Gurumurthy KALYANARAM, Plaintiff-Appellant, v. AMERICAN ASSOCIATION OF UNIVERSITY PROFESSORS AT THE NEW YORK INSTITUTE OF TECHNOLOGY, INC., Defendant-Appellee.
Docket No. 12-3630-cv.
United States Court of Appeals, Second Circuit.
Decided: Feb. 3, 2014.
Argued: June 26, 2013.
This suit challenges the extraordinary measures taken by FRBNY to rescue AIG from bankruptcy at the height of the direst financial crisis in modern times. In light of the direct conflict these measures created between the private duties imposed by Delaware fiduciary duty law and the public duties imposed by FRBNY‘s governing statutes and regulations, we hold that in this suit, state fiduciary duty law (including the state law cause of action for aiding and abetting breaches of state law fiduciary duty) is preempted by federal common law. The district court thus correctly concluded that Starr has not pled a plausible claim.
CONCLUSION
For the reasons stated above, we AFFIRM the judgment of the district court granting FRBNY‘s motion to dismiss Starr‘s complaint.
Amelia K. Tuminaro, Gladstein, Reif & Meginniss, LLP, New York, NY, for Appellee.
Before: NEWMAN, WINTER and DRONEY, Circuit Judges.
DRONEY, Circuit Judge:
Gurumurthy Kalyanaram (“Kalyanaram“) brought this action against his union, the American Association of University Professors at the New York Institute of Technology, Inc. (“the Union“), alleging that it breached its duty of fair representation. The district сourt granted the Union‘s two motions for partial judgment on the pleadings and then entered judgment in favor of the Union based on those rulings. We address: (1) whether the statute of limitations on a claim that a union breached its duty of fair representation commences upon the issuance of the arbitrator‘s “final award,” where the collective bargaining agreement provides that the arbitrator‘s decision shall be final and binding “subject to appeal by either party,” and (2) whether a state court action to vacate the arbitration award tolls that limitations period.
BACKGROUND
The allegations in the complaint and the additional materials submitted in connection with the motions before the district court allege the following.1 Kalyanaram was a professor in the School of Management at the New York Institute of Technology (“NYIT“), and a member of the Union. A number of students at NYIT‘S MBA program in Vancouver, Canada, sent a letter to the NYIT administration complaining of sexual harassment and racial discrimination by Kalyanaram. NYIT investigated and issued Kalyanaram a letter of termination in May 2007. NYIT issued a second termination letter in July 2007 based on complaints of misconduct by Kalyanaram submitted by students at its New York City campus.
The arbitration culminated in a decision on August 13, 2009—entitled “Interim Award of Arbitrator“—in which the arbitrator found that there was just cause under the CBA to terminate Kalyanaram, though he would be allowed to remain on research leave for one year with full pay whilе seeking new employment. NYIT was also required to provide a “neutral reference” and “not disparage Professor Kalyanaram to potential employers.” Kalyanaram moved to reconsider this decision, but on October 13, 2009, the arbitrator issued what was entitled a “Final Award of Arbitrator” (“Final Award“), which adopted the August 13, 2009 award. In the Final Award, the arbitrator specifically retained the authority to implement it.
Kalyanaram then filed a petition pursuant to
While he was contesting the Final Award in state court, Kalyanaram also made various submissions to the arbitrator challenging the manner in which NYIT had implemented the award by failing to send timely letters of reference and by mischarаcterizing the circumstances of his termination. Through the period of the spring of 2010 to the spring of 2011, there was a series of requests by Kalyanaram‘s counsel to the arbitrator to have NYIT issue the letters of recommendation, correct mischaracterizations to potential employers of the reasons for his termination, and pay Kalyanaram the amounts ordered. Through a series of “supplemental awards,” the arbitrator resolved these disputes ovеr the references, and extended partial salary for Kalyanaram because of delays he faced in obtaining new employment due to the dispute over the reference letters.
On September 7, 2010, while Kalyanaram‘s petition to vacate the award was still pending in state court, he filed the instant complaint against the Union. It alleged that the Union breached its duty of fair representation in various ways during the
On March 21, 2011, the Union filed a motion in the district court for partial judgment on the pleadings pursuant to
DISCUSSION
This Court “review[s] a dismissal under
The primary question here is when Kalyanaram‘s DFR claim accrued. “In this circuit, it is well settled that the cause of action accrues no later than the time when plaintiffs knew or reasonably should have known that such a breach of the duty of fair representation had occurred, even if some possibility of nonjudicial enforcement remained.” Cohen v. Flushing Hosp. & Med. Ctr., 68 F.3d 64, 67 (2d Cir.1995) (internal quotation marks and alterations omitted; emphasis added). Where a union purports to fulfill its duty of fair representation during the hearing process, the requisite knowledge generally will not be inferred prior to the issuance of an arbitral award. See Ghartey v. St. John‘s Queens Hosp., 869 F.2d 160, 165 (2d Cir.1989). As we have explained, “the employee is entitled, during the hearing process, to trust in the abilities of her representative ... at least until an adverse arbitral decision suggests otherwise“; therefore, “[k]nowledge of the breach by the Union will not be attributed to [the employee] prior to the issuance of the
Kalyanaram presents two arguments that his DFR claim is timely, even though it was filed in the district court almost eleven months after the arbitrator‘s “Final Award” of October 13, 2009. The first is based on the action that was pending in New York state court through 2011. The second is that the “Final Award” was not final, given that the arbitrator continued to issue additional orders into 2011. We address each argument in turn.
I. The Effеct of the State Court Proceedings to Vacate the Award
Kalyanaram‘s first argument is two-pronged. He argues first that his DFR claim did not accrue, and the limitations period did not start to run, until the arbitrator‘s award was confirmed in state court. In the alternative, he argues that even if his claim did accrue when the arbitrator‘s award issued, the limitations period was tolled during the state court proceedings.
A. Accrual
Kalyanaram claims that because of language in the CBA, his DFR claim did not aсcrue until the state court denied his motion to vacate the Final Award. Article XXIII(5)(g) of the CBA states that “[t]he decision of the arbitrator shall be final and binding subject to appeal by either party to the applicable court.” Thus, Kalyanaram argues, “the grievance and arbitration process is not considered over until such judicial confirmation” of the award has taken place.
Kalyanaram‘s reading of Article XXIII(5)(g) is incorrect. The arbitrator‘s award was final аnd binding when it issued on October 13, 2009 and was denominated a “Final Award.” The CBA simply recognized that arbitral awards may subsequently be confirmed or vacated by a court. Although Kalyanaram objects that this reading would render the “subject to appeal” clause meaningless, the clause, even if unnecessary, avoids any controversy as to the parties’ pre-existing right to appeal an arbitration award.
The decisions on which Kalyanaram relies for his interpretation оf the “subject to appeal” clause are inapposite. In Edwards v. International Union, United Plant Guard Workers of America (UPGWA), 46 F.3d 1047, 1054 (10th Cir.1995), although the Tenth Circuit held that a plaintiff‘s DFR claim accrued only after he was notified that the district court dismissed his union‘s suit against the employer to obtain arbitration, the union in Edwards affirmatively “led [the plaintiff] to believe it could obtain arbitration on the merits of his grievance” by pursuing a judicial appeal. There is no claim here that the Union in this casе led Kalyanaram into believing that the arbitrator‘s award upholding his termination was anything but final or that further arbitration on the merits was permitted. Cf. King v. N.Y. Tel. Co., 785 F.2d 31, 34-35 (2d Cir.1986) (noting that an employee‘s reasonable reliance on union representations regarding the likely availability of arbitration would extend the accrual date of the employee‘s DFR claim).
Hester v. International Union of Operating Engineers is similarly unhelpful to Kalyanaram since it held that a DFR claim, as well as claims under the Labor-Management Reporting and Disclosure
B. Tolling
Kalyanaram also argues that even if his action in state court to vacate the arbitrator‘s award did not prevent his DFR claim from accruing, the state court action tolled the six-month limitations period.
As mentioned above, the applicable statute of limitations for Kalyanaram‘s DFR claim is based in federal law: section 10(b) of the National Labor Relations Act,
The question of whether the statute of limitations on a DFR claim is tolled during litigation in state court to confirm or set aside an arbitration award is one of first impression in this Circuit.
Although equitable tolling of limitations periods has been recognized in othеr contexts where pursuing a separate administrative remedy is a precondition to filing suit, see, e.g., Mt. Hood Stages, Inc. v. Greyhound Corp., 616 F.2d 394, 400, 406 (9th Cir.1980) (holding that proceedings before Interstate Commerce Commission equitably toll the Clayton Act limitations period), no such tolling is available where an optional, parallel avenue of relief is pursued. See Conley v. Int‘l Bhd. of Elec. Workers, Local 639, 810 F.2d 913, 915-16 (9th Cir.1987) (holding that pursuing a claim before the National Labor Relations Board does not toll an aсtion alleging that the union acted unfairly toward union members); Arriaga-Zayas v. Int‘l Ladies’ Garment Workers’ Union-Puerto Rico Council, 835 F.2d 11, 14 (1st Cir.1987) (noting that courts have “historically been reluctant to invoke tolling in circumstances where a claimant rides parallel horses in search of relief“); Harris v. Alumax Mill Prods., Inc., 897 F.2d 400, 404 (9th Cir. 1990) (emphasizing that courts are “reluctant to invoke tolling where a plaintiff is tardy in pursuing a parallel avenue of relief“).
The Fourth Circuit‘s decision in Kolomick v. United Steelworkers of America, District 8, AFL-CIO, 762 F.2d 354 (4th Cir.1985) is instructive in describing this distinction. Plaintiff Kolomick‘s union
The Fourth Circuit, however, rejected this argument because “tolling has been held not to apply in situations where a plaintiff pursues parallel avenues of relief.” Id. at 356. The court based its conclusion on three grounds. First, since claims of unfair labor practices brought before the NLRB “may be pursued independently from those brought pursuant to § 301,” the court was “not faced with a unitary statutory scheme mandating administrative action before suit can be brought in a federal forum.” Id. at 356-57. Second, “[t]he purposes of the two avenues of relief also differ.” Id. at 357. Finally, the court‘s conclusion was “in harmony with the salutary policy favoring the prompt resolution of labor disputes.” Id. (citing DelCostello, 462 U.S. at 168).
The same considerations compel the conclusion that Kalyanaram‘s suit in New York state сourt to vacate his arbitration award was a “parallel” avenue of relief to his DFR claim and thus did not toll the applicable limitations period. First, a suit to vacate an arbitration award in state court may be pursued independently of a DFR claim against a union: success in Kalyanaram‘s petition to vacate the arbitration award was not a prerequisite to bringing a DFR claim against the union. Like the Fourth Circuit in Kolomick, we are “not faced with a unitary statutory schemе” requiring the exhaustion of other remedies “before suit can be brought in a federal forum.” Id. at 356-57. Second, the purposes of the two avenues of relief differ. While a petition such as Kalyanaram‘s to vacate an arbitration award under
Kаlyanaram argues that his view is supported by the Fourth Circuit‘s decision in Trent v. Bolger, 837 F.2d 657 (4th Cir. 1988). Trent was a discharged postal worker whose union filed an untimely grievance on his behalf. Id. at 658. Since further arbitration was unlikely to succeed, he elected to “appeal his discharge to the MSPB,” i.e., the federal Merit System Protection Board, as was his right as a 19 military veteran. Id. After the MSPB dis-
Applying the test from Kolomick, the Fourth Circuit reversed and concluded that the MSPB proceedings were “not a parallel avenue of relief.” Id. at 659. The court noted that “[t]he grievance procedure and the MSPB could not be pursued independently becаuse the collective bargaining agreement specifically prohibited [employees in Trent‘s position] from pursuing both avenues of relief.” Id. Moreover, “the purposes of the two avenues of relief did not differ,” since they both “focused on ... whether the employee should have been discharged.” Id. Accordingly, the court concluded that the “the six-month statute of limitations [on Trent‘s claim] was tolled by [the MSPB] proceedings in the Federal Circuit Court.” Id. at 659-60.
Although Trent did allow for tolling pеnding judicial review of the MSPB‘s decision, Trent does not apply here. First, the judicial review in Trent was part of the same statutory scheme as the MSPB review that Trent was obligated to exhaust. Once Trent elected MSPB review, this became his exclusive avenue for relief. Trent‘s appeal to the Federal Circuit was merely part of his attempt to exhaust this statutory scheme of MSPB review. There is no comparable statutory relationship between Kalyanaram‘s arbitration proceeding and his attempt to judicially vaсate the arbitrator‘s decision.
Second, the Federal Circuit review in Trent addressed substantially the same questions as the underlying MSPB decision. Although the Federal Circuit‘s review of MSPB decisions is deferential, it does examine the merits of the MSPB‘s decision. See
Thus, Kalyanaram‘s petition to vacate the arbitrator‘s award constituted a request for relief that was not part of the same statutоry scheme as the underlying arbitration, and addressed questions distinct from those addressed at the arbitration. Trent, therefore, does not alter our conclusion that Kalyanaram‘s petition in state court and his DFR claim were “parallel” avenues of relief. Kolomick, 762 F.2d at 357. As a result, the proceedings in state court did not toll the limitations period on Kalyanaram‘s DFR claim against his union. Id.5
Kalyanaram also argues that his DFR claim is timely because the arbitrator‘s “Final Award” of October 13, 2009 was not аctually final, since the arbitrator later issued supplemental awards. But these subsequent awards merely effectuated the Final Award provisions concerning employment references. See Burns Int‘l Sec. Servs., Inc. v. Int‘l Union, United Plant Guard Workers of Am. (UPGWA) & Its Local 537, 47 F.3d 14, 16 (2d Cir.1995) (per curiam) (“[R]eservation of jurisdiction over a detail like overseeing the precise amount of back pay owed does not affect the finality of an arbitrator‘s award.“). Moreover, it was clear that this Final 17 Award constituted the final decision of the arbitrator on whether Kalyanaram‘s termination was justified. The October 13, 2009 award bore the heading “Final Award,” while the subsequent orders were only referred to as “Interim Order” or “Supplemental Award.” The subsequent awards also did not fundamentally alter or modify the Final Award, but rather supplemented it in ways that were consistent with the final resolution of the dispute about his termination. See Michaels v. Mariforum Shipping, S.A., 624 F.2d 411, 413 (2d Cir. 1980) (“In order to be ‘final,’ an arbitration award must be intended by the arbitrаtors to be their complete determination of all claims submitted to them.“). Kalyanaram‘s DFR claim, therefore, accrued when the Final Award issued.
CONCLUSION
For the foregoing reasons, the judgment of the district court is hereby AFFIRMED.