that the Union breached its duty of fair representation by refusing to protect Plaintiffs' interests in the face of Morrell's Section 10 breach. Plaintiffs were therefore not required to exhaust; accordingly, the jury's finding that Plaintiffs' failure to exhaust was excused is reasonable.
D.
The Union claims that the jury lacked sufficient evidence to conclude that Plaintiffs' Section 10-related breach of duty claim against the Union was not barred by the applicable statute of limitations. The Union argues that certain members of the Plaintiff class were aware of the Union's acts constituting the Union's breach of duty in September 1982, and Plaintiffs' action is therefore barred because it was not commenced within six months.
Hybrid suits under § 301 of the LMRA are subject to the six-month statute of limitations prescribed by 29 U.S.C. § 160(b). Delcostello,
The Union's Section 10-related breach of duty of fair representation arose from two activities on the part of the Union: (1) the Union's withdrawal of its unfair labor practice charge, and (2) the Union's entry into the September 9 and 10, 1982 side letters. See supra part II.A. There is no question that Plaintiffs instituted this action well within six months of learning of the Union's decision to withdraw its unfair labor practice charge. The earliest possible date that Plaintiffs knew or should have known of the Union's request to withdraw the charge was June 1983 when the Union announced its plan to request withdrawal to the ACPC employees, and Plaintiffs filed this action in September 1983. The only issue, then, is whether Plaintiffs knew or should have known of the Union's entry into the side letters more than six months prior to commencing suit.
Viewing the evidence in the light most favorable to Plaintiffs, see Rajala,
In sum, we conclude that the district court did not err in denying the Union's motion for JNOV. We further conclude that the court did not abuse its discretion in denying the Union's alternative motion for new trial.
III.
The Union and Plaintiffs present issues on appeal relating to the damages phase of the trial below. The Union claims that the district court erred by refusing the Union's request to present evidence demonstrating: (1) that Morrell would have decreased the Rodeo Plant work force even if no breaches had occurred, and (2) that Plaintiffs failed to mitigate damages. Plaintiffs claim the district court committed errors relating to the calculation of damages. Specifically, Plaintiffs claim that the court erred by: (1) failing to impose joint and several liability, (2) arbitrarily apportioning damages on a proportionate fault basis, and (3) limiting the period of damages to fifteen months.
A.
The damages issue was submitted to the court, and the court entered judgment on the briefs. The Union sought to introduce evidence that, even in the absence of any breaches by Morrell or the Union, Morrell would have eventually reduced the Rodeo Plant work force. The Union sought to use such evidence to establish that not all members of Plaintiff class--i.e., no more than three hundred Rodeo employees--are entitled to back pay and benefits for the entire damages period. Initially, the court ruled that the Union would be permitted to introduce such evidence; however, the court later reversed itself finding that the issue of whether Morrell would have reduced the Rodeo Plant work force for economic reasons had already been presented to and rejected by the jury. We review the district court's exclusion of evidence for an abuse of discretion. Thweatt v. Ontko,
The purpose of a back pay award is to make the employee whole--i.e., rеstore the economic status quo that would have obtained but for the wrongdoing on the part of the employer and the union. See Bowen v. United States Postal Serv.,
After a careful review of the record, we hold that the district court abused its discretion in refusing to allow the Union to present evidence that Morrell would have decreased the Rodeo work force even in the absence of the breaches by Morrell and the Union. The only arguably related evidence presented by the Union at the liability phase of the trial was generalized information regarding the state of the meat packing industry in the late 1970's and early 1980's. The Union introduced this evidence solely to try to establish that it was reasonable for the Union to believe that Morrell's closing of the Rodeo Plant was permanent. The Union introduced no evidence at all that Morrell would have, absent any breaches, eventually discharged or laid off employees, or phased out jobs at the Rodeo Plant. Therefore, the district court erred in its determination that the issue had already been litigated and decided by the jury. Because the court's error deprived the Union of an opportunity to present any evidence on an issue it was entitled to raise and on which it had the burden of proof, the court has abused its discretion. See Monroe Div., Litton Business Sys., Inc. v. De Bari,
B.
The Union contends that the district court erred by not allowing it to interview each class member concerning his or her individual mitigation efforts. We review for abuse of discretion. See Thweatt,
Employees claiming entitlement to back pay and benefits are required to make reasonable efforts to mitigate damages. EEOC v. Sandia Corp.,
In order to satisfy its burden, the Union was required to satisfy both prongs of the above two-part test. The Union failed its burden of establishing the first prong--i.e., that suitable positions were available for any of the Plaintiffs. Because it failed this prong of its burden, the Union has failed its burden of proof and evidence that supports the second prong of the test-- i.e., the individual mitigation efforts of Plaintiffs--are simply irrelevant. We therefore hold that the district court did not abuse its discretion in refusing the Union's request to interview class members regarding their individual mitigation effort.
C.
Plaintiffs claim that the court erred by apportioning damages between the Union and Morrell, instead of imposing joint and several liability. Plaintiffs argue that the Union caused or participated in Morrell's breaches of the 1979 Master Agreement, justifying imposition of joint and several liability. We review the court's legal conclusions de novo, and the court's factual determination of the amount of damages under the clearly erroneous standard. Chaparral Resources, Inc. v. Monsanto Co.,
In hybrid § 301 cases, "[t]he governing principle [ ] is to apportion liability between the employer and the union according to the damage cause by the fault of each." Vaca v. Sipes,
The district court found that, no later than December 1981, Morrell had formulated a secret scheme to close the plant, purportedly permanently, and reopen it nonunion at a later time. Once implemented, this scheme violated the 1979 Master Agreement. Morrell was the sole initiator of this plan, and there was no evidence that the Union played a role in or had knowledge of Morrell's plan until August 1982, or, at the latest, September 1982. Upon learning of Morrell's scheme, the Union breached its duty to Plaintiffs by failing to remedy Morrell's breach of the 1979 Master Agreement, and by acquiescing in Morrell's plan as evidenced by the Union's entry into the September side letter agreements.
Given these findings, the Union did not cause or participate in Morrell's contract breach. Morrell's breach--i.e., the sham closing of the Rodeo Plant--was accomplished in June 1982. The Union did not learn of the breach until after the sham closing, and any wrongdoing on its part constituted a post facto failure to remedy Morrell's breach, not an inducement to or participation in that breach. The Union's conduct is similar to that of a union that fails to process a meritorious grievance in the typical hybrid § 301 suit. Because this is not the extraordinary case where the union caused the employer's breach or where the union and the employer participated in each other's breach, the court correctly determined that joint and several liability was inappropriate, and the general rule of apportionment applies.
D.
Plaintiffs also contend that the district court arbitrarily apportioned damages between the Union and Morrell. Plaintiffs claim is two-fold: (1) that the court erred in apportioning damages based on proportionate fault, and (2) that the court's assignment of fault was arbitrary.
1.
Under Vaca, liability for damages in hybrid § 301 claims must be apportioned between the employer and the union "according to the damage caused by the fault of each."
We do not agree that Bowen requires that damages be apportioned based on chronology using the hypothetical arbitration date. First, the Bowen Court narrowly framed the issue as "whether a union may be held primarily liable for that part of a wrongfully discharged employee's damages caused by his union's breach of its duty of fair representation." Id. at 214,
The lower court's method of apportionment, or any particular method of apportiоnment, was not, however, before the Bowen Court for review. The lower court had instructed the jury that the issue of how to apportion damages between an employer and a union was left to its discretion. Id. at 215,
Having determined that Bowen does not require the application of a chronological method of apportionment based on a hypothetical arbitration date, we must now determine whether the district court's application of a proportionate fault formula was prоper. As a starting point, we recognize that suits under § 301 of the LMRA are governed by federal common law. Textile Workers v. Lincoln Mills,
Under Vaca and Bowen, the apportionment of damages between an employer and a union, in a hybrid § 301 case, must servе the following purposes: (1) damages must be apportioned according to each party's fault, Vaca,
We hold that the district court's apportionment of damages between Morrell and the Union based on proportionate fault in this hybrid § 301 case was proper. Apportioning damages based on proportionate fault, by definition, necessarily serves Vaca 's overriding purpose of apportioning "according to the damage caused by the fault of each." Id. at 197,
In sum, we are not saying that the proportionate fault method of apportioning damages is always superior to the hypothetical arbitration date method in a hybrid § 301 case. Rather, we hold that the hypothetical arbitration date method is not required in every hybrid case, and we hold that under the circumstances of this "sham closing" breach of contract/breach of fiduciary duty case, apportionment of damages based on proportionate fault was proper.
2.
Plaintiffs also contend that the district court's allocation of responsibility for seventy-five percent of the damages against Morrell and twenty-five percent against the Union was arbitrary. We review for clear error. Chaparral Resources, Inc.,
In apportioning damages, the court expressly found that "the evidence at trial [ ] indicated that Morrell was the initial and primary wrongdoer." Appellant App. at 166. Based on that finding, the court dеtermined that it would be appropriate to apportion over half of the damages to Morrell. Moreover, in the court's view of all of the evidence, the seventy-five/twenty-five apportionment was most consistent with the hypothetical time frame of an arbitration decision and the duration provision of the 1979 Master Agreement. Plaintiffs have presented no evidence that these findings were clearly erroneous, we therefore uphold the district court's decision to apportion seventy-five percent of the damages to Morrell and twenty-five percent to the Union.
E.
Finally, we address Plaintiffs' claim that the district court erred by limiting the period of damages to fifteen months. The district court held that damages were to be awarded from the date of the closing of the Rodeo Plant until September 1, 1983. Plaintiffs claim that to be made whole, the period of damages must run until February 17, 1987--the date that the settlement between Plaintiffs and Morrell was approved by the court.3 Although we review the court's factual determinatiоn of the amount of damages under the clearly erroneous standard, "[w]e are not so constrained ... when the trial court's computation of damages is predicated on a misconception of the governing rule of law." Chaparral Resources, Inc.,
In determining the time period for damages, the district court stated that damages in this case must have a basis in the 1979 Master Agreement. The court found that the 1979 Master Agreement did not terminate on September 1, 1982--the specified contract termination date--because Morrell's notice to the Union of its intent to terminate was invalid. The notice was invalid, the court found, because the notice was integral to Morrell's deceitful and fraudulent plan to close and reopen the Rodeo Plant. The court further found that, by the terms of the 1979 Master Agreement, if proper notice was not received by the Union, the contract continued to run from year to year until proper notice was given. Under this provision, the court awarded damages until September 1, 1983.
In Bowen, the Supreme Court recognized that principles of ordinary contract law do not necessarily govern the apportionment of damages in hybrid § 301 cases.
Federal courts, in furtherance of our national labor policy, have taken an expansive approach, where appropriate, to damages and remedies for breach of a collective bargaining agreement. See e.g., District 17 v. Allied Corp.,
In Richardson, an employee brought a hybrid § 301 suit against his employer and union.
The employment relationships which arise under it do not exist separate from it in a vacuum totally void of other relevant circumstances. The expiration date of a bargaining contract does not place the employee in jeopardy of losing his job at the termination of the agreement. In fact one of the very incentives to union representation is job security. The employee, the union which represents him, the company which employs him, eаch contemplate a 'subsisting' contractual relationship for an indefinite period of time. (citations omitted) This is particularly true in established industries where continual dealings with a recognized union foster renewals and renegotiations.
Id. at 978-79. Finding a strong likelihood of the employee's future employment, and the probability of the renewal of the collective bargaining agreement, the court concluded that it was error for the district court to have limited damages by the expiration date of the agreement. Id. at 979-80.
Given the above principles, we believe the court erred when it limited Plaintiffs' damages to fifteen months. First, in determining when Plaintiffs right to back pay and benefits terminated, we feel the court placed undue emphasis on the expiration date of the 1979 Master Agreement. Although the court alluded that it had discretion concerning the time period for damages, the court went to great lengths to tie the ending date of damages to the 1979 Master Agreement. We believe the court proceeded in this fashion because it was under the mistaken belief that general contract principles must govern the determination of the damages period. Because the court's computation of damages is predicated on a misconception of the governing rule of law, we will therefore not constrain ourselves to reviewing for clear error. See Chaparral,
Applying a more stringent review, we determine that the district court's limitation of damages to fifteen months does not serve to make Plaintiffs whole. Absent Morrell's sham closing and the Union's breach of duty, Plaintiffs were not in jeopardy of losing their jobs simply because the 1979 Master Agreement was terminated. Rather, Morrell and the Union have had a long-standing relationship, and over the years they have continued to negotiate Master Agreements. Like the parties in Richardson, Plaintiffs, Morrell, and the Union each contemplated a continued contractual relationship between the expiration of one Master Agreement and the negotiation of the next. Also, as in Richardson, the likelihood of Plaintiffs' future employment with Morrell beyond the expiration of the 1979 Master Agreement was strong. As the jury found, Morrell would have not have closed the profitable Rodeo Plant absent bad motive, and furthermore, Morrell reopened the plant as ACPC within the year. Finally, we have persuasive evidence that a collective bargaining agreement between Morrell and the Union beyond the 1979 Master Agreement was likely, for here Morrell and the Union entered into a new Master Agreement in 1982. All of these factors tend to show that, absent Morrell's sham closing and the Union's breach, Plaintiffs would have enjoyed continued employment at the Rodeo Plant beyond the expiration of the 1979 Master Agreement, and therefore, limiting Plaintiffs' damages to September 1983 (the district court's factual determination of the date of the 1979 Master Agreement's expiration) will not make them whole.
Instead, we hold that in this hybrid § 301 case, damages must be awarded to Plaintiffs from the date of the Rodeo Plant closing until February 17, 1987--the date that the settlemеnt between Plaintiffs and Morrell was approved by the court. Back pay liability normally runs until the employer makes a valid, unconditional reinstatement offer. NLRB v. Louton, Inc.,
IV. CONCLUSION
The district court's denial of the Union's motion for JNOV, or in the alternative, for new trial is AFFIRMED. The district court's judgment as to damages is REVERSED, and this case is REMANDED for further proceedings consistent with this opinion.
Notes
A hybrid action under § 301 of the LMRA involves two claims: (1) that the employer breached the collective bargaining agreement, and (2) that the union breached its duty of fair representation. Delcostello v. International Bhd. of Teamsters,
However, Plaintiffs' previous settlement with Morrell ultimately diminished their back pay award
Plaintiffs also contend that Section 100 of the 1979 Master Agreement contemplated damages for a five year term. We agree with the district court's determination that damages under this provision are subsumed in the damages to be awarded for Morrell's and the Union's Section 10-related breach. Therefore, the Section 100 provision cited by Plaintiffs does not extend the damages period
We find the Union's reliance on International Bhd. of Elec. Workers v. A-1 Elec. Serv.,
Of course, the determination of Plaintiffs' damages is subject to our holding supra part III.A, that the Union must be given an opportunity to present evidence that not all members of Plaintiff class would have retained their jobs even in the absence of breaches by Morrell and the Union