Opinion
Cause No. IP98-0970-C-M/S
July 26, 2000
ORDER ON MOTIONS FOR SUMMARY JUDGMENT
This matter comes before the Court on the motions of defendants, AM General Sales Corporation and/or AM General Corporation ("AM General") and the International Union and Local 555 of the United Automobile, Aerospace and Agricultural Implement Workers of America, UAW ("Union"), seeking judgment in their favor as a matter of law on all of the claims presented in the complaint filed by Mary Akers and other former AM General employees ("Employees") on June 18, 1998. The Employees brought this action under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. They allege that AM General breached its contractual obligations to the Employees under the collective bargaining agreement. Compl. ¶¶ 42-43. Further, they contend that the Union breached its duty of fair representation, failed to negotiate in good faith and failed to protect the seniority rights of union members with respect to negotiating the terms of a plant closing agreement. Id. ¶¶ 46-48, 51-54, 57-58. The Court has fully considered the parties' arguments and, for the reasons discussed below, GRANTS the defendants' motions for summary judgment.
The Employees also present several state law claims including fraud and constructive fraud. Compl. ¶¶ 31-34, 36-40. However, the Employees concede in their response brief that these claims are preempted by § 301 of the LMRA because resolution of this matter requires interpretation of the terms of the CBA.
I. FACTUAL PROCEDURAL BACKGROUND
The Employees were employed by AM General at the Indianapolis stamping plant. Joint Statement of Undisputed Facts ("Joint Statement") ¶ 2. Each employee was a member of Local 555 of the UAW. Id. As members of the Union, the terms and conditions of the Employees' employment were governed by a collective bargaining agreement ("CBA") which was ratified on February 27, 1995. Id. ¶ 1.
On or about January 22, 1997, AM General announced its intention to close the stamping facility due to business considerations. Id. ¶ 3. After this announcement was made, members of the Local 555 bargaining committee met with representatives from AM General management on over twenty different occasions to discuss and bargain over a plant closing agreement ("Closing Agreement") which would determine the financial impact that closing the plant would have on employees represented by the Union. Id. ¶ 4. Representative Robert Breedlove ("Breedlove") from the International Union was present and actively participated in the negotiating sessions. Id. ¶ 5.
At some point during the negotiations, the Employees became unhappy with the process because they believed that the Union was misrepresenting the contents of the Closing Agreement and was not properly representing the Local 555 membership. Boyd Aff. ¶ 7. On April 24, 1997, the Employees drafted and circulated a petition expressing their unhappiness with AM General and the Union. Joint Statement ¶ 6. The Employees contend that they then attempted to use the petition to file a grievance with the Union but were told by AM General's human resources director, Cynthia Springer, Local 555 president Ernie Hoskins ("Hoskins") and Local 555 vice-president Amos Mills ("Mills") that the grievance procedures outlined in the existing CBA were no longer in effect. Boyd Aff. ¶ 10.
On September 28, 1997, the Union ratified a written Memorandum of Agreement with AM General regarding the plant closing by a vote of seventy-six to thirty-five. Joint Statement ¶ 9. Prior to the ratification, the Employees assert that they demanded that the Union be represented by counsel and that they were told by Hoskins and Mills that the Union did not need to be represented by counsel during the negotiations, that they would continue to refuse to consult an attorney and that the CBA "wasn't worth the paper that it was written on." Boyd Aff. ¶¶ 9, 12. Further, they claim that Breedlove, Hoskins and Mills told them at the ratification meeting that they either had to accept the Closing Agreement or else they would receive nothing in the form of severance pay under the CBA. Id. ¶ 11.
Under the terms of the Closing Agreement, the new agreement replaced the existing collective bargaining agreement only with respect to employees which had been laid-off and only to the extent that the provisions of the existing CBA were not incorporated into the Closing Agreement. Breedlove Aff. ¶ 14. The Closing Agreement expressly provided that benefits under the Supplemental Unemployment Benefit Plan ("SUB Plan") in the CBA would be paid in accordance with the terms of the CBA. Id. ¶ 18. But, all payments under the SUB Plan remained subject to funding and other eligibility requirements as set forth in the plan. Id. In addition, the Closing Agreement provided that five employees with more than twenty-nine years of service would receive full retirement benefits even though they were permanently laid-off before they achieved the required thirty years of service. Id. Ex. C. With respect to all other employees, AM General was obligated to award special plant closing benefits ranging from $500 to $8,000 depending on the employee's length of service. Id.
The SUB Plan provides benefits to employees who have been laid-off as well as employees who are underemployed. There are two general types of benefits available: (1) regular and short-week benefits which are paid on a weekly basis during periods of unemployment or underemployment, and (2) separation payments which are paid when an employee has been laid-off for a continuous period of twelve months and chooses to terminate his employment and in cases of early retirement or disability. The SUB Plan is funded by required contributions from the employer. Under Article VI, Section 5, the employer's required contribution is the lesser of the amount required to fully fund the Plan or the amount calculated under a formula which is based on the number of hours worked by employees during the relevant pay period. Thus, under this formula, the employer's obligation to contribute is zero when there are no active employees on the payroll.
By October 31, 1997, all employees had been laid-off, except for one local union representative who was retained for several weeks to assist other employees with issues stemming from the plant closing. Id. ¶ 15. At the time the plant actually closed, the SUB Plan was funded in the approximate amount of $186,000. Id. ¶ 23. Since the plant shut down, AM General has made no further contributions to the fund because there is no active payroll. Id. However, the existing funds have been paid out in regular weekly benefits to employees who were laid off and are eligible for benefits under the SUB Plan. Id.
Once the plant closed, the Employees remained disgruntled with the compensation that they had received. In early January 1998, they consulted an attorney. Boyd Aff. ¶ 17. On January 20, 1998, the Employees signed and mailed a document titled "Grievance" to AM General, UAW Region 3 and the bargaining committee of Local 555. Pl.'s Ex. E. There, the Employees stated among other things: "We feel that the closing agreement is a gross miscarriage of justice. The closing agreement offers no where near the compensation due our members for our loyal commitment and service to the UAW Region 3 and AM General Indianapolis." Id. The document then provided:
Specific Adjustments Requested
We request compensation in the amount agreed upon in the separation payment table in our benefit book.
We request all monies that we have already earned under the Productivity Bonus Program.
We request all members with 25 years of seniority be allowed to retire.
We request fair compensation for the remaining terms of the contract.
We request help in obtaining jobs in the local Indianapolis area that our members may qualify for.
We request an official apology from AM General Indianapolis, the bargaining committee of UAW Local 555 and UAW Region 3 for the rude manner in which we have been treated.Id. In response, Betsey Engel, associate general counsel for the International Union, drafted a letter on February 18, 1998 which stated:
This is to acknowledge receipt of a document entitled "Grievance" sent by your office regarding the closing agreement between AM General Corporation and the UAW. Please by advised the closing agreement that is the subject of said "grievance" was presented to and ratified by the membership of Local 555 UAW on September 28, 1997. All members of the AM General Corporation bargaining unit had the opportunity to participate in that ratification vote.
If any member wished to protest the closing agreement they had the right to do so under Articles 33 and 32 of the UAW Constitution. I am enclosing a copy of that document for your information.
Pl.'s Ex. F.
On June 18, 1998, the Employees filed suit in the Marion County Superior Court. An amended complaint was filed on July 17, 1998. That same day, the defendants filed a notice of removal. At present, this matter is before the Court on the motions for summary judgment filed by AM General and the Union on September 27, 1999. The defendants assert that there are no genuine issues of material fact and that they are entitled to judgment as a matter of law. The Court has jurisdiction over this matter pursuant to 29 U.S.C. § 185 and 28 U.S.C. § 1331. Having reviewed the factual background, the Court now turns to a brief overview of the standards governing its decision.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the opposing party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed fact is material only if it might affect the outcome of the suit in light of the substantive law. Id.
The moving party has the initial burden to show the absence of genuine issues of material fact. See Schroeder v. Barth, 969 F.2d 421, 423 (7th Cir. 1992). This burden does not entail producing evidence to negate claims on which the opposing party has the burden of proof. See Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n. 3 (7th Cir. 1994). The party opposing a summary judgment motion bears an affirmative burden of presenting evidence that a disputed issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Scherer v. Rockwell Int'l Corp., 975 F.2d 356, 360 (7th Cir. 1992). The opposing party must "go beyond the pleadings" and set forth specific facts to show that a genuine issue exists. See Hong v. Children's Mem. Hosp., 993 F.2d 1257, 1261 (7th Cir. 1993), cert. denied, 511 U.S. 1005 (1994). This burden cannot be met with conclusory statements or speculation, see Weihaupt v. American Med. Ass'n, 874 F.2d 419, 428 (7th Cir. 1989), but only with appropriate citations to relevant admissible evidence. See Local Rule 56.1; Brasic v. Heinemann's Inc., Bakeries, 121 F.3d 281, 286 (7th Cir. 1997); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923-24 (7th Cir. 1994). Evidence sufficient to support every essential element of the claims on which the opposing party bears the burden of proof must be cited. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In considering a summary judgment motion, a court must draw all reasonable inferences "in the light most favorable" to the opposing party. Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992). If a reasonable factfinder could find for the opposing party, then summary judgment is inappropriate. Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Celotex Corp., 477 U.S. at 322-23; Shields Enters., 975 F.2d at 1294.
III. DISCUSSION
Initially, AM General and the Union claim that they are entitled to summary judgment because the Employees failed to file their action within the statute of limitations applicable to § 301 claims. The Supreme Court held in DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151 (1983), that § 301 claims are governed by the six-month statute of limitations period provided in the National Labor Relations Act. Id. at 172. In Metz v. Tootsie Roll Indus., 715 F.2d 299 (7th Cir. 1983), cert. denied, 464 U.S. 1070 (1984), the Seventh Circuit explained that this period begins to run "when the claimant discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged [violation]." Id. at 304.
In this case, the parties do not dispute that the Employees' cause of action accrued on September 28, 1997, when the Union members ratified the Closing Agreement negotiated with AM General. Nevertheless, the Employees assert that their late filing should be excused because the statute of limitations should be tolled under the doctrine of equitable estoppel. Under this doctrine, a defendant who conceals vital information about the actionability of a plaintiff's claim or makes representations to the plaintiff which lead the plaintiff to delay filing an action can be estopped from relying on the statute of limitations as a defense. Chapple v. National Starch Chemical Co. and Oil, 178 F.3d 501, 506 (7th Cir. 1999). In Chapple, the Seventh Circuit stated that the defendant's misconduct must be distinct from that which forms the basis of the plaintiff's complaint: "[Fraudulent concealment] denotes efforts by the defendant — above and beyond the wrongdoing upon which the plaintiff's claim is founded — to prevent the plaintiff from suing." Id. at 506-507 (quoting Cada, 920 F.2d at 451). In addition, the Court noted that the plaintiff must have relied on the defendant's fraudulent concealment in failing to file a timely claim. Id. at 507.
Here, the Employees claim that the doctrine of equitable estoppel tolls the statute of limitations until February 18, 1998, when their "grievance" was officially rejected by the Union, because AM General and the Union actively concealed the actionability of their claim by misrepresenting the contents and continuing efficacy of the CBA and by misrepresenting the contents of the Closing Agreement. In support of this contention, the Employees assert that AM General officials as well as Hoskins and Mills, Local 555 president and vice-president, told them that the CBA "wasn't worth the paper it was written on" and that they couldn't file a grievance or discuss the matter with Breedlove, the International Union representative. In addition, the Employees state that Breedlove, Hoskins and Mills told them that they better accept the Closing Agreement because otherwise they wouldn't receive anything under the CBA. Finally, the Employees claim that Local 555 officials refused to consult with an attorney during the negotiations and that this was important because the language of the CBA was highly technical.
The Employees have failed to demonstrate a genuine issue of material fact for trial for several reasons. First, the doctrine of equitable estoppel is inapplicable to this matter because the facts presented do not establish that the Employees' failure to file their claim on time was done in reliance on the defendants' conduct. Even if the Court assumes that AM General officials and Local 555 officers did in fact tell the Employees that they had no recourse under the internal grievance procedures set forth by the Union, each of the employee affidavits submitted by the Employees state that the Employees tried to file a "grievance" on April 29, 1997 by submitting a petition which contained the names of Local 555 members who felt that they were being misrepresented by union officials in the negotiation process. Moreover, in January 1998 the Employees again submitted a document entitled "grievance" to AM General and the Union which they believed would redress the harm they allegedly incurred with the ratification of the Closing Agreement. From these actions, the Court concludes that during the six-month period following September 28, 1997, the date on which their claim accrued, the Employees believed that they had a claim regardless of what they had previously been told by either of the defendants. Thus, without more, the Employees have failed to satisfy the causal requirement which is implied in the estoppel doctrine.
Second, the fact that the terms of the CBA were complex and difficult to understand and that Local 555 officers may have refused to consult an attorney during the negotiations process is inconsequential to the extent that the Employees hired an attorney in January 1998, which was well within the limitations period. Even if the Employees were unable to discover and understand the internal grievance procedure which was available to them in the weeks immediately following the adoption of the Closing Agreement, it is undisputed that they had the advice of legal counsel during a point at which filing a claim would have been timely. Therefore, their failure to bring an action within the statute of limitations is unexcused.
Third, even if the Employees' action was timely, AM General and the Union would still be entitled to judgment as a matter of law because the Employees failed to exhaust internal union remedies before filing suit. Section 301 of the LMRA does not contain a complete exhaustion requirement, however, the Supreme Court has held that exhaustion may be required in cases where complete relief could result from use of internal processes. Clayton v. UAW, 451 U.S. 679, 689 (1981). In Clayton, the Court directed the lower courts to use three factors in considering whether to require exhaustion:
first, whether union officials are so hostile to the employee that he could not hope to obtain a fair hearing on his claim; second, whether the internal union appeals procedures would be inadequate either to reactivate the employee's grievance or to award him the full relief he seeks under § 301; and third, whether exhaustion of internal procedures would unreasonably delay the employee's opportunity to obtain a judicial hearing on the merits of his claim. If any of these factors are found to exist, the court may properly excuse the employee's failure to exhaust.Id. at 689. In applying Clayton, the Seventh Circuit has held that a court can excuse exhaustion if the plaintiff shows the futility of pursuing internal remedies. Hammer v. International Union, United Auto., 178 F.3d 856, 858 (7th Cir. 1999). This is a fact-specific inquiry which is not limited to the Supreme Court's guiding factors. Id. But, it is well-settled that a plaintiff must show that union hostility is so pervasive that it infects every step of the internal appeals process. Id. Absent a showing of futility, the Seventh Circuit requires exhaustion where a plaintiff seeks equitable relief and money damages, so long as the internal processes can give complete relief. Id.
Here, the Employees have failed to demonstrate any futility or hostility which would excuse their failure to exhaust the internal grievance procedures available to them through the Union. Even if the Court assumes that Local 555 officers and AM General officials did in fact attempt to prevent the Employees from filing a grievance by telling them that they couldn't file a grievance and that the CBA wasn't worth anything, the Seventh Circuit has held that a plaintiff cannot rely on the statements of union officials regarding futility of the process to excuse exhaustion. See Miller v. General Motors Corp., 675 F.2d 146, 150 (7th Cir. 1982) (statement by union officer that he would withdraw grievance if filed did not excuse exhaustion). In this case, Article 33 of the UAW Constitution expressly provides that the exhaustion of union remedies is mandatory. By becoming members of the Union, the Employees were contractually obligated to exhaust union remedies before resorting to a court action. The Employees had a duty to know their appeal rights. See id. And, it is undisputed that the Employees had access to the union newsletter which frequently contained articles that outlined the internal procedure for bringing a grievance. Thus, any statements by the Union or AM General which the Employees perceived as an attempt to stop them from filing a grievance do not excuse their failure to exhaust the remedies available.
Section 5 provides: "OBLIGATION TO EXHAUST INTERNAL UNION REMEDIES: It shall be the duty of any individual or body, if aggrieved by any action, decision or penalty imposed, to exhaust fully the individual or body's remedy and all appeals under this Constitution and the rules of this Union before going to a civil court or governmental agency for redress."
Furthermore, the written correspondence from the Union is likewise insufficient to establish hostility. Specifically, the letter from Betsey Engel, associate general counsel for the International Union, merely informed the Employees that the remedy for redressing their alleged harm was the grievance procedure set forth in Articles 32 and 33 of the UAW Constitution. Nothing in the letter suggests that the Union would be biased in reviewing the Employees' case. Moreover, even if it did, it is well-settled that hostility must permeate every step of the internal appeals process to excuse exhaustion. Hammer, 178 F.3d at 859 (citing Sosbe v. Delco Elec., 830 F.2d 83, 86 (7th Cir. 1987)). Here, the Constitution provides for four layers of internal appeals: two at the local level, one to the International Union and a final appeal to an independent panel known as the Public Review Board. This last step in the process would have taken the Employees' claim outside the domain of the allegedly hostile Local 555 and International Unions. The Employees have failed to demonstrate that the Public Review Board could not fairly review their claim. Thus, they are not excused from failing to exhaust the internal processes, and summary judgment for AM General and the Union is appropriate.
IV. CONCLUSION
The Employees have failed to present sufficient evidence from which the Court could find a genuine issue of material fact for trial in this matter. Therefore, the motions for summary judgment filed by AM General and the Union are GRANTED.
IT IS SO ORDERED.