Donald H. GRIESMANN; Richard H. Henderson; Jesse L. Harrison; Leslie R. Barndt; Norman W. Fuls; Charles D. Quinton; John L. Lippincott Sr.; David J. Harhart; Robert S. Nelson; Michael G. Gurinko; Ernest J. Manieri; Gerald J. McKelbey; Barry R. Kutzler; Waldemar W. Widemann; Roger W. Kutzler; Richard W. Leh; John M. Quigley; Melvin G. Heiserman; Durrell M. Boger; John J. Lippincott Jr. v. CHEMICAL LEAMAN TANK LINES, INC., Nazareth Terminal, Teamsters Local 773. Appeal of Donald H. GRIESMANN, et al. Appeal of CHEMICAL LEAMAN TANK LINES, INC.
Nos. 84-1747, 84-1748
United States Court of Appeals, Third Circuit
Argued Sept. 9, 1985. Decided Oct. 29, 1985.
776 F.2d 66 | 120 L.R.R.M. (BNA) 3041 | 103 Lab.Cas. P 11,688
Robert J. Bray (argued), Louis A. Minella, Thomas M. Tammany, Robert J. Bray & Associates, Philadelphia, Pa., for Chemical Leaman Tank Lines, Inc.
Stephen C. Richman (argued), Markowitz & Richman, Philadelphia, Pa., for Local 773, etc.
Before HUNTER, GARTH and HIGGINBOTHAM, Circuit Judges.
OPINION OF THE COURT
JAMES HUNTER, III, Circuit Judge:
This case arises from a suit brought under
I.
Chemical Leaman is a trucking concern that hauls liquid and dry products as a common and contract carrier. Prior to December 31, 1975, Chemical Leaman operated a liquid and two cement products terminals in Northeastern Pennsylvania. Chemical Leaman‘s two cement terminals were located in Stockertown and Nazareth; its liquid terminal was located across the street from the Nazareth cement terminal. Although Teamsters Local 773 represents all of the cement and liquid drivers in collective bargaining, they are organized into two bargaining units. During the relevant period, the cement drivers at Stockertown and Nazareth were covered by a succession of multi-employer, multi-union collective bargaining agreements, known as the “Eastern Area Cement Haul Agreement” or “Cement CBA.” A separate succession of multi-employer, multi-union agreements, known as the “Eastern Area Tank Haul Agreement,” or “Liquid CBA,” covered the Nazareth liquid drivers. The collective bargaining agreements covering the two bargaining units are nearly identical.
As a result of the dwindling cement hauling market, Chemical Leaman closed its Nazareth cement terminal on December 31, 1975, and moved the cement drivers to the Nazareth liquid terminal. Because the drivers belonged to different bargaining units, the cement and liquid drivers retained their separate identity and assigned work at the terminal according to separate seniority lists.1 Chemical Leaman desired the eventual combination of the two seniority lists to reduce both the administrative burden and the threat of strikes presented by the two list system.
Although its cement work continued to decline, by early 1977 Chemical Leaman‘s liquid hauling business increased to the point where it required additional liquid drivers at Nazareth. Believing this increase presented the opportunity to consolidate the two seniority lists, Chemical Leaman representative Raymond Snyder met with one of the Union‘s business agents, Edward Tonkay, to draft a proposal allowing the Nazareth cement drivers to transfer to the bottom of the liquid seniority list before the company hired additional liquid drivers. An April 27, 1977 letter from Mr. Snyder to Mr. Tonkay outlines the proposal, and provides, in relevant part:
1. As agreed, we will post a bid allowing cement drivers to move on a permanent transfer to the bottom of the Nazareth Liquid seniority list.
2. Their position on the liquid list shall be in keeping with their company seniority, however, Tank seniority shall prevail for all purposes and no “dovetailing” shall take place.
3. Daily dispatch shall be by Tank seniority and men bidding from cement to liquid shall be dispatched from the bottom of the liquid list.
There will be no claim to cement work beyond what is commonly recognized as “on-call” status. Men remaining on the cement list will be dispatched, as in the past, in keeping with the cement contract.
Mr. Snyder then dictated a notice addressed to the Nazareth cement drivers that was subsequently posted in the Nazareth terminal on May 20, 1977. The May 20 notice stated:
As agreed between Local Union # 773 and Chemical Leaman Tank Lines, Inc., the Company is posting this notice before hiring additional liquid drivers to allow present cement drivers the opportunity to transfer on a permanent basis to the bottom of the liquid list. The terms of this transfer will be governed by the Company‘s letter of April 27, 1977. In the future, no additional men will be added to the cement list. Anybody interested in this permanent transfer shall contact Bob Ranck or Don Sawyer before 8 AM, May 31.
This notice shall come down at 8 AM, May 31, 1977.
Snyder sent copies of the April 27 letter and May 20 notice to the Union and the shop stewards. A number of less senior cement drivers accepted the cement-liquid transfer opportunity. Chemical Leaman subsequently hired new tank drivers, adding them to the liquid list under the transferred drivers. At the time, Chemical Leaman hoped to achieve its goal of a single list system through the attrition of the remaining Nazareth cement drivers.
In July 1982, however, Chemical Leaman closed its Stockertown cement terminal and transferred the Stockertown drivers and cement work to the Nazareth terminal, precipitating the instant dispute. Pursuant to Article 52 of the Cement CBA then in effect, the Stockertown cement drivers were “dovetailed”3 into the Nazareth cement seniority list. According to the Griesmann plaintiffs, who are all liquid list drivers, the dovetailing of the Stockertown drivers violated the company‘s promise in the May 20, 1977 notice that “no additional men will be added to the cement list,” and harmed plaintiffs by ensuring that there would be little, if any, cement overflow work for the liquid haulers.4
On August 25, 1982, eight of the original eighteen plaintiffs5 in this action filed grievances with the Joint Committee, a grievance panel composed of equal numbers of union and management members provided for in Article 7 of the Cement and Liquid CBAs.6 Both the April 27, 1977 letter from Snyder to Tonkay and the May 20, 1977 notice were submitted to the Joint Committee for consideration in the grievance procedure. Neither the Union nor Chemical Leaman argued that the documents evidenced a contract “not to add” drivers to the cement seniority list, however. On January 25, 1983, the committee denied the grievance petitions.
Plaintiff-appellees filed this suit, alleging that Chemical Leaman breached its CBA with the Union and that the Union breached its duty of fair representation by failing to advocate plaintiffs’ contractual rights under the May 20, 1977 notice. The parties agreed to bifurcate the trial into liability and damages phases to permit an interlocutory appeal after the liability phase; trial on the liability issue commenced in late January, 1984. Prior to jury trial, the district court granted plaintiffs’ motion for partial summary judgment, concluding that the 1977 notice reflected a contract characterized by the court as a collective bargaining agreement (“the 1977 Agreement“) between Chemical Leaman and Local 773. The court determined that the 1977 Agreement obliged Chemical Leaman to refrain from any future additions to the cement seniority list, and that Chemical Leaman breached the 1977 Agreement as a matter of law when it dovetailed the Stockertown drivers. The judge refused to instruct the jury about the plaintiffs’ rights under the 1977 Agreement, but permitted plaintiffs to argue that the May 20, 1977 notice constituted a contract. The jury found that the Union did not breach its duty of fair representation, and the district court entered a judgment order on June 20, 1984, finding Chemical Leaman liable for breach of the 1977 Agreement. Upon application by the parties, the district court allowed an interlocutory appeal pursuant to
The district court found that the May 20, 1977 notice reflected a contract also evidenced by the April 27 letter and that that contract was a collective bargaining agreement. In so finding, the court reasoned that “[w]here the union has taken ‘a leading role in representing the employee[s] and in negotiating the ... agreement,’ it is likely that a collective bargaining agreement exists” quoting Davis v. Ohio Barge Line, Inc., 697 F.2d 549, 553 (3d Cir.1983). The lower court‘s reliance upon Davis is misplaced, however, because the cited language concerns only whether a labor contract within the meaning of Sec. 301 of the Labor Management Relations Act exists. Davis does not purport to distinguish between a labor contract and a collective bargaining agreement, but instead distinguishes labor contracts, i.e., contracts between an employer and a union, from contracts between employers and employees outside the ambit of Sec. 301.
A collective bargaining agreement is the paradigmatic labor contract, covering a wide array of contingencies that may arise in the employment relationship, and distinguished by provisions for the arbitration of disputes concerning the agreement‘s meaning and application. In United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960), Justice Douglas, speaking for the Court, described the collective bargaining agreement:
The collective bargaining agreement states the rights and duties of the parties. It is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.... The collective bargaining agreement covers the whole employment relationship. It calls into being a new common law--the common law of a particular industry or plant.... A collective bargaining agreement is an effort to erect a system of industrial self-government.... [T]he grievance machinery under a collective bargaining agreement is at the very heart of the system of self government. Arbitration is the means of solving the unforseeable by molding a system of private law for all the problems which may arise and to provide for their solution in a way which will generally accord with the variant needs and desires of the parties. The processing of disputes through the grievance machinery is actually a vehicle by which meaning and content are given to the collective bargaining agreement.
363 U.S. at 578-81. Thus defined, a collective bargaining agreement differs “in nature, scope, and purpose from the ordinary commercial contract.” Syufy Enterprises v. Northern California State Association of IATSE Locals, 631 F.2d 124 (9th Cir.1980) (per curiam), cert. denied, 451 U.S. 983 (1981). The April letter and May notice reflect, at most, a contract between Local 773 and Chemical Leaman. Although the district court erred in characterizing the 1977 Agreement as a collective bargaining agreement, we cannot say that it erred in finding the 1977 Agreement to be an enforceable labor contract.
Chemical Leaman argues that the 1977 Agreement is simply an informational notice, unilaterally drafted and posted by the company, and suggests that this case is similar to Local 1330, United Steel Workers v. United States Steel Corp., 631 F.2d 1264 (6th Cir.1980), where the court refused to enforce the employer‘s oral promises because the promises lacked some of the minimum features of a formal legal contract required by the steel workers’ collective bargaining agreement. Id. at 1269. Although Mr. Snyder dictated and posted the notice, the April 27, 1977 letter outlining the terms of the cement-liquid transfer opportunity indicates that the Union and Chemical Leaman agreed to the posting of a notice and fairly suggests that the terms of the notice, like the terms of the letter, were the subject of negotiations between the Union and Chemical Leaman. Appellant‘s contention that the notice could not be a legal contract under the Cement CBA also fails; we have been shown no provision of the 1977-1980 Cement CBA that invalidates the contract.8
We believe that the Union and Chemical Leaman must be permitted to introduce extrinsic evidence to support their contention that the contract only bars adding new hires to the cement list. The court‘s construction of the 1977 Agreement involved a lengthy inquiry into the circumstances surrounding the April 27 letter and May 20 notice, suggesting that contract is not integrated. Indeed, if not for the court‘s reliance upon the parties’ testimony concerning the Union‘s and Chemical Leaman‘s negotiations and the state of the trucking industry in northeastern Pennsylvania, the court would not have found a contract at all. Thus, even were we to conclude that the 1977 Agreement‘s terms are unambiguous, we would find that the trial court erred in refusing to admit the parties’ proffer of extrinsic evidence. We find, however, that the parties advanced “a reasonable alternative interpretation,” Mellon Bank, 619 F.2d at 1011 (emphasis in the original), of the term “add,” and therefore that the trial judge erred by refusing to admit parol evidence that might prove a different meaning for “add” than the one ascribed by the court. Because the April 17 letter and the May 20 notice do not integrate all the contractual terms, and because in the particular context in which it is used, the term “add” is ambiguous, we believe that the jury, as the finder of fact, should have considered extrinsic evidence regarding the parties’ alleged specialized use of the term “add” and that the jury should determine whether Chemical Leaman breached its obligation not to “add” drivers to the cement list. Accordingly, we vacate the district court‘s finding that Chemical Leaman breached the 1977 Agreement.
III.
It is well recognized that individual employees can bring suit against their employers in federal court for breach of a contract between an employer and a union. Davis, 697 F.2d at 552. Federal labor policy requires employees to exhaust any grievance procedure provided in the union‘s collective bargaining agreement when that agreement governs the manner in which the employee‘s rights may be enforced. Vaca v. Sipes, 386 U.S. 171, 184 (1967); see Republic Steel Corp. v. Maddox, 379 U.S. 650, 653 (1965). Because judicial review of arbitration proceedings is limited,10 see The Steelworkers Trilogy: United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 568 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960); United Steelworkers v. Enterprise Wheel & Car Co., 363 U.S. 593, 596 (1960), the employee usually will be bound to the result by the agreement‘s language making the arbitration award “final and binding” upon the employee. W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 765 (1983). Thus, to bring a successful suit, the employee must challenge the validity of the grievance procedure as well as allege a breach of the collective bargaining agreement by the employer. A successful Sec. 301 suit usually entails two independent but intertwined causes of action: one against the employer for breach of the collective bargaining agreement, the other against the union for breach of the duty of fair representation. See DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 163-64 (1983); Vaca, 386 U.S. at 185.
Thus, the district court must defer to the Joint Committee‘s decision unless (i) the committee‘s decision “fails to draw its essence from the collective bargaining agreement;” or (ii) the decision is tainted by fraud or misconduct; or (iii) the Union breached its duty of fair representation of the plaintiffs before the Joint Committee. See Enterprise Wheel, 363 U.S. at 597; Bieski v. Eastern Automotive Forwarding Co., 396 F.2d 32, 38 (3d Cir.1968).13
IV.
Plaintiffs raise no contention that the Joint Committee decision exceeded the authority granted by the Cement and Tank CBAs, nor do they allege fraud or misconduct in the proceedings.14 The jury found that the union did not breach its duty of fair representation. Ordinarily, we would defer to the jury‘s finding. Indeed, on the record, this case appears substantially similar to Humphrey v. Moore, 375 U.S. 335 (1964) where the Supreme Court held that the union, representing two groups of employees in a seniority dispute resulting from the merger of two transport lines, did not breach its duty simply because it advocated dovetailing the employees instead of favoring one group by arguing that the transferred employees had no right to employment. “Conflict between employees represented by the same union is a recurring fact,” the Court noted, adding that it was unwilling to weaken the collective bargaining and grievance process by preventing the union from taking a position in the seniority dispute “in good faith and without hostility or arbitrary discrimination.” Humphrey, 375 U.S. at 349-50.
Nevertheless, the existence of contractual rights and the duty of fair representation are intertwined; the Union‘s failure to suggest plaintiffs had contractual rights under the 1977 Agreement, in the face of the court‘s finding that 1977 Agreement gave the employees enforceable contractual rights, is evidence that generally should be considered by the finder of fact in a duty of fair representation case.16 By directing the district court to submit to the jury the interpretation and breach issues, the jury must decide, in light of that evidence, and all other evidence, including evidence of the grievance proceedings before the Joint Committee, whether the Union breached its duty of fair representation. By vacating the trial court‘s rulings construing the 1977 Agreement and finding Chemical Leaman‘s breach of that contract, we leave it to the jury to determine the true meaning of the agreement and whether either party breached its duty with respect to it.
V.
Our discussion contemplates that the meaning of the 1977 Agreement, Chemical Leaman‘s breach of the 1977 Agreement, and the Union‘s breach of its duty of fair representation will be decided by the jury on remand. In light of our holding that the Joint Committee properly exercised jurisdiction over the dispute, the court should instruct the jury that the Union may be held liable if its representation of the Griesmann plaintiffs “has been dishonest, in bad faith, or discriminatory.” Hines v. Anchor Motor Freight, 424 U.S. 554, 571 (1976), i.e., conduct that “seriously undermines the integrity of the arbitral process.” Id. at 567. Finally, our finding of Joint Committee jurisdiction compels the district court to reinstate its order dismissing those plaintiffs who failed to avail themselves of the grievance procedures.17
The district court‘s order will be vacated and the case will be remanded for disposition in accordance with this opinion.
Notes
Any panel of the Joint Committee hearing a case shall consist of a minimum of three (3) representatives of the Employers and three (3) representatives of the Union, but at all times shall consist of an equal number of designated representatives of the Employers and the Union.
It shall be the function of the Joint Committee or a panel thereof to settle disputes in accordance with Section 7.2 of this Article.... A decision by a majority of any panel of the Joint Committee shall be final and binding on the parties and employees involved.
- Whether an employer who has breached a collective bargaining agreement containing no grievance procedure and no dispute resolution mechanism, can defend an action brought under Section 301 of the Labor Management Relations Act, on either of the following grounds:
- that there is no breach of the duty of fair representation by the union; or,
- that a Joint Committee with no jurisdiction over the collective bargaining agreement ruled in the employer‘s favor on grievances filed by the union over the breach.
- In an employees’ duty of fair representation case against their union, where their theory is that the union arbitrarily subordinated their rights under one contract to the rights of other employees under a different conflicting contract, whether the Court erred when it kept the jury from the fact that the plaintiffs’ claims under the first contract were in fact legitimate and enforceable, and that the company had unlawfully violated their contract rights
Certification of the questions by the motions panel does not bar our review of the merits. Murphy v. Heppenstall Co., 635 F.2d 233, 235 n. 1 (3d Cir.1980), cert. denied, 454 U.S. 1142 (1982); IOP Chapter 10.F [Certification Under 28 U.S.C. Sec. 1292(b) ].
In Humphrey v. Moore, 375 U.S. 335 (1964), the Supreme Court faced a similar argument. There, employees arguing that the employer could not consolidate employees in two transport lines suggested that the collective bargaining agreement‘s grant of jurisdiction to the grievance committee over seniority disputes resulting from the absorption of transport lines did not vest the committee with jurisdiction over the initial question whether the employees could be absorbed at all. The Court found that the committee possessed jurisdiction, noting “the power of the [grievance committee] over seniority gave it power over jobs.” Humphrey, 375 U.S. at 347. In the instant case, we are persuaded that section 5.5 gives the Joint Committee jurisdiction over the question whether transferred employees should be added to the Nazareth cement list as well as the method in which they may be added.