Opinion
No. CIV. A. 96-4862.
October 30, 1996
MEMORANDUM
I. Introduction
*1 Plaintiff was a member of the Sheet Metal Workers Local Union No. 19 which maintains an exclusive hiring hall through which it refers it members to jobs across parts of Pennsylvania, New Jersey and Delaware. Defendant John Willey ran the hiring hall and served as its dispatcher. Defendant Thomas Kelly was the Union's president.
Plaintiff alleges that defendants arbitrarily and discriminatorily refused to refer him to jobs and that their conduct gives rise to causes of action under various federal labor laws and under state common law. Defendants filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).FN1
FN1. Plaintiff also contends that defendant Kelly profited personally from Union dealings with its separately incorporated union hall in violation of § 501 of the Labor-Management Reporting and Disclosure Act. Defendants oppose plaintiffs application for leave to pursue this § 501 claim derivatively on behalf of the Union. Defendants also move to dismiss this claim. I do not address the application or the motion to dismiss in this Memorandum which disposes only of defendants' motion to dismiss plaintiff's discriminatory referral claims.
II. Standard of Review
When considering a motion to dismiss under Fed.R.Civ.P. 12(b)(6) I must take all factual allegations contained in the complaint as true and construe them in the light most favorable to the plaintiff. H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 249 (1989); Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). I may grant a motion to dismiss for failure to state a claim upon which relief can be granted only if "it appears beyond reasonable doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Frazier v. Southeastern Pennsylvania Transp. Authority, 785 F.2d 65, 66 (3d Cir. 1986).
III. Plaintiff's Allegations
Accepting plaintiffs allegations as true, the facts are as follows.FN2 At all relevant times plaintiff was a member of Local 19. Pursuant to a collective-bargaining agreement between Local 19 and the Sheet Metal Contractors Association of Philadelphia ("SMCA"), an association of employers, SMCA employers hired exclusively from a hiring hall administered by Local 19.
FN2. The Complaint attaches and incorporates the April 16, 1996 Administrative Law Judge's decision from the National Labor Relations Board hearing. The Judge determined that the Union, "[b]y failing and refusing to refer Karl Kilpatrick to employment with various employers based on arbitrary and discriminatory considerations" restrained and coerced plaintiff in violation of the National Labor Relations Act.
The hiring hall's procedures required the dispatcher, John Willey, to refer jobs in the order listed on the Out-of-Work List, or OWL, which was designed to give the first referral to the employee who had worked the fewest hours.
Plaintiff was perceived by Union members as part of a group opposed to defendant Kelly's Union presidency. In retaliation for this opposition, Kelly instructed Willey to "blacklist" plaintiff by denying him referrals he was entitled to receive according to the OWL. Defendants also willfully failed to notify plaintiff of changes in Local 19's rules regarding job referrals and the OWL.
Plaintiff alleges that this conduct violated the Union's duty of fair representation, the Labor-Management Relations Act, the National Labor Relations Act, and the Labor-Management Reporting and Disclosure Act.FN3 Plaintiff also alleges that these actions breached the collectivebargaining agreement and the Union's constitution. Finally, he asserts that defendants' conduct constitutes intentional interference with contract and breach of fiduciary duty under state common law.
FN3. Plaintiff concedes that he does not state a claim under the National Labor Relations Act and therefore this count is dismissed.
IV. Duty of Fair Representation
Plaintiff alleges both a federal common law and statutory breach of the duty of fair representation. Defendants concede that plaintiff states claims under both the common law and § 301 of the Labor Management Relations Act ("LMRA") and that the claims are not preempted.FN4 See Breininger v. Sheet Metal Workers' Int'l Ass'n, 493 U.S. 67 (1989); Vaca v. Sipes, 386 U.S. 171 (1967). Defendants, however, contend that the claims are barred by the applicable six-month statute of limitations.
FN4. Defendants Kelly and Willey move to dismiss of the breach of the duty of fair representation claims against them in their individual capacities. Because § 301 plainly states that monetary judgments "shall not be enforceable against any individual member or his assets" I will dismiss the duty of fair representation claims as to defendants Kelly and Willey in their individual capacities. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 247-48 (1962); Evangelista v. Inlandboatmen's Union of Pacific, 777 F.2d 1390, 1400 (9th Cir. 1985).
*2 The Labor Management Relations Act does not contain a statute of limitations for breach of the duty of fair representation claims. The general rule where a federal claim lacks a limitations period is to borrow the most analogous state limitations period. Reed v. United Transp. Union, 488 U.S. 319, 323 (1989). Defendants assert, however, that the instant case invokes an exception to the general rule which mandates application of the six-month statute of limitations from § 10(b) of the National Labor Relations Act ("NLRA").
In DelCostello v. International Bhd. of Teamsters, 462 U.S. 151 (1983), the Court, while warning that its holdings "should not be taken as a departure from prior practice of borrowing [state] limitations periods for federal causes of action, in labor law or elsewhere," applied the NLRA limitations period for charges of unfair labor practices against both the employer and the union. FN5 462 U.S. at 171. The Court found state statutes of limitations inappropriate because they would allow "disputes involving critical terms in the collective-bargaining relationship between company and union" to remain unresolved "as much as [three] years later." The Court feared that this delay in resolving issues that affected ongoing labor-management negotiations would make unworkable "the grievance machinery under a collective bargaining agreement [which] is at the very heart of the system of industrial self-government." Id. at 168-69 (citing United Parcel Service v. Mitchell, 451 U.S. 56, 63-64 (1981)). See also International Union, United Automobile, Aerospace Agriculture Implement Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 706-07 (1966)). Accordingly, the Court concluded that a departure from the general rule was warranted because a shorter statute of limitations was necessary to minimize uncertainty and disruption in the bargaining process.
FN5. The plaintiff in DelCostello raised a "hybrid" claim by alleging both that the employer breached the collective-bargaining agreement and that the union breached its duty of fair representation. Plaintiff in this case does not raise a hybrid claim because the employer is not a defendant and the claim does not impact the negotiations between the employer and the union.
The Court of Appeals has explicitly refused to extend the DelCostello rationale to disputes within a union that do not affect labor-management relations. In Brenner v. Local 514, United Bhd. of Carpenters, the Court of Appeals stated "that the interest in the rapid resolution of labor disputes does not outweigh the union member's interest in vindicating his rights when . . . a dispute is entirely internal to the union." 927 F.2d 1283, 1295. If the dispute has "no more than an indirect influence on the union's ability to negotiate effectively with those employers who hire [the union members] through the hiring hall, [then] we conclude that the rationale behind DelCostello's narrowly circumscribed exception is inapplicable." Id. The Brenner Court thus applied the state statute of limitations rather than the six-month NLRA limitations period to plaintiffs § 301 breach of fair representation action alleging discriminatory treatment by the union and its officials in retaliation for his internal union activities.FN6
FN6. While courts have applied the six-month limitations period to non-hybrid claims they have only done so when the claims against the union challenged the union's performance of its duties vis-a-vis the employer and thus directly implicated the concerns expressed in DelCostello. See Stokes v. Local 116 of the Int'l Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, 1993 WL 23895 (E.D.Pa. 1993); Phelan v. Local 305 of United Ass'n of Journeymen, 973 F.2d 1050 (2d Cir. 1992). Phelan and Stokes are distinguishable from this case which involves neither the conduct of the employer nor the union's dealings with the employer, but rather involves a purely internal dispute between the union and one of its members. See Martin v. District No. 1-Marine Engineers' Beneficial Ass'n, 1994 WL 34044, at *6-7 (E.D.La. 1994) (holding § 10(b)'s limitations period inapplicable to claim attacking union's internal processes and not its representation of members in grievance and arbitration proceedings with employer).
The instant case is similar to Brenner because plaintiff challenges the Union's internal handling of its hiring hall procedures, a claim unrelated to the conduct of any of the employers or the Union's negotiations with the employers.FN7 Therefore DelCostello is inapposite and I must look to state law to determine the applicable limitations period.
FN7. Defendants attempt to distinguish this case, which involves an exclusive hiring hall, from Brenner which involved a non-exclusive hiring hall. This distinction is irrelevant to the rationale on which Reed and Brenner relied in rejecting the DelCostello six-month statute of limitations. Nor am I persuaded by defendants' attempt to distinguish Brenner on the grounds that this case requires interpretation of the collective-bargaining agreement because interpretation of the collective-bargaining agreement was equally relevant in Brenner.
*3 Next I must decide which state statute of limitations is most analogous to plaintiffs claims. Defendants assert that this action is most analogous a personal injury tort. Plaintiff contends that its claim more closely resembles a contractual cause of action and that the statute of limitations governing breach of contract actions rather that tort actions should apply.
To recover for breach of the duty of fair representation plaintiff must prove more than mere breach of the collective bargaining agreement or the union constitution. He must prove that the "union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith." Marshall v. Local Union No. 6, Brewers and Maltsters, 960 F.2d 1360, 1370 (8th Cir. 1992) (citing Vaca, 386 U.S. at 190). This inquiry into defendants' standard of conduct rather than merely their noncompliance with contractual provisions distinguishes the claims from breach of contract actions and likens them to tort claims.
The relationship between a union and its members is akin to the fiduciary relationship between a trustee and the trust's beneficiaries and between corporate officers and the corporation's shareholders. GTE North, Inc. v. Communication Workers of America, Local 4773, 927 F.Supp. 296, 300 (N.D.Ind. 1996). "Just as these fiduciaries owe their duty of loyalty, a union owes employees a duty to represent them adequately as well as honestly and in good faith." Id. (citing Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65, 74-75 (1991)). Accordingly, a union's breach of the duty of fair representation it owes to its members is closely analogous to the breach of the fiduciary duty claims that arise when fiduciaries abuse their positions of trust in other contexts. As breach of fiduciary duty is the most closely analogous state-law cause of action I will look to the limitations period that governs for this cause of action.FN8
FN8. Defendants contend that the "state general or residual personal injury" limitation period should apply to plaintiffs duty of fair representation claims at it does under § 101(a)(2) of the LMRDA. Reed v. United Transp. Union, 488 U.S. 319, 334 (1989). However, the Court's rationale in Reed, that § 101(a)(2) was "modeled on the First Amendment to our Constitution" and that claims arising under it were analogous to § 1983 claim, does not apply to plaintiff's duty of fair representation claims, which do not share the same similarity to § 1983 claims.
Having identified the most analogous state cause of action I must next determine whether Pennsylvania or New Jersey law applies. This determination has import because Pennsylvania has a two years limitations period for breach of fiduciary duty claims, Maillie v. Greater Delaware Valley Health Care, Inc., 628 A.2d 528, 532 (Pa.Commw.Ct. 1993) while New Jersey has a six-year limitations period. Brown v. College of Medicine and Dentistry, 401 A.2d 288, 290 (N.J.Super. Ct. Law Div. 1979). In choosing which state's law to apply I must look to the choice-of-law rules of the forum state.FN9 Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988). Pennsylvania choice-of-law analysis is fact-intensive. See LeJeune v. Bliss-Salem, Inc., 85 F.3d 1069 (3d Cir. 1996); Lacy v. Cassna Aircraft Co., 932 F.2d 170 (3d Cir. 1991) (weighing such factors as number and quality of contacts with each forum and place of injury). Such a fact-intensive inquiry is improper at this preliminary stage of the litigation. I will allow discovery on this issue.
FN9. Plaintiff argues that even if Pennsylvania's two-year statute of limitations applied, his claim would still not be time-barred because the NLRB proceedings tolled the statute. His argument has been uniformly rejected. See Katsartos v. Transit-Mix Concrete Corp., 615 F.Supp. 450, 453 (S.D.N.Y. 1985); Bey v. Williams, 590 F.Supp 1150, 1154 (W.D.Pa. 1984) (rejecting argument that tolling is necessary to avoid concurrent proceedings in two fora).
V. Labor-Management Reporting and Disclosure Act
*4 Counts IV and VI of plaintiff's complaint allege that defendants' arbitrary and discriminatory actions violated § 101(a)(1), (2) and (5) and §§ 102 and 609 of the LMRDA. Defendants, citing Reed, contend that these claims are barred by the two-year personal injury statute of limitations which at oral argument plaintiff conceded was applicable.FN10
FN10. Both Pennsylvania and New Jersey have a two-year personal injury statute of limitations.
Plaintiff contends, however, that because defendants' duties were not extinguished when plaintiff was expelled from the Union, the two-year period has not run. His argument is unavailing. A cause of action under the LMRDA arises not from defendants' duties, but rather from actions that violate these duties or plaintiff's rights; defendants' duties do not in themselves give rise to the cause of action. Plaintiff does not allege any acts by defendants after March 31, 1994 which would give rise to a cause of action under the LMRDA. Thus, Counts IV and VI must be dismissed as time-barred.
VI. Breach of the Collective Bargaining Agreement
Plaintiff alleges that defendants intentionally breached their contractual obligations under the SMCA Agreements causing plaintiff, a third-party beneficiary of these obligations, to suffer compensable harm. This claim is different from a breach of the duty of fair representation because breach of contract causes of action have longer limitations periods in both New Jersey and Pennsylvania.
A labor union may assume contractual duties to its members beyond the duty of fair representation even if only the union and the employer are parties to the contract. United Steel Workers of America v. Rawson, 495 U.S. 362, 372 (1990). To enforce such duties, however, the union member "must be able to point to language in the collective-bargaining agreement specifically indicating an intent to create obligations enforceable against the union by individual employees." Id. at 374 (citing Republic Steel Corp. v. Maddox, 379 U.S. 650, 653 (1965)). Plaintiff has cited no such language in the SMCA Agreement which could give rise to duties to the members beyond the duty of fair representation.
Plaintiff argues that Rawson is inapposite to his breach of contract claim because it arose in the personal injury context and analyzed whether a union was liable to the survivors of miners killed in an underground fire for negligently conducting safety inspections. See Rawson, 495 U.S. at 364. I find the rationale underlying Rawson applicable despite the different nature of the duties sought to be enforced. In Rawson the collective-bargaining agreement obligated the union to perform certain safety inspections but did not provide members a remedy if the Union did so negligently. Id. Here, the collective-bargaining agreement prescribed certain hiring hall procedures but provided members no remedy if the union did not comply. Therefore, as in Rawson the collective-bargaining agreement does not afford plaintiff a remedy and his breach of contract claims must be dismissed.
VII. Breach of the Union Constitution
*5 Count VII alleges that defendants caused him compensable injury by breaching their duties under the Union's constitution. Defendants contend that plaintiff's failure to exhaust internal union remedies available under the Union constitution bars recovery while plaintiff argues that exhaustion of internal remedies should be excused because it is futile. Plaintiff sufficiently alleges futility and thus defendants' motion to dismiss this claim must denied.FN11
FN11. Defendants did not argue that preemption or statute of limitations barred this claim.
VIII. Intentional Interference with Contract and Common Law Breach of Fiduciary Duty
Count VIII alleges that defendants intentionally interfered with the performance of the SMCA Agreements, with the Union constitution, and with plaintiff's rights thereunder. Count X alleges that defendants Kelly and Willey breached their fiduciary duties to plaintiff through the discriminatory job referral process. Defendants contend that the NLRA and the LMRA preempt these state law claims.
State law claims are "presumptively preempted by the NLRA when they concern conduct that is actually or even arguably either protected or prohibited by the NLRA." Pennsylvania Nurses Ass'n v. Pennsylvania State Education Ass'n, 90 F.3d 797, 801 (3d Cir. 1996) (citing Belknap, Inc. v. Hale, 463 U.S. 491, 498 (1983)). The retaliatory discrimination against plaintiff in the job referral process alleged in Counts VIII and X is arguably prohibited by the NLRA. Moreover, an Administrative Law Judge determined that the Union "restrained and coerced [plaintiff] in the exercise of rights guaranteed in Section 7 of the Act in violation of Section 8(b)(1)(A) of the Act and have been attempting to cause employers to discriminate against [plaintiff] in violation of Section 8(a)(3) of the Act in violation of Section 8(b)(2) of the Act." Given this decision which was affirmed by the National Labor Relations Board, I find that the conduct alleged is prohibited by the NLRA.FN12
FN12. Plaintiff argues that Pygatt v. Painter's Local No. 277, 763 F.Supp. 1301 (D.N.J. 1991) instructs that his claims are not preempted. In Pygatt a union member alleged that a union official encouraged other members to harass and intimidate him on the job site to the extent that he lost sleep and was unable to perform his job adequately. Id. at 1312. The Court held that this allegation, which stated a claim for malicious interference with employment rights under New Jersey law, was peripheral to the concerns of the NLRA and therefore was not preempted. Id. at 1312-13. The Court reasoned that the claim was not arguably prohibited or protected by the NLRA and alleged something different from hiring hall discrimination. Id. at 1312. Here, however, the claim is essentially one of hiring hall discrimination prohibited by the NLRA as determined by the Administrative Law Judge. Therefore, Pygatt is inapposite and does not mandate denial of defendants' motion to dismiss.
The Supreme Court has, however, recognized two circumstances in which state law is not preempted even if the conduct is prohibited by the NLRA. Pennsylvania Nurses, 90 F.3d at 803. The first is where the conduct is only of peripheral concern to the NLRA. See Local 923, Int'l Union of Operating Eng'rs v. Jones. 460 U.S. 669, 676 (1983) (citing San Diego Building Trades Council v. Garmon, 359 U.S. 236, 243-44 (1959)). The conduct here is not peripheral to the NLRA but rather involves violations of rights explicitly guaranteed in the Act and discriminatory behavior inimical to the Act's purpose.
The second exception to presumptive preemption is where the alleged conduct "touches on interests . . . deeply rooted in local feeling and responsibility." Jones, 460 U.S. at 676 (citing Garmon, 359 U.S. at 243-44). Although this exception was once confined to conduct "traditionally recognized to be the subject of local regulation, most often involving threats to public order such as violence, threats of violence, intimidation and destruction of property," it now extends to include "acts of trespass, and certain personal torts, such as intentional infliction of emotional distress and malicious libel." Pennsylvania Nurses, 90 F.3d at 803 (citations omitted).
*6 Plaintiff's state-law claims of intentional interference with contract and breach of the fiduciary duty do not fall into this category of claims that touch interests deeply rooted in local feeling or responsibility. His claims involve the interpretation of the hiring hall procedures and an internal dispute between a member and union officials. These claims directly implicate the issues the NLRA was designed to address. Thus, the claims are the particular concern of the NLRA and do not touch interests deeply rooted in local feeling or responsibility.FN13
FN13. Plaintiff contends that O'Rourke v. Crosley, 847 F. Supp 1208 (D.N.J. 1994), rejected defendants' preemption argument. However, O'Rourke analyzed whether the NLRA preempted a federal common law breach of the duty of fair representation claim. See Breininger v. Sheet Metal Workers Int'l Ass'n Local Union No. 6, 493 U.S. 67 (1989). O'Rourke thus does not control preemption of state common law claims.
Moreover, even if the alleged conduct touched deeply rooted local feeling or responsibility, such concerns must be balanced "against the risk that the exercise of state jurisdiction over the tort claim would interfere with the regulatory jurisdiction of the NLRB." Id. at 804. In Pennsylvania Nurses, the Court of Appeals held that where the NLRB's factual inquiry would substantially overlap the issues surrounding the state-law claim the risk of conflicting rulings would "threaten[] state interference with the NLRB's enforcement of national labor relations policy." Id. In the instant case, the state-law claims would require a factual inquiry that would overlap the NLRB's inquiry leading to the same risks of inconsistent rulings and interference with NLRB's enforcement. Both inquiries would focus on whether defendants' conduct in referring plaintiff to jobs in accordance with his position on the OWL and the hiring hall procedures, the scope of their duties toward plaintiff, and their mental culpability. Therefore, even if plaintiff's state-law claims touched deeply rooted local feeling or responsibility, the NLRA would nonetheless preempt them.
ORDER
AND NOW this — day of October, 1996, upon consideration defendants' motion to dismiss and the parties' filings related thereto it is hereby ORDERED that 1. Defendants' motion is DENIED as to plaintiffs duty-of-fair-representation claims against the Union without prejudice to renewal with thirty (30) days of the conclusion of discovery on the choice-of-law issue. The parties shall have sixty (60) days from the date of this Order to complete discovery on the choice-of-law issue;
2. Defendants' motion is GRANTED as to plaintiffs duty of fair representation claims against defendants Kelly and Willey in their individual capacities;
3. Defendant's motion is GRANTED as to plaintiffs claims under the National Labor Relations Act;
4. Defendants' motion is GRANTED as to plaintiffs claims under §§ 101, 102 and 609 of the Labor-Management Reporting and Disclosure Act;
5. Defendants' motion is GRANTED as to plaintiff's claims of breach of the collective-bargaining agreement;
6. Defendants' motion is DENIED as to plaintiffs claims of breach of the union constitution;
7. Defendants' motion is GRANTED as to plaintiff's state law claims of intentional interference with contract and common law breach of fiduciary duty; and
*7 8. Judgment is RESERVED as to plaintiff's application to proceed under § 501 of Labor-Management Reporting and Disclosure Act and defendants' motion to dismiss the § 501 claim.