Lead Opinion
In а prior appeal, this court held that plaintiffs could state a claim for relief under section 301(a) of the Labor-Management Relations Act of 1947 (the “LMRA”), 29 U.S.C. § 185(a) (1976), for an alleged breach of the duty of fair representation by plaintiffs’ union, District No. 9 of the Machinists’ International Union (the “Union”).
I. BACKGROUND
Although the opinion in Schultz I sets out much of the factual background of this case, see
Prior to certain 1971 collective bargaining sessions, both Owens and the Union interpreted a clause in their collective bargaining agreement establishing an Apprenticeship Training Program as requiring Owens to maintain a ratio of one apprentice for every eight journeymen machinists employed at Owens’ plant in Godfrey, Illinois. The pertinent provision of this clause, which was not changed from 1968 to 1978, reads:
The normal ratio of apprentices shall be one (1) apprentice to every eight (8) journeymen in the department. Apprentices shall serve for a period of 8,000 hours in accordance with the Federal Apprenticeship Standard Agreement. (Emphasis supplied.)2
Article 18 of the Federal Apprenticeship Standard Agreement covering the 1500 union shops encompassed within the Union’s geographical jurisdiction, which is incorporated by reference in the collective bargaining agreement betwеen the Union and Owens, provides in pertinent part that the
[rjatio of apprentices to journeymen shall be in conformity with present or subsequent bargaining agreements between the employer and District No. 9. If provision of an employer’s bargaining agreement does not specifically cover the subject of ratio of apprentices to journeymen, then the following shall apply.
One (1) apprentice may be employed for each eight (8) journeymen.
During 1971, Owens became concerned about the number of journeymen machinists employed at the Godfrey plant and the high cost of maintaining a large number of employees in that classification.
To address the consequent inflated labor cost, Owens proposed to the Union during contract negotiations in 1971 that the language of the contract be changed so that the contract could not be interpreted to require Owens to maintain one apprentice for every eight journeymen (and as permitting Owens to reduce the number of entering apprentices). Owens submitted at least four proposals to the Union with regard to the apprenticeship ratio but the Union rejected each proposal. The Union did not want to change the contract language because similar language was used in numer
Hemken approached Michael Harcourt, a representative of the Bureau of Apprenticeship and Training, United States Department of Labor, in November 1971, about the interpretation of this contract clause. Harcourt advised Hemken that the one-to-eight apprenticeship ratio clause contained in contracts bargained by the Union was discretionary and not mandatory; the ratio was to be applied by the employer, according to Harcourt, as adjusted to reflect its own needs for apprentices. Tr. at 783-87 (testimony of Mr. Harcourt). Hemken also contacted Fred Specman, Assistant Directing Business Representative for the Union’s District No. 9, who supervised the negotiation and administration of more than 1500 labor contracts. Specman testified that the District No. 9 apprenticeship committee had informed Hemken that, of the more than 750 contracts containing comparable language, none was construed to impose on employers a mandatory apprentice-to-journeyman ratio. Tr. at 773, 776-78 (testimony of Mr. Specman). Hemken in turn reported this prevailing non-mandatory interpretation to the full Union negotiating committee at Owens’ Godfrey plant. The committee then voted to accept this interpretation and to report its action to Owens. Tr. at 244 (testimony of Mr. Skelton). Based upon the understanding that the apprenticeship ratio was discretionary rather than mandatory, the Union negotiators and Owens agreed orally in November 1971 to leave the contract language unchanged.
A meeting of the Union membership at the Godfrey plant was held in December 1971 to ratify the proposed contract. Hemken testified at trial that he chaired this meeting and reported to the membership the interpretation of the existing apprenticeship clause agreed to by the Union negotiating committee and Owens. Tr. at 792. Several of the plaintiffs, on the other hand, testified that Hemken said nothing at the meeting about this new interpretation of the clause. However, each of the plaintiffs except one conceded on cross-examination that he could not recall whether the clause was ever discussed at the meeting. Tr. at 127 (testimony of Mr. Schultz), 164 (testimony of Mr. Baumann), 314 (testimony of Mr. Doran).
After the Union ratified the agreement reached in December 1971, Owens did not place any new apprentices in the apprenticeship program. At several of the monthly grievance meetings held in 1972, 1973 and 1974, the program, and the placing in it of new apprentices, were discussed. Both Owens’ management and Hemken consistently maintained that the apprenticeship program hаd not been abandoned but that, pursuant to the oral understanding of November 1971, Owens could place new apprentices in the program on an “as needed” basis — and no new apprentices were currently needed. Although many of the plaintiffs became eligible (by virtue of seniority) for placement in the apprenticeship program during this period, no employees filed a grievance with the Union protesting Owens’ failure to place them in the program.
The apprenticeship program was also an issue in 1974 during the next round of contract negotiations. The Union requested that the parties thoroughly review the existing apprenticeship program and asked that new apprentices be placed in the program. Although Owens agreed to discuss the program, its final and amended final offers to the Union retained the existing contract language. The Union rejected these final offers and called a strike. The main issues which apparently prompted the
Owens’ interpretation of the contract clause relating to the apprentice-to-journeyman ratio as non-mandatory and Owens’ failure to place new people in the apprenticeship program continued to be a cause of concern among some of the employees throughout 1974 and 1975. In April 1976, plaintiff John Schultz, an Owens employee, filed what was apparently the first formal grievance
As a result of the 1971 Negotiations, the Company continued essentially the same language in the Apprenticeship Article, however, with a new understanding that the Company was no longer obligated to maintain any particular ratio. The Company then decided to not add any new apprentices to the program, and allow apprentices already on the program to finish the program. The last apprentice to complete the program was Arlin Schaefer, and he completed his training on May 22, 1975.
We presently have 366 hourly employees in your Bargaining Unit. Of this total, 207 are master machinists, which represents 57% of our hourly workforce. The Company continues to have an oversupply of master machinists.
Plaintiffs’ App. at 31.
Hemken then requested a face-to-face meeting with Bailey on the grievance, as authorized by the third step of the contractual grievance procedure. After this meeting, Hemken accepted Owens’ response to the grievance and informed Schultz that he would not take the grievance to the last step of final and binding arbitration. In a letter to Schultz, Hemken explained his decision as follows:
Does the Company have an obligation to maintain apprentices at all times with a ratio of one (1) apprentice to every eight (8) Master Machinists?
The answer is; [sic] no, they do not have to maintain apprentices if there is no need for apprentices within the shop.
The purpose of the ratio language is to retain the ratio for proper training and to have an adequate number of qualified journeymen ... available to properly train and instruct the apprentices ....
Owens-Illinois or any other Company is not obligated to keep a work force for which there is no need for production or maintenance requirements.
Plaintiffs’ App. at 34-35; see tr. at 808 (testimony of Mr. Hemken). No other employees qualified for the apprenticeship program, other than Schultz, filed a grievance. But in August 1976, shortly after Schultz received Hemken’s letter accepting Owens’ response to Schultz’s grievance, this lawsuit was filed.
II. THRESHOLD ISSUES
The district court, after declaring a mistrial, granted defendants’ motions for directed verdicts. Thus, our standard of review is whether there was sufficient evi
On appeal, both defendants have presented arguments (relating to the failure by most plaintiffs to file grievances and the alleged untimely filing of the Schultz grievance) which, if accepted, would preclude a suit against each of them under section 301(a) of the LMRDA. The Union also asserts that plaintiffs’ suit is barred as to both defendants because the plaintiffs failed to exhaust intraunion remedies. Although these arguments are without merit, we need to address them in some detail here as they relate to our jurisdiction.
A. Failure to File Grievances and Failure to File Timely Grievances
The district court held that the plaintiffs other than Schultz could not maintain this suit against both Owens and the Union, under the principles announced in Republic Steel Corp. v. Maddox,
Justice Harlan wrote in Republic Steel that “[a]s a general rule . .., federal lаbor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure” before requesting judicial intervention.
In the case before us, once Schultz’s grievance was rejected, it would have been futile for the plaintiffs other than Schultz to have filed grievances.
On the question of the timeliness of Schultz’s grievance, the district court found that Schultz had failed to file his grievance within the three-day period specified by the collective bargaining agreement; the court thus concluded that this suit under section 301(a) was barred as to both defendants. Although the court declined to determine precisely when the claim underlying Schultz’s grievance accrued, the district court was sure that, since Schultz had first qualified for placement in the program more than two years before filing this grievance, the grievance must be untimely.
But even if failure to file a timely grievance would be an available defense in this section 301(a) case,
B. Failure to Exhaust Intraunion Remedies
The Union also asserts that plaintiffs’ action is barred because none of the plaintiffs' exhausted their intraunion remedies before filing this lawsuit.
In the case before us, we believe we should decline to exercise our discretion to require these plaintiffs to exhaust the remedies outlined in the constitution of the Machinists International Union. Even if plaintiffs exhaust these intraunion remedies, it is extremely doubtful whether the Union could, because of the three-day time limit for filing provided in the contract, reinstate or reactivate the grievances. Cf. Clayton,
III. BREACH OF THE DUTY OF FAIR REPRESENTATION
As another of the grounds for granting directed verdicts in favor of both defendants, the district court concluded that there was “no evidence to support Plaintiffs’ claim that the [Union] engaged in conduct towards its members which was in breach of the duty of fair representation.” Order of Sept. 16,1980, at 2. The breach of the duty of fair representation is, of course, the heart of plaintiffs’ claim against the Union. Moreover, plaintiffs’ claim against Owens fails unless the fair representation claim against the Union succeeds. A breach of the Union’s duty of fair representation is a prerequisite to employee suit under section 301(a) when, as here, the collective bargaining agreement vests exclusive authority to process grievances in the Union. See Vaca v. Sipes,
Duty of fair representation cases may take two forms. First, there are those cases predicated upon claims that the union breached its duty in negotiating a collective bargaining agreement. Second, there are cases alleging that the union breached its duty in administering the collective bargaining agreement (e.g., in processing a grievance). See Leffler, Piercing the Duty of Fair Representation: The Dichotomy Between Negotiations and Grievance Handling, 1979 U.Ill.L.F. 35. The Supreme Court has implicitly recognized this dichotomy by defining a different standard in each of these two different situations. There is one standard for appraising a union’s conduct when a claim arises out of union actions in negotiating agreements with an employer and a different standard when the claim arises from a union’s administration of the collective bargaining agreement, especially in the context of processing grievances.
Thus, in Ford Motor Co. v. Huffman,
On the other hand, when assessing a union’s conduct in processing a grievance, the Supreme Court, while also using a “good faith” standard, has not purported to grant the union “a wide range of reasonableness.” Thus, in Vaca v. Sipes,
We emphasize these differences between union conduct in representing diverse employees in collective bargaining and union conduct in representing employees having individual grievances, because plaintiffs’ claims here appear to involve activities of the Union both in ostensibly negotiating the non-mandatory interpretation of the apprentice ratio and in processing the grievance filed by Schultz. Thus, plaintiffs assert, inter alia, that the Union, by agreeing with Owens that the one-to-eight ratio need not be strictly adhered to, breached its duty of fair representation. But we do not believe that a jury could find that the Union here lacked “complete good faith and honesty of purpose in the exercise of its discretion,” Huffman,
Plaintiffs here presented no evidence to show that the Union’s decision to allow Owens flexibility in appointing employees to the apprenticeship program was motivated by anything even remotely akin to hostility, bad faith or arbitrariness. Cf. Baker v. Newspaper and Graphic Communications Union, Local 6,
Further, with respect to the second aspect of the fair representation claim, we
These actions with respect to the grievance do not constitute a breach of the duty of fair representation. There is nothing in the evidence to indicate bad faith, arbitrariness or discrimination on the part of the Union. To the contrary, the evidence unambiguously suggests that Schultz’s claim was considered by the Union, pressed before Owens and ultimately dropped after a careful assessment of its merits. A jury, in our view, is left with no other conclusion than that the Union did not breach its duty of fair representation in processing Schultz’s grievance. See Rupe v. Spector Freight Systems, Inc.,
IV. CONCLUSION
The district court also found that directed verdicts for the defendants were proper be•cause there was no evidence from which a jury could find either that Owens breached the collective bargaining agreement by not maintaining the one-to-eight ratio or that plaintiffs suffered damage due to the аlleged breach of contract. Although defendants have argued in support of the district court’s decision on these grounds, we need not consider those arguments here in the absence of substantial evidence of a breach of the duty of fair representation. The finding of such a breach is an essential element of plaintiffs’ section 301(a) suit against both the Union and Owens. Rupe v. Spector Freight Systems, Inc.,
The order of the district court directing verdicts in favor of the Union and Owens is affirmed.
Affirmed.
Notes
. In their complaint, plaintiffs claim that the Union breached “its statutory duty of fair representation owing to plaintiffs under ... 29 U.S.C. § 414 et seq.” Complaint 10. By way of clarification, we note that the duty of fair representation does not arise under 29 U.S.C. § 414 (1976), a provision concerning the rights of union members to receive copies of collective bargaining agreements, nor under any other provisions of the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”), which are codified near § 414. Rather, the union’s duty to fairly represent its members is implied from § 9(a) of the National Labor Relations Act of 1935, 29 U.S.C. § 159(a) (1976), see Humphrey v. Moore,
. In the collective bargaining agreement effective from 1978 to 1981, Owens and the Union modified the language in this clause to read: “The normal ratio of apprentices may be one (1) apprentice to every eight (8) journeymen in the department.” (New language emphasized.) The new language is similar to the language used in the Federal Apprenticeship Standard Agreement. See text infra.
. Apprentice machinists receive a sliding-scale percentage of the wage rate paid to journeymen, which depends upon an apprentice’s total hours of employment experience; for example, a new apprenticе with less than 1000 total hours experience is paid 58% of the journeymen’s rate.
. There was testimony at trial indicating that other grievances on the apprenticeship issue may have been filed but that records concerning such alleged grievances had apparently been lost or misplaced. We need not resolve any dispute on this point here because the filing of Schultz’s grievance is sufficient to confer jurisdiction under § 301(a). See inífa, § II.
. None of the parties has objected to the somewhat unusual procedural posture in which this case has been presented to us. By granting the motions for directed verdicts, the district court has determined that as a matter of law, there is no issue to be submitted to the jury (even though the court had previously submitted the case to the jury). In effect, the district court, after declaring a mistrial, returned to the question whether the case should have gone to the jury and determined that it should not have.
. The portion of this quotation which we have emphasized answers, in our view, the claim by the Union that the Glover futility excеption applies only to the exhaustion of intraunion remedies but not to contractual grievance procedures. See Battle v. Clark Equip. Co.,
. We also believe that Owens and the Union are probably collaterally estopped from raising this argument. In the first appeal of this case, we determined that plaintiffs could state a claim for breach of the duty of fair representation in part because “it would have been futile for the other plaintiffs to file similar grievances.”
. In addition, another exception to the exhaustion requirement of Republic Steel is potentially applicable to this case. At least one court (the Ninth Circuit) has determined that if a grievance seeks modification of the collective bargaining agreement, exhaustion principles are not applicable because the relief sought is unattainable through the grievance procedure. See Williams v. Pacific Maritime Ass’n,
. We have serious doubts whether such a lack of timeliness defense can ever be asserted in this suit under § 301(a). We have found no case similar to the one at bar where a court dismissed a § 301(a) suit for failure to file a timely grievance when, as here, the grievance was apparently accepted by the union and acted upon by the employer. Typically, the failure to file a timely grievance is an issue when a party attempts to compel arbitration under § 301(a), see, e.g., Tobacco Workers Union, Local 317 v. Lorillard Corp.,
. The cases relied upon by the district court on 'this point are clearly distinguishable. In Hubicki v. ACF Indus., Inc.,
The district court also cited Chambers v. Beaunit Corp.,
. It is unclear from the record whether the Union raised this argument in the district court. Although employers may also raise this defense where the exhaustion of intraunion remedies might reactivate the grievance or provide the relief sought in the grievance, see Clayton v. UAW,
. The tack taken by the concurring opinion with respect to the exhaustion of intraunion remedies and the timeliness of complaint would perhaps be apt if the injury alleged arose out of the administration of the contract. However, where, as here, the alleged injury arises instead out of an agreement struck during collective bargaining, the disposition of Schultz’s grievance was a foregone conclusion. It could therefore be seen as futile for Schultz to have attempted to exhaust intraunion remedies or for the other plaintiffs to have filed complaints. Further, since the subject matter before us is not an injury arising out of the administration of the contract, it is much more difficult to determine when Schultz’s grievance arose (for purposes of the three-day limit) in the context of a continuing agreement between Owens and the Union.
. Plaintiffs argue that the unreasonableness of the Union’s interpretation of the contract language is evinced by our decision in Schultz I where, according to plaintiffs, the court interpreted this ratio language to be “mandatory.” But plaintiffs misstate our holding in Schultz I. The limited holding of that opinion was that the 1974 “collective bargaining agreement establishes a mandatory apprenticeship program that was not made voluntary by the Standards of Apprenticeship or by [certain changes agreed to during contract negotiations (which are not discussed here)].”
. The major goal of the duty of fair representation is to identify and protect individual expectations as far as possible without undermining collective interests. Where the individual and сollective group interests clash, the former must yield to the latter. When collective bargaining agreements are executed, there may be many provisions which lead individual employees to believe they are entitled to specified benefits but, in the final analysis, the collective group interests must remain paramount. The nature of any labor policy requires an election between preserving group interests through democratic processes and adopting external restraints to protect the minority.
Alvey v. General Elec. Co.,
. Plaintiffs argue that the secret nature of the agreement between Owens and the Union is evidence of the Union’s bad faith conduct. But the plaintiffs’ only evidence of alleged failure to disclose are the assertions by several plaintiffs that Hemken never mentioned the oral agreement regarding the apprenticeship clause at the contract ratification meeting held in December 1971. Although Hemken testified that he disclosed the oral interpretation to the membership, for purposes of affirming a directed verdict we must accept the assertions of certain plaintiffs to the contrary. In any event, these assertions do not in our view demonstrate bad faith by the Union since the Union’s agreement regarding the interpretation of the apprenticeship clause was made crystal clear to all employees, including the plaintiffs, during 1972 and 1973 at the monthly grievance meetings. Moreover, the Union pressed the plaintiffs’ claims for more apprentices during the 1974 contract negotiations, again evincing a good faith effort to achieve the plaintiffs’ demands through the collective bargaining process. The case before us is thus distinguishable from the affirmative misrepresentation present in Anderson,
. We have indicated previously that the apparent economic ramifications of accepting a mandatory interpretation of the apprenticeship provisions of the contract — the same reasons given by Hemken in his letter to Schultz — were proper considerations for the Union and their consideration was consistent in this case with its duty of fair representation.
Concurrence Opinion
concurring.
I concur in the result reached by the majority in Part III, infra, that there has been no breach of the duty of fair representation, but I am compelled to write separately because I feel the majority has misinterpreted the basic' federal labor policy mandating that the manner in which disgruntled or aggrieved employees file grievances and indeed their right to file a grievance must initially be determined by resort to their labor contract. As noted by the district court, every plaintiff herein, except Schultz, “failed to file grievances or formal claims against Owens-Illinois pursuant to the grievance and arbitration machinery of the labor contract.” It is a basic tenet in almost all labor contracts that individual employees wishing to assert a contract grievance must initially make use of those procedures (arbitration, etc.) provided for in the labor contract between the parties. Re
“As a general rule in cases to which federal law applies, federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress. If the union refuses to press or only perfunctorily presses the. individual’s claim, differences may arise as to the forms of redress then available. But unless the contract provides otherwise, there can be no doubt that the employee must afford the union the opportunity to act on his behalf. Congress has expressly approved contract grievance procedures as a preferred method for settling disputes and stabilizing the ‘common law’ of the plant. Union interest in prosecuting employee grievances is clear. Such activity complements the union’s status as exclusive bargaining representative by permitting it to participate actively in the continuing administration of the contract. In addition, conscientious handling of grievance claims will enhance the union’s prestige with employees. Employer interests, for their part, are served by limiting the choice of remedies available to aggrieved employees. And it cannot be said, in the normal situation, that contract grievance procedures are inadequate to protect the interests of an aggrieved employee until the employee has attempted to implement the procedures and found them so.
A contrary rule which would permit an individual employee to completely sidestep available grievance procedures in favor of a lawsuit has little to commend it. In addition to cutting across the interests already mentioned, it would deprive employer and union of the ability to establish an uniform and exclusive method for orderly settlement of employee grievances. If a grievance procedure cannot be made exclusive, it loses much of its desirability as a method of settlement. A rule creating such a situation ‘would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements.’ ”
Republic Steel,
This strong statement of federal labor policy mandates that employees who are aggrieved by the actions of their employer must first look to and follow the language contained in their labor contract, the “exclusive method for orderly settlement of employee grievances.” It is only after this “exclusive method” fails that the federal courts are available to the grievant. Courts must not permit employees to ignore the procedures mutually agreed upon for handling grievances by filing suit in the federal courts, thus increasing the burden on our already overcrowded court system. Grievance procedures, including arbitration, were agreed upon by labor and management to avoid the time and еxpense of litigation and further to avoid industrial strife. United States Steelworkers of America v. Warrior & Gulf Navigation Co.,
The contract in the instant dispute requires that any grievance be filed within three working days of the event giving rise to the claim. The plaintiffs herein (with the exception of Schultz) did not even attempt to file a grievance, completely disregarding the three-day time limit set forth in the labor contract. The majority ignores the fact that “[w]e must construe the contract as written, rather than make a new contract for the parties,” Oddie v. Ross Gear and Tool Co.,
“[t]he allegations are that the bargaining representatives of the car employees have been acting in concert with the railroad employer to set up schemes and contrivances to bar Negroes from promotion wholly because of race. If that is true, insistence that petitioners exhaust the remedies administered by the union and the railroad would only serve to prolong the deprivation of rights to which these petitioners according to their allegations are justly and legally entitled.”
Glover,
In contrast to the egregious conduct of the Union and the employer in Glover, there is nothing in the record in the instant case which demonstrates that the bargaining representatives and Owens-Illinois were “acting in concert” or “set up schemes and contrivances” to deprive the plaintiffs herein of rights to which they are legally entitled. While it is true that the Union and the employer mutually agreed upon an interpretation of the contract which is adverse to the plaintiffs’ position, this alone does not justify the majority’s conclusion that “once Schultz’s grievance was rejected, it would be futile for the plaintiffs other than Schultz to have filed grievances.” The conduct of the employer and the Union hеrein does not rise to the level of the parties in Glover, and therefore the mere assumption on the part of the plaintiffs that the Union would not effectively act upon their grievances is insufficient to disregard the filing requirements of the contract and Republic Steel.
Finally, I take issue with the majority’s position that the defendants should be equitably estopped from raising the defenses of the plaintiffs’ failure to timely file a grievance and/or exhaust intraunion remedies. Initially, it must be noted that even if the doctrine of equitable estoppel were to be available to any of the plaintiffs, which I do not concede that it is, that doctrine would only be available to Schultz. This is so because the Union’s action or inaction with respect to objecting to the timeliness of Schultz’s filing could only reasonably induce action or inaction on the part of Schultz. Schultz’s grievance was an individual one, and as such, any action on the part of the defendants with regard to this grievance affects Schultz only. Thus, I cannot understand the majority’s position that “the groundwork could have been laid for the filing of a timely grievance, and the claim could thus have been preserved.” The district court noted that Schultz’s grievance was filed in 1976, while the events which gave rise to the grievance occurred during the period of 1971 through 1974. I am unable to understand what “groundwork could have been laid for the filing of a