# Petition for Writ of Certiorari — Eidal International Corp. v. Garcia > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_0376%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1987 - **Citation:** 484 U.S. 827 ## Text IN THE Supreme Court of the Gnited States October Term, 1986 EIDAL INTERNATIONAL CORPORATION, - PETITIONER V. RICHARD GARCIA, ET AL., RESPONDENTS PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT Joseph L. Werntz MOSES, DUNN, BECKLEY, ESPINOSA & TUTHILL, P.C. 612 First Street, N.W. P.O. Box 27047 Albuquerque, New Mexico 87125-7047 Telephone: (505) 843-9440 Attorneys for Petitioner QUESTIONS PRESENTED 1. Whether the appellate court decision in this case is in direct conflict with DelCostello v. International Brother- hood of Teamsters, 462 U.S. 151 (1983). 2. Whether the appellate court erred in not applying the six month statute of limitations adopted in DelCostello to this case. 3. Whether the labor law policies that persuaded the Court in DelCostello to adopt a six month statute of limita- tions apply where the employer has allegedly repudiated the collective bargaining agreement. 4. Whether the appellate court decision undermines the strong preference of Congress and this Court for contract grievance procedures as the preferred method for settling labor disputes by declining to apply DelCostello. 5. Whether the appellate court decision below is in con- flict with other circuit court decisions such as McCreedy v. UAW Local No. 971, 809 F.2d 1232 (6th Cir. 1987), Lacina v. G-K Trucking, 802 F.2d 1190 (9th Cir. 1986) and Farr v. H.K. Porter, 727 F.2d 502 5th Cir. 1984) which have applied DelCostello without hesitation to §301 claims brought by indi- vidual employees against the employer over a plant closing. LIST OF PARTIES Plaintiffs: Richard Garcia, Epifanio Velazquez, Robert Lee Aragon, Manuel Rito Chavez, Gregory Archibeque, J.W. Hamilton, Francis J. Bohensky, Dennis Earl Barela, Robert Gutierrez, Leroy Daniel Zamora, Richard Jaramillo, Mayo K. Ulibarri, Rudolph Saiz, Adelicio G. Herrera, Ivan Aragon, Richard D. McGuire, Carlos Benavidez, Ernest Trujillo, Miguel Delgado, Frank Sanchez, Alex Madrid, Delbert Davenport, Joe Lopez, Michael Bock, Kenneth Griego, Harvey West, Linda Poteet Minteer, John G. Rael, Herman Chavez, Robert Chavez, David Trujillo, Orlando Quintana, William H. Harrah, Christopher Garcia, Benjamin Aragon, Joseph N. Lepeska, Trinidad Barela, Sam Blea, Jimmy Reid, Thomas Wilson, Jr. and Steve Melton. Defendants: Eidal International Corporation; Jencor International Corporation; International Brotherhood of Boil- ermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, Local Lodge No. 338; and International Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers and Helpers, AFL-CIO. ~ TABLE OF CONTENTS Page QUESTIONS PRESENTED ....................5. ss cua c sc hedieesaniasees il gg 8s rar iii TABLE OF AUTHORITIES ...................... iv gy deck ee vd Gece ed vaseuses 1 ee i ec cp tn ech envsveswaeees l oe gies A) | 1 oS gd 6 ) 2 EN Caen Og 4 Point I - The Appellate Court Improperly Characterized the Complaint and Thereby is in Direct Conflict with DelCostello ............ 5 A. The Appellate Court Erroneously Equated a Breach of Contract Claim With a Contract Repudiation. .............. 8 B. An Allegation of a Sham Transaction Reinforces the Applicability of ae 12 Point II - The Appellate Decision Overturns Federal Labor Law Policies Reaffirmed in Se fra ek ea Ww miu ce hk 8s 14 CONCLUSION APPENDIX - ill - TABLE OF AUTHORITIES CASES: Pages DelCostello v. International Brotherhood of Teamsters, f PU NU. gv ccs owssncaceeawes i, 4-7, 10-19 Farr v. H.K. Porter, pee Le | re i, 17 Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 570-571 (1976). .................. 6, 13 International Union, United Automobile Aerospace and Agricultural Implement Workers of America (UAW), AFL-CIO v. Hoosier Cardinal Corporation, 383 U.S. 696 ne aire Ge As ee hd ee a 14, 16-19 Lacina v. G-K Trucking, OU Fe RE ee es FD. hn ka cece ecenes i, 17 McCreedy v. UAW Local No. 971, S00 F 2a imme Cte Cir. 1967). ... 2... wwe. i, 16 Republic Steel v. Maddox, ee a nade esas 11, 12 Steelworkers v. Warrier and Gulf Navigation Company, 363 U.S. 574 (1960). ........ 14 United Parcel Service v. Mitchell, A cca ne nig se cha debe Gee's 5, 6, 14, 16 Vaca v. Sipes RROD, iv vss 4 oe a os dn 0d.d wed ae ke See 13 STATUTES: Ne Fs ahs oan deed REE e ESO 1 I 6 ga kd ay a We bee eee 2 29 U.S.C. §160(b) (§$10(b) National Labor I coo a ee 1, 4-7, 14, 17, 19 29 U.S.C. §173(d) (§203(d) Labor Management I 582g pee Re ae ht as ig 6 ie 15, 16 29 U.S.C. §185 ($301 Labor Management Ps tyro 1, 2, 5, 6, 18, 14, 19 IN THE Supreme Court of the Gnited States October Term, 1986 NO. EIDAL INTERNATIONAL CORPORATION, Petitioner, v. RICHARD GARCIA, et al., Respondents. PETITION FOR WRIT OF CERTIORARI OPINION BELOW The opinion of the Tenth Circuit Court of Appeals is reported at 808 F.2d 717 (10th Cir. 1986). JURISDICTION The judgment of the court of appeals was entered on December 30, 1986. A timely petition for rehearing was filed by petitioner on January 13, 1987. An order denying the petition for rehearing was entered on March 12, 1987. The jurisdiction of this Court rests upon 28 U.S.C. §1254(1). STATUTES INVOLVED This case involves §301 of the Labor Management Relations Act, 29 U.S.C. §185, and §10(b) of the National Labor Relations Act, 29 U.S.C. §160(b). The statutes are reproduced in the appendix. . STATEMENT OF CASE 1. Plaintiffs are former employees of petitioner Eidal International Corporation (“Eidal”). Plaintiffs brought suit in federal district court against Eidal and Jencor Interna- tional Corporation (“Jencor”) for breach of contract and against the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, Local Lodge No. 338 and International Brotherhood of Boil- ermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, (“thé union”) for breach of its duty of fair representation. The suit was filed on January 31, 1984. Jurisdiction was based on §301 of the Labor Management Relations Act, 29 U.S.C. §185, and 28 U.S.C. §1337. Plain- tiffs filed an amended complaint on February 16, 1984, add- ing five new plaintiffs. 2. Eidal and the union’s local lodge were signatories to a collective bargaining agreement entered into on August 2, 1981. (Appendix ex. 7; exhibit A to the complaint). Eidal manufactured heavy duty trailers in Albuquerque, New Mex- ico. In July 1982 it closed its manufacturing operation and transferred it to Jencor. All employees were terminated. Plaintiffs’ complaint against Eidal, Jencor and the union arises under the bargaining agreement and concerns their termination. 3. Under the collective bargaining agreement Eidal reserved the right to relocate or close the business unit pro- vided notice and an opportunity for discussion was given to the local lodge (Appendix ex. 7; Article 2, Section 2.1(d) of Exhibit A). 4. After negotiations with union representatives, Eidal notified all of its employees in a letter dated July 22, 1982 that it was closing its Albuquerque, New Mexico plant. (Appendix ex. 7; Exhibit B to the complaint). Eidal termi- . ? nated all employees and transferred its manufacturing oper- ations to Jencor. Eidal advised the employees in the letter that it had arranged to provide the union with a sum of money to be distributed on the basis of seniority and to continue insurance benefits for thirty days. 5. Adelicio Herrera, one of the plaintiffs, filed unfair labor practice charges against Jencor and the union shortly after his termination. In his charge against the union (Case No. 28-CB-2025) plaintiff Herrera claimed the union entered into an illegal agreement with Jencor on or about July 17, 1982 because the employer had no employees in the bargain- ing unit. (Appendix ex. 8). In his charge against Jencor (Case No. 28-CA-7103) plaintiff Herrera claimed Jencor entered into an illegal agreement with the union and that Jencor dis- criminatorily failed and refused to hire him because of his union activities. (Appendix ex. 9). Both claims were predi- cated on allegations that the arrangement between Eidal and Jencor was a sham. The agreement between Jencor and the union was nullified in settlement agreements signed by Herrera, the union and Jencor (Appendix exs. 10 and 11), but the National Labor Relations Board found no merit in the other claims of plaintiff Herrera. (Appendix exs. 12 and 13). 6. Eighteen (18) months after their grievance arose, Plaintiffs filed suit. Plaintiffs alleged in the complaint that their termination by Eidal was a breach of the collective bar- gaining agreement. Plaintiffs further alleged that Jencor was either an alter ego of Eidal or a successor which was bound by the collective bargaining agreement. Plaintiffs also alleged that their discharge was wrongful. 7. Plaintiffs allege that the union condoned, acquiesced and conspired in Eidal’s breach of the collective bargaining agreement and breached its duty of fair representation by failing to challenge the propriety of Eidal’s actions, to keep its its members informed about those actions, to bargain in good faith with Eidal and by entering into an illegal pre-hire con- tract with Jencor. 8. Eidal and Jencor filed timely motions to dismiss in the district court action. They argued that plaintiffs’ com- plaint was time-barred under the six month statute of limi- tations adopted in DelCostello. The union timely answered the complaint and later filed a motion to dismiss the com- plaint as time-barred under DelCostello. 9. The district court issued a memorandum opinion and entered an order on September 4, 1984 granting the three motions to dismiss. The district court held that 29 U.S.C. §160(b) and DelCostello barred plaintiffs’ complaint. The dis- trict court declined to exercise jurisdiction over the remain- ing pendent state claims. 10. Plaintiffs filed a timely notice of appeal. The court of appeals entered its decision on December 36, 1986 which reversed the district court decision and remanded the case for further proceedings. The court of appeals concluded that the holding of DelCostello aid not extend to cases in which an employer has repudiate.l all of its obligations under a bar gaining agreement, including the duty to arbitrate. ARGUMENT The characterization of the present case by the court _of appeals is antithetical to the decision issued by this Court in DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151 (1983). The appellate court improperly equat- ed a breach of contract claim with contract repudiation. Their decision, if left intact, effectively overrules DelCostello. The appellate decision ignores the long standing feder- al labor law goal of rapid resolution of disputes within the = collective bargaining framework. Instead, the decision ex- tends the limbo period in which labor disputes remain unre- — solved and undermines the contractual grievance process favored by Congress and the courts. The final result is to prolong the very litigation which DelCostello brought with- in the six months limitation period of §10(b) of National Labor Relations Act, 29 U.S.C. §160(b). Petitioner Eidal requests that the Court accept this petition and clearly define the parameters of DelCostello when litigation is initiated by employees against their employer and union. POINT I THE APPELLATE COURT IMPROPERLY CHARACTERIZED THE COMPLAINT AND THEREBY IS IN DIRECT CONFLICT WITH DELCOSTELLO. In DelCostello, the Court was called upon to determine what statute of limitations should apply to actions brought under §301 of the Labor Management Relations Act, 29 U.S.C. §185, where an employee sues his employer for a breach of the collective bargaining agreement and also his union for breaching its duty of fair representation by mis- handling his grievance. The Court held that the six months limitations period of §10(b) of the National Labor Relations Act was the applicable statute of limitations governing the suit, both against the employer and the union. In analyzing the cases, the Court found that the indis- pensable predicate for an employee §301 claim against the employer was proof that the union had breached its duty of fair representation. Often referred to as a hybrid action, Jus- tice Stewart in United Parcel Service v. Mitchell, 451 U.S. 56 (1981) defined the nature of such an action: “To prevail against either the company or the union. . . [employee- athe plaintiffs] must not only show that their discharge was con- trary to the contract, but must also carry the burden of demonstrating breach of duty by the union.” Mitchell, 451 U.S. at 67, quoting Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 570-571 (1976). No case before DelCostello had provided the Court with a suitable guide fromy. ~*~ borrow a statute of limitations. The Court recogni7z~ ~ ==: aims raised in DelCostello amounted to a direct cuauenge to the private settlement of disputes under the bargaining agreement. DelCostello, 462 U.S. at 165. The Court also perceived that competing inter- ests were at stake; namely a national interest in stable bar- gaining relationships and finality of private settlements, and an employee’s interest in challenging wrongful conduct on — the part of his employer and union. Jd. at 171. To accom- modate a balancing of these interests in the context of §301/ fair representation litigation, the Court settled on the six months limitations period of §10(b). In the present case, the court of appeals refused to char- a:terize the action as a hybrid, despite the presence of claims by individual employees against both the employer for breach of the collective bargaining agreement and against the union for breach of its duty of fair representation. Instead, the appellate court found the case more analogous to a straight- forward breach of contract action. It declined to apply the DelCostello six month limitations period, opting instead to apply an appropriate state statute of limitations period. The appellate court reversed the district court’s order granting defendants’ motions to dismiss and remanded the case for further proceedings. _ The appellate court’s decision is based on the distinc- tion that Eidal repudiated the entire bargaining agreement, including its duty to arbitrate. (Appendix ex. 1 at pages 2a and 7a). The appellate court reasoned that an employer’s total repudiation of a bargaining agreement is a unilateral act > which does not require proof that the union has also breached its duty of fair representation. Initially, it should be noted that the complaint did not allege that Eidal repudiated the contract: Rather, the com- plaint states that the plant closing, plaintiffs’ termination, and the transfer of manufacturing operations was a breach of contract by Eidal and that the union condoned, acquiesced and conspired in the breach. The complaint, moreover, does not allege that Eidal refused to participate in the contrac- tually allowed grievance procedures under the bargaining agreement or that plaintiffs tried to invoke the contractual grievance procedures. In every count of the complaint, except for that which alleges that the union breached its duty of fair répresentation, both the employer and the union are sought to be held responsible for plaintiffs’ terminations. On this basis alone, the appellate court was remiss in not affirming the district court which had held that the com- plaint was time-barred under DelCostello and §10(b). The court of appeals relied on two allegations in the com- plaint to support its finding that repudiation was well pled (Appendix ex. 1 at pages 8a and 9a). The appellate court first pointed to the July 1982 letter attached to the complaint as Exhibit B which announced to all employees that Eidal was closing its plant and transferring its manufacturing opera- tions. The court of appeals inferred from this letter that Eidal effectively was announcing an end to contractual relations. The court apparently concluded that the letter could support an inference of repudiation. The second allegation cited by the appellate court was that the transfer of Eidal’s manufacturing operations to Jencor was a sham and that the two companies were actu- ally the same employer. In the appellate court’s view this allegation, combined with the inference drawn from the July 1982 letter, described with sufficient particularity a sham transaction that constitutes a repudiation. . ¥. A. THE APPELLATE COURT ERRONEOUSLY EQUATED A BREACH OF CONTRACT CLAIM WITH CONTRACT REPUDIATION. The bargaining agreement gave Eidal the express right to close the plant, free from a duty to submit its decision to arbitration. The signatories to the bargaining agreement, Eidal and the local union lodge, agreed that Eidal retained the right during the term of the agreement to unilaterally make a decision to close its plant. Section 2.1 of the agree- ment provided: ' 2.1 It is mutually recognized and agreed by the compa- ny and the union that, except as abridged, delegated, granted or modified specifically by this Agreement or any supplementary agreements that may be hereinaf- ter made, all of the rights, powers, and authority the company had prior to the signing of this or any preced- ing agreement are retained by the company, and remain exclusively and without limitation with the rights of management. The union recognizes that the company has and retains the exclusive right to manage its busi- ness and all its actions and concerns except as express- ly limited in this Agreement. The exercise of these rights, powers and authority retained by the company are not subject to the grievance procedure except as hereinafter specifically provided or as might be express- ly limited by some specific provision elsewhere in this Agreement. Without limiting the generality and purpose of the fore- going provision, this includes but is not limited to: * * * (d) The location of the business, including the estab- lishment of new business units, and the relocation or closing of the present business unit, provided that notice is first given and opportunity for discussion is provided to the union upon proposal to relocate or close the pres- ent operations. < (Appendix ex. 7; Article II, Section 2.1 of Exhibit A). Eidal had the authority under the bargaining agreement to close the plant, but it was required to give notice and an oppor- tunity for discussion to the union about the proposal to close the plant. The July 1982 letter alone cannot serve as an inference of repudiation for three reasons. First, Eidal had the right under the bargaining agreement to close its plant. The deci- sion to close and its implementation was contractually per- mitted. Eidal was required though to give notice to the union. Section 2.1(d) of the bargaining agreement directed Eidal to give notice only to the union. Plaintiffs can only complain that the union did not have notice or a chance for discus- sion. Eidal had no duty to give every employee notice and an opportunity for discussion. Any failure on the part of Eidal to give notice to every employee does not state a claim for breach of the bargaining agreement or, more specifically, allege a repudiation of the bargaining agreement. Second, the complaint does not allege that the union was unaware of Eidal’s decison to close the plant or that the union did not have an opportunity for discussion on the decision to close the plant. To the contrary, in their claim against the union, the plaintiffs alleged that the union breached its duty of fair representation 1) by failing to bargain in good faith with Eidal regarding the sale of the bargaining unit functions to Jencor; 2) by failing to vigorously assert and protect the rights of the employees in connection with the sale; and 3) by conspiring with Eidal and Jencor to cause Plaintiffs to lose their employment. (Appendix ex. 7; Count II, paragraph 5 (a, b, i)). Plaintiffs also akeged in the com- plaint that the layoffs leading up to the July 22, 1982 letter and their terminations were part of a preconceived scheme in which the union condoned, acquiesced and conspired. (Appendix ex. 7; Count Ili, paragraph 3; Count IV, para- graph 2). - - Furthermore, Plaintiffs alleged in their complaint that the union had signed an illegal pre-hire agreement with Jencor that the National Labor Relations Board later nulli- fied. (Appendix ex. 7; Count II, paragraph 5(h)). The date of the alleged illegal agreement preceded Eidal’s July 22, 1982 termination letter. (Appendix exs. 8-11). Plaintiffs by their own complaint have alleged that the union knew of the closing, conceded to it and was trying to bind the next em- ployer to a new collective bargaining agreement. The third and perhaps most important reason why the July 1982 letter does not support an inference of repudia- tion is that a breach of a contract claim is not the same as a repudiation of the contract. Eidal by exercising a right it had under the bargaining agreement cannot be deemed to have repudiated the agreement. At best plaintiffs can only complain that Eidal exercised its contractual right to close the plant improperly by not giving the union notice and a chance for discussion. It is unreasonable to conclude, as the appellate court did, that by closing the plant pursuant to its contractual right Eidal also repudiated the agreement. Otherwise, DelCostello would never apply to a plant closing where an allegation of repudiation is made. The July 1982 letter explains the arrangement that Eidal had made with the union to distribute a sum of money to all employees with tenure of more than three years and to continue insurance benefits for the next thirty days. The pay- ment of money through the union and continuation of insur- ance benefits are inconsistent with an inference of repudiation. The reasonable inference drawn from those statements in the letter is that discussions had taken place between Eidal and the union. Plaintiffs purposely and necessarily linked their claim against Eidal to their claim against the union. Eidal was not -10- a obligated under the bargaining agreement to give each indi- vidual employee notice and an opportunity for discussion regarding the decision to close the plant. Eidal was only obli- gated to inform the union. The complaint alleges and record reflects that the union knew about the decision to close the plant. The claim pled against Eidal necessarily depends upon proof concerning the nature of the union’s discharge of its duty of representation. Under DelCostello, Plaintiffs had six months to bring suit and failed to do so. The district court reviewed the com- plaint and could not draw any reasonable inferences which would defeat the motions to dismiss. It properly ruled that the six months limitations period of DelCostello applied and dismissed Plaintiffs’ complaint as time-barred. The appellate court struggled to avoid this result. It excused the union complicity alleged by plaintiffs as an expla- nation why plaintiffs sued individually. That reasoning does not explain why DelCostello is inapplicable. At best union complicity excused plaintiffs from resort- ing to the contractual grievance process. Any other expla- nation ignores the relationship between the union and its members. Members must afford the union the opportunity to act on their behalf. Repwhblic Steel v. Maddox, 379 U.S. 650 (1965). In the present case the bargaining agreement appointed the union as plaintiffs’ representative and estab- lished a uniform and exclusive method for orderly settle- ment of grievances. Plaintiffs were obligated to follow the contractual grievance process, but filed a lawsuit instead. The appellate court’s refusal to characterize the pres- ent case as a hybrid action is unsound. It is a characteriza- tion that serves only to avoid the strictures of DelCostello and substantially extend the time within which to resolve 7. disputes in derogation of a long standing labor policy to the contrary. B. AN ALLEGATION OF A SHAM TRANSACTION REINFORCES THE APPLICABILITY OF DELCOSTELLO. The appellate court was particularly intrigued with the notion of a sham transaction. (Appendix ex. 1 at page 7a). Plaintiffs alleged in their complaint that Eidal and Jencor were alter egos and in essence the same employer. There- fore, Jencor remained bound by the bargaining agreement. (Appendix ex 7; Count I, paragraph 7). Alternatively, plain- tiffs allege Jencor was a successor to Eidal and bound by the bargaining agreement. (Appendix ex. 7; Count II, para- graph 9). Eidal does not concede that either allegation is true, but will assume they are for purposes of this argument. Plaintiffs’ contention under either scenario is that Eidal (now called Jencor) remained subject to the collective bar- gaining agreement and that their termination, loss of bene- fits, and failure to be rehired was in breach of the bargaining agreement. (Appendix ex 7; Count I, paragraph 8). In plain- tiffs’ eyes, the transaction between Ejidal and Jencor was a sham that was designed to reduce overhead at the expense of plaintiffs. (Appendix ex 7; Count I, paragraph 6). Even if the allegations of sham transaction constitute a breach of contract and a repudiation, it is not a reason to avoid DelCostello. Under either the alter ego or successor scenario, plaintiffs were still required to afford the union the opportunity to act on their behalf and to attempt to sub- mit their dispute to the grievance and arbitration procedure in the bargaining agreement. Republic Steel v. Maddox, 379 U.S. 650 (1965). As pointed out earlier, plaintiffs do not allege that they tried to invoke the grievance procedures or that Eidal (now called Jencor) refused to grieve. Instead, plain- x tiffs contend that the union either failed to press or only perfunctorily pressed their claims, and attempted to enter into a new bargaining agreement with Jencor. (Appendix ex 7; Count II, paragraph 5). In Vaca v. Sipes, 386 U.S. 171 (1967) the Court found that conduct of an employer which amounts to a repudia- tion of exclusive contractual remedies allows employees to seek judicial review without pursuing the contractual pro- cedures. Jd. at 185. Likewise, an employee may seek judi- cial review directly if the union wrongfully refuses to process the grievance or improperly processes a grievance. Id.; Hines v. Anchor Motor Freight, Inc. 424 U.S. 554 (1976). At best the allegations of the complaint in the present case excused plaintiffs from exhausting the exclusive contractual griev- ance and arbitration remedies, and permitted them to seek judicial enforcement of their contractual rights. Under either plaintiffs’ alter ego or successor scenar- io, an established and continuing relationship between man- agement and labor was still present. The union continued to represent those employees still working for Eidal (now Jencor) under the bargaining agreement. The notion of repu- diation in the present case does not destroy the balancing of interests at stake among the parties; that is, EKidal’s and the union’s interest in a uniform, final and rapid resolution of the dispute versus the fair opportunity for plaintiffs to vindicate their rights under §301 and the fair representa- tion doctrines. The allegations of a sham transaction as pled do not excuse plaintiffs from the six month limitations period of DelCostello, but rather reinforce the characterization of this action as a hybrid within the parameters of DelCostello. This is the point which the appellate court misapprehended and which has turned the holding of DelCostello on its head. Eidal respectfully requests the Court to accept this Petition and set straight the conflict created by the appellate court decision. - 13 - POINT II THE APPELLATE DECISION OVERTURNS FEDERAL LABOR LAW POLICIES REAFFIRMED IN DELCOSTELLO. The rapid resolution of labor disputes has long been a leading federal policy in the area of labor law. The policy is most clearly stated in Section 10(b) of the National Labor Relations Act, where Congress has adopted a six month limi- tations period for unfair labor practice proceedings. The poli- cy promotes the national interests in stable bargaining relationships and finality of private settlements. It also underseores the importance attributed to the private griev- ance procedures under a collective bargaining agreement which are at the very heart of the system of industrial self- government. Steelworkers v. Warrier and Gulf Navigation Company, 363 U.S. 574 (1960). The grievance procedures in a bargaining agreement are designed to avoid disintegration of the relationship between an employer and union by establishing an orderly means of handling disputes which arise in the workplace. Not only are the procedures important, but so is the time it takes to invoke the procedures and complete the process. Congress and this Court have recognized that it is critical that disputes be resolved expeditiously and not left suspend- ed in limbo for long periods. 29 U.S.C. §160(b); United Par- cel Service, Inc. v. Mitchell, 451 U.S. 56 (1981). The policy of rapid dispute resolution is not restricted to §10(b) proceedings. It extends to §301 actions as well. E.g., DelCostello, supra; Mitchell, supra; International Union, United Automobile Aerospace and Agricultural Implement Workers of America (UAW), AFL-CIO v. Hoosier Cardi- nal Corporation, 383 U.S. 696 (1966). Congress has express- ly approved contract grievance procedures as a preferred ~M. method for settling dneuten. §203(d) Labor ~epeananete Relations Act, 29 U.S.C. §1738(d). The appellate decision in the present case is inconsis- tent with the goals of speed and finality in the resolution of labor disputes. In its decision the court of appeals limited these goals to situations where there is a continuing working relationship between management and labor (Appendix ex. 1 at pages 9a and 10a). It decided the goals did not apply where an employer repudiates the contract and closes his busi- ness. Id. As discussed in Point I, supra, the soundness of the ap- pellate court’s conclusion that an allegation of repudiation was properly raised is highly suspect. Its reasoning that a well pled allegation of contract repudiation makes DelCostello in- apposite is equally suspect. Moreover, the allegations of the complaint repeatedly state that a continuing working rela- tionship remained between Ejidal (now Jencor) and the union. Assuming that plaintiffs stated a claim of contract repu- diation and that at Eidal’s instigation there was a total break- down in contractual relations between Ejidal and the union, important questions remain as to whether the federal labor law policies discussed in DelCostello still apply. The practi- calities of labor relations require rapid and final resolutions of disputes for both sides. An employer needs to know that he can make a business decision under a bargaining agree- ment to relocate or close a plant and not be subject to liti- gation years later on grounds that the decision was a “de facto” repudiation of the contract. The union and its employ- ees also have an interest in seeking immediate redress from a relocation or closing which is deemed to be in violation of the bargaining agreement. If there is not a prompt resolu- tion of disputes in these circumstances, both the employer and the union remain subject to the vagaries of litigation -15- from disgruntled employees who object to the way they were treated as a result of the decision to close. The appellate decision has far reaching consequences because it overturns existing labor policies and goals adopt- ed by Congress and this Court which promote a rapid reso- lution of disputes. 29 U.S.C. §173(d); e.g., DelCostello, Mitchell and Hoosier, supra. The decision is detrimental to employer, employee and union alike, who all have an obvi- ous interest in immediate redress from disputes arising when a plant is closed. These policy factors have been addressed by other cir- cuit courts in a plant closing situation, and the decisions reached are in conflict with the position of the appellate court below. In McCreedy v. UAW Local No. 971, 809 F.2d 1232 (6th Cir. 1987), the employees brought an action claiming that the employer violated the bargaining agreement by not affording them transfer rights when it closed its plant. The employees also sued the union for breach of the duty of fair representation. The Sixth Circuit held that the plaintiffs’ action was untimely under DelCostello in that they knew or should have known, more than six months before filing their action, that the employer was not going to honor cer- tain provisions of the collective bargaining agreement, and that the union was not going to seek arbitration. McCreedy, supra at 1236-37. Furthermore, the McCreedy court specifically found that the employer failed to abide by the grievance proce- dures written into the collective bargaining agreement. McCreedy, supra at 1237. The employer in McCreedy, in so acting, did what the court below in the instant case said Eidal allegedly did — refused to honor the grievance pro- cedure by “repudiating” the contract. Nevertheless, the McCreedy court still required the union to bring its action - 16- against the employer to compel arbitration within the six- month time period established by DelCostello. Similarly, in Lacina v. G-K Trucking, 802 F.2d 1190 (9th Cir. 1986) (decided on the very same day as the instant case), the court of appeals for the Ninth Circuit ruled that the employees knew, or should have known, prior to six months before they filed their action, that no union action regarding the employer’s closure of its facility was forth- coming. Jd. at 1192. Accordingly, the court applied the six- month statute of limitations mandated by DelCostello to bar the plaintiffs’ action. There, as here, the employees were or should be barred by the action or inaction of their union. In Farr v. H.K. Porter Co., 727 F.2d 502 (5th Cir. 1984), the plaintiff-employees claimed that their former employer's closure and subsequent sale of its facilities constituted a breach of the collective bargaining agreement, and that the union’s failure to protect their rights during the events sur- rounding the closure and sale of the plant constituted a breach of the duty of fair representation. Jd. at 502-503. The Court concluded that §10(b)’s six-month statute of lim- itations applied to those plaintiffs’ claims and found that Hoosier was inapplicable. “Unlike the present case, Hoosier did not involve any agreement to submit disputes to arbi- tration, and the suit was brought by the union itself rather than the individual employee.” /d. at p. 505, citing DelCostello 462 U.S. at 162. While the court of appeals in the present case claimed that Porter was inapposite, the fact situations in both cases are strikingly similar. The union here had full knowledge of, and participated intimately in, the proceedings which resulted in Eidal’s decision to close its plant — as is clearly indicated in the complaint. Accordingly, the appellate opin- ion below is at odds with the Porter case. -17- aeteeenannnemi ie From the allegations of the complaint, it is clear that plaintiffs knew, or should have known, on July 22, 1982 or shortly thereafter of their alleged grievance against Eidal and the union. DelCostello recognized the need for an aggrieved employee to have a satisfactory opportunity to vindicate his rights, but shunned a limitations period which prolonged the resolution of disputes. This Court found that the six month limitations period properly balanced these interests. DelCostello adopted a single limitations period of six months for fair representation suits where an employee sues both his employer and his union. Plaintiffs did not file suit until eighteen months after their termination. The need for a quick resolution of grievances raised in lawsuits filed by individual employees against their union and their employer is accentuated when the dispute arises out of a plant closing. It therefore is more appropriate to borrow the six month limitations period adopted in Del- Costello rather than a state statute of limitations as plain- tiffs urge. This Court said in DelCostello that “when a rule from elsewhere in federal law clearly provides a closer anal- ogy than available state statutes, and when the federal pol- icies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking, we have not hesitated to turn away from state law.” DelCostello, 462 U.S. at 172. Plaintiffs have relied heavily on Hoosier, supra. The appellate court was persuaded to apply Hoosier, although the district court held that DelCostello controlled. It must be remembered that in Hoosier it was the union that brought suit against the employer for breach of contract, and not individual employees. There was no claim asserted against the union by individual employees. There also was no agree- ment between the employer and the union to submit dis- putes to arbitration. In the present case, as in DelCostello, individual employ- ees have brought claims against both the employer and the union. The dispute in this case is over a plant closing. There is a bargaining agreement which contains a provision giv- ing the employer the right to close the plant. The agree- ment also contains a grievance procedure for disputes. The grievance procedure was applicable to a dispute over wheth- er the union had notice and input into the decision to close. (Appendix ex. 1 at page 6a). The factual similarities between the present case and DelCostello sufficiently implicate the consensual process that federal labor law is designed to pro- mote and which DelCostello sought to protect. By analogiz- ing this case to Hoosier, the appellate court ran afoul of the national interests in speed and finality in dispute resolution and improperly extended the time to resolve the present dispute. The Supreme Court has consistently taken positions which promote the national labor policy of rapid resolution of disputes. Even in Hoosier the Court eschewed a longer state statute of limitations in favor of a shorter one, in part because of the federal policy favoring the relatively rapid resolution of labor disputes. Hoosier, 383 U.S. at 707. The vitality of Hoosier in cases where employees sue their em- ployer and their union is in serious question. This Court indicated in DelCostello that even if that action were con- sidered as arising solely under §301, the objections to use of state law and the availability of a well-suited limitations peri- od in §10(b) would call for application of the latter rule. DelCostello, 462 U.S. at 158, n. 12. The court of appeals in the present case revitalized Hoosier at the expense of uni- formity, finality and the rapid resolution of labor disputes, which are the underpinnings of DelCostello. The Court should accept this appeal and hear full argument on why the characterization given this case by the appellate court should be reversed. — = CONCLUSION For the foregoing reasons, Petitioner prays for certio- rari to be granted. MOSES, DUNN, BECKLEY, ESPINOSA & TUTHILL, P.C. Joseph L. Werntz Attorneys for Petitioner 612 First Street, N.W. P.O. Box 27047 Albuquerque, New Mexico 87125-7047 Telephone: (505) 843-9440 ¢ - 20 - APPENDIX EXHIBIT 1 PUBLISH UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT RICHARD GARCIA, et al., Plaintiffs-Appellants, V. EIDAL INTERNATIONAL CORPORATION, a foreign corporation; JENCOR INTERNATIONAL CORPORATION, a foreign corporation; and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO, LOCAL LODGE NO. 338, a labor organization, and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO, labor organization, Defendants-Appellees. No. 84-2255 Appeal from the United States District Court for the District of New Mexico (D.C. No. Civ. 84-0142C) Filed December 30, 1986 Douglas G. Voegler of Marchiondo & Berry, P.A., Albuquer- que, New Mexico (H. Richard Blackhurst of Albuquerque, New Mexico, with him on the brief), for Plaintiffs-Appellants. - la- Joseph L. Werntz (Terry D. Farmer with him on the brief) of Moses, Dunn, Beckley, Espinosa & Tuthill, Albuquerque, New Mexico, for Defendant-Appellee Eidal International Corporation. Thomas H. Marshall of Blake & Uhlig P.A., Kansas City, Missouri (Gerlad R. Bloomfield of Kool, Kool, Bloomfield & Hollis, P.A., Albuquerque, New Mexico; and Robert L. Dameron of Blake & Uhlig P.A., Kansas City, Kansas, on the brief), for the Union Defendants-Appellees Before MCKAY, SEYMOUR, and MOORE, Circuit Judges. SEYMOUR, Circuit Judge. A number of former employees of Eidal International Corporation brought suit against Eidal, Jencor Internation- al Corporation, and the International Brotherhood of Boil- ermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers, AFL-CIO, and its affiliate, Local Lodge No. 38 (the union). The district court granted defendants’ motion to dismiss on the ground that the suit was time barred under DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151 (1983). We reverse and remand, concluding that the holding of DelCostello does not extend to cases in which an employer has repudiated all of its obligations under a bargaining agreement, including the duty to arbitrate. I. In considering a motion to dismiss for failure to state a claim, the pleadings should be liberally construed, all well- pleaded factual allegations must be accepted as true, and all reasonable inferences must be drawn in favor of the plaintiff. Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. - 2a - 1984). So construed, the amended complaint in this case alleges the following fi.cts. The terms and conditions of plaintiffs’ employment with Eidal were governed by a collective bargaining agreement between Ejidal and the union. In July 1982, one year after the bargaining agreement was signed and two years before it was to expire, Eidal notified its employees that the busi- ness had been sold to Jencor. A letter from Eidal’s chair- man announced the sale, discharged all of the company’s employees, mentioned certain termination benefits, and referred the workers to Jencor for possible rehiring. Eidal did not transfer the bargaining agreement to Jencor, which installed a new work force on less favorable terms. Only a few former Eidal employees were rehired. Eighteen months after the sale was announced, plain- tiffs filed this action against Eidal, Jencor, and the Union under section 301 of the National Labor Management Rela- tions Act (NLMRA), 29 U S.C. §185 (1982). Plaintiffs con- tended that the sale was a sham, that Jencor was merely Eidal’s alter ego, and that Eidal had repudiated the collec- tive bargaining agreement by acting for the sole purpose of evading its contractual obligations. Plaintiffs further assert- ed that Eidal wrongfully discharged them in connection with the transaction. Plaintiffs also alleged that the union had violated its duty of fair representation because it failed to challenge the propriety of the transaction, failed to inform its members about the sale, and signed a pre-hire agree- ment with Jencor that the National Labor Relations Board (NLRB) later nullified. The complaint charges that Eidal acted unilaterally in severing all relations under the bargain- ing agreement, although it also alleges that the union acqui- esced. Plaintiffs also asserted several violations of state law. The district court granted defendants’ motion to dismiss the action as time barred. The court characterized plaintiffs’ > lawsuit as a hybrid action within the meaning of DelCostello, declined to exercise its jurisdiction over the pendent state law claims, and dismissed the complaint. Plaintiffs appeal contending that because Eidal wholly repudiated the col- lective bargaining agreement, including its duty to arbitrate, the suit is governed by the state limitations period for breach of contract, and that DelCostello is inapposite. Il. No federal statute of‘limitations is specifically provided for section 301 actions. DelCostello, 462 U.S. 151, estab- lished that the six-month statute of limitations contained in section 10(b) of the National Labor Relations Act, 29 U.S.C. §160(b) (1982) (NLRA), governs a hybrid action, i.e., an action in which an employee may sue both his employer and the union because the union has undermined the grievance and arbitration process by violating its duty to fairly repre- sent the employee. The timeliness of plaintiffs’ claims against Eidal turns on whether the company’s alleged repudiation of the bargaining agreement makes the case more closely analogous to an action on a contract than to a typical hybrid claim governed by DelCostello. A. In order to determine the proper characterization of this action, it is helpful to review the line of cases culminating in DelCostello. The seminal case of UAW v. Hoosier Cardi- nal Corp., 383 U.S. 696 (1966), involved a section 301 suit for breach of a collective bargaining agreement by an employ- er. The claim in Hoosier resembled a straightforward action on a contract; there was no requirement to arbitrate and the union sued directly on the bargaining agreement. The Court concluded that under these circumstances, the time- liness of the suit was to be governed by applying the most appropriate state statute of limitations. In deciding not to apply a uniform federal rule of timeliness to such actions, - 4a - the Court emphasized that national uniformity is relatively unimportant when an issue does not implicate “those con- sensual processes that federal labor law is chiefly designed to promote — the formation of the collective bargaining agreement and the private settlement of disputes under it.” Id. at 702. Hoosier reserved the question whether differ- ent types of section 301 actions might necessitate different rules of timeliness. See id. at 705 n.7. Subsequent cases wrestled with various issues involv- ing section 301 suits. The Court allowed individual employ- ees as well as unions to sue their employers for breach of a bargaining agreement, Smith v. Evening News Association, 371 U.S. 195, 200 (1962), but required them to exhaust con- tractually mandated grievance and arbitration procedures, Republic Steel Corp. v. Maddox, 379 U.S. 650, 652-53 (1965), and to abide by finality provisions contained in the agree- ment, see W. R. Grace & Co. v. Local Union 759, Interna- tional Union of Rubber Workers, 461 U.S. 757, 764 (1983). If, however, a union undermined the grievance and arbi- tration process by violating its duty of fair representation, an employee could sue both employer and union irrespec- tive of the finality or outcome of those proceedings. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 567-71 (1976); Vaca v. Sipes, 386 U.S. 171, 185-86 (1967); see also Del- Costello, 462 U.S. at 164. These so-called hybrid actions dif- fer significantly from cases like Hoosier. In a hybrid action an employee suing his employer for breach of a bargaining agreement can advance that claim only if he also prevails on a decidedly non-contractual claim against his union. See United Parcel Service, Inc v. Mitchell, 451 U.S. 56, 62-63 (1981). The two claims are inextricably linked, and are a cre- ation of federal labor law that lacks any close analogy in state law. Unlike Hoosier, such hybrid actions directly challenge the private resolution of disputes under the grievance and arbitration procedures provided for in most bargaining agree- ments. See DelCostello, 461 U.S. at 165. - fe - As explained in DelCostello, an appropriate limitations period for hybrid cases must be long enough to allow employ- ees to vindicate their rights effectively, yet short enough to ensure “the relatively rapid resolution of labor disputes favored by federal law.” See 462 U.S. at 168. Because of the unique nature of hybrid cases, the usual practice of seek- ing analogies in state law proved unsuccessful in fulfilling these federal objectives.’ Recognizing that a uniform stan- dard was needed, the Court in DelCostello responded by adopting the six-month statute of limitations contained in section 10(b) of the NLRA. Id. at 169-72; see generally Jones v. Consolidated Freightways, Corp., T76 F.2d 1458, 1462 (10th Cir. 1985). In so doing, however, the Court reaffirmed that “resort to state law remains the norm for borrowing of limitations periods.” DelCostello, 461 U.S. at 171. B. This case is superficially similar to a hybrid action. Plain- tiffs are suing both their employer and their union. Addi- tionally, the bargaining agreement contains a comprehensive grievance and arbitration clause, which applies to all dis- putes “as to the meaning or application of any provisions” of the agreement. See rec., vol. I, at 22. Considering that the signatories evinced no intention to exclude controver- sies arising from transactions such as the one involved in this action, arbitration would ordinarily be appropriate. See AT&T Technologies, Inc. v. Communication Workers, 106 S. Ct. 1415, 1418 (1986). ‘In United Parcel Service Inc v. Mitchell 451 U.S. 56 (1981), the Court applied a 90-day state limitations period for vacation of a commercial arbitration award to an employee’s lawsuit against his employer. In DelCostello, the Court noted that this choice would resolve labor disputes quickly, but at the cost of denying relatively unsophisticated employees adequate time in which to sue. See 461 U.S. at 165-66. The Court added that an employee’s claim against his union in no way resembled an action to vacate an arbitration award. See id. at 166-67. - 6a - iii icra In one crucial respect, however, this case is distinguish- able from a typical hybrid action, and more analogous to a contract action, as in Hoosier. Plaintiffs allege that Eidal. repudiated the grievance and arbitration process as part of its unilateral effort to evade an undesirable bargaining agree- ment. The notion of a sham transaction, in the sense of being both covert and in bad faith, implies a determination to repu- diate the contract and thereby avoid arbitration.” This con- tract claim in no way depends upon proof concerning “the nature of the union’s discharge of its duty of representa- tion.” See Gould, Inc. v. Adams, 105 8. Ct. 806, 808 (White, J., joined by Brennan and Powell, JJ., dissenting from denial of certiorari). Because Eidal allegedly acted unilaterally, its potential liability to these plaintiffs is properly viewed as distinct from that of the union. Cf. Mitchell, 451 U.S. at 62-63. A defendant employer should not be permitted to characterize as a “hybrid action” what is essentially a contractual claim simply because the union has acquiesced in the breach. In the present case, any union complicity does no more than explain why plaintiffs have sued individually. In sum, if the complaint adequately states a claim of contract repudiation, then plaintiffs’ section 301 claim against Eidal and Jencor may be properly analogized to an action on a contract, and the appropriate state limitations period should be applied. {. In Vaca, 386 U.S. at 185, the Court made clear that individual employees may sue their employer directly for 2 An employer’s repudiation of the grievance and arbitration process can also constitute an unfair labor practice within the jurisdiction of the NLRB. Such a violation, however, does not make the employer’s conduct any less a breach of a collective bargaining agreement, which is actionable under §301. See United Steelworkers v. New Park Mining, 273 F.2d 352, 357-58: see also Teamsters Local 174 v. Lucas Flour Co., 369 U.S. 95, 101 n.9 (1962). In this case, moreover, Eidal’s repudiation cannot be separated from the alleged substantive breach. > breach of a bargaining agreement if the employer has effec- tively repudiated the grievance and arbitration process. “An obvious situation in which the employee should not be limited to the exclusive remedial procedures estab- lished by the contract occurs when the conduct of the employer amounts to a repudiation of those contractu- al procedures. Cf. Drake Bakeries, Inc. v. Local 50, Am. Bakery, etc., Workers, 370 U.S. 254, 260-263, 82 S. Ct. 1346, 1850-1352, 8 L.Ed.2d 474. See generally 6A Corbin, Contracts $1443 (1962). In such a situation (and there may of course be others), the employer is estopped by his own conduct to rely on the unexhausted griev- ance and arbitration procedures as a defense to the employee’s cause of action.” Id. “(jn determining whether one party has so repudiated his promise to arbitrate that the other party is excused the circumstances of the claimed repudiation are critically impor- tant.” Drake Bakeries, Inc. v. Local 50, American Bakery, 370 U.S. 254, 262-63 (1962). An employer’s repudiation may take the form of either an express refusal to abide by con- tractually established grievance and arbitration machinery, see, e.g., Boone v. Armstrong Cork Co., 384 F.2d 285, 289 (5th Cir. 1967), or conduct which renders the employer unable or apparently unable to comply, cf. Restatement (Sec- ond) of Contracts §250(b) & comment c (1979). Substantive breaches of a bargaining agreement do not necessarily imply a concommitant refusal to arbitrate over the propriety of the alleged breach. See Drake Bakeries, 370 U.S. at 262; Robbins v. George W. Prescott Publishing Co., 457 F. Supp. 915, 921 (D. Mass. 1978). A plaintiff must show some specific basis for believing that the breaching party would not submit . the matter to arbitration, and conclusory allegations will not fulfill this requirement, see Robbins, 457 F. Supp. at 922. Plaintiffs allege that Eidal notified its employees of the sale to Jencor only after its consummation. They allege that - 8a - Eidal proceeded unilaterally and covertly, in order to un- dermine the bargaining agreement. The announcement of a completed transaction deprived plaintiffs of recourse to arbi- tration before the sale. The July 1982 letter effectively announced an end to all contractual relations. Although this letter does not specifically disclaim the duty to arbitrate, its indication that the contract no longer existed supports an inference of repudiation. See Kaylor v. Crown Zellerbach, Inc., 643 F.2d 1362, 1366 (9th Cir. 1981); Smith v. Pitts- burgh Gage & Supply Co., 464 F.2d 870, 875 (3d Cir. 1972). Moreover, Eidal did not transfer the bargaining agreement to Jencor, which signed a pre-hire agreement with the union and installed a new workforce on quite different terms. The complaint further alleges that the purported change in own- ership from Eidal to Jencor was a sham, and that the two companies are actually the same employer.” These allega- tions describe with sufficient particularity a sham transac- tion that constitutes a repudiation. D. This case does not implicate the policy concerns which warranted the borrowing of a federal rule of timeliness in DelCostello. “A Vaca v. Sipes suit normally involves an issue that is intertwined with the day-to-day relationship between management and labor.” Adams v. Gould, Inc., 739 F.2d 858, 867 (3d Cir. 1984), cert. denied, 105 S. Ct. 806 (1985). Vaca, Hines, Mitchell, and DelCostello all involved the alleg- Eidal argues that under a management prerogative clause it had the right to relocate or close its business, provided that notice and an opportunity for discussion was first provided to the union. Plaintiffs essentially counter that it would be a breach of an implied duty of good faith and fair dealing to sell the business for the sole purpose of evading Eidal’s obligations under the bargaining agreement. See New Park Mining Co., 273 F.2d at 357 (10th Cir. 1959). Given the allegations of a sham transaction and repudiation of the contract, there are clearly fact issues which prevent the assumption that | the company did not breach the bargaining agreement. ss \ ee edly wrongful discharge of individual employees within the context of an otherwise established and continuing relation- ship between management and labor. “Speed and finality in the resolution of disputes are the most relevant policies in those situations.” Jd. This case, in contrast, involves not only an alleged unilateral repudiation of the grievance and arbitration process, but a severante of all existing contrac- tual relations. When the contract has been completely repu- diated and the employer has closed down its business, the labor law policies that persuaded the Court in DelCostello to adopt the uniform six-month statute of limitation are not applicable.‘ The district court dismissed as time barred the federal claims contained in Counts I-III of plaintiffs’ complaint and declined to exercise discretionary jurisdiction over the pen- dent state law claims contained in Counts IV-VI. Count I states plaintiffs’ primary basis for relief: breach of the collective bargaining agreement. For the reasons stated in Part II of this opinion, the district court erred in holding on the basis of the pleadings that this claim is sufficiently an- alogous to a hybrid action to warrant the application of the federal six-month statute of limitations under DelCostello. *Farr v. H K. Porter Co., 727 F.2d 502 (5th Cir. 1984), the strongest case relied upon by defendants, does not indicate otherwise. In Farr, the court applied §10(b)’s limitation period to employee claims against H. K. Porter and the local union for failure to negotiate over the sale of a brickmaking plant. Unlike Eidal, Porter never repudiated. The transaction instead took -place in the context of an open and continuing relationship. The plaintiffs could assert only that the sale was mishandled by the employer and union working in conjunction, not that contractual relations had broken down at the employer’s instigation. H. K. Porter was decided after a full trial on the merits. It would be premature to dismiss this action when plaintiffs’ allega- tions concerning contract repudiation must be accepted as true. - 10a - If upon development of the facts it is established that the contract was not repudiated as alleged, then the six-month limitations period will apply. Otherwise, the case is governed by the most analogous New Mexico statute of limitations. Count II charges the union with violating its duty of fair representation by, among other things, failing to pro- tect the rights of the parties in connection with the sale. The parties in this case have addressed only the analogy between plaintiffs’ section 301 claims against Eidal and Jencor and the facts of Hoosier versus those of DelCostello. No party has briefed or argued the timeliness of an inde- pendent claim against the union. Moreover, like the Count I claim, the applicable statute of limitations governing this claim may depend on the facts. We therefore decline to decide what limitations period is applicable to Count I1, and we remand this issue for an initial decision by the district court. Count III asserts that Eidal wrongfully discharged its employees. The complaint contends that these terminations helped impiement Eidal’s plan to evade the bargaining agree- ment. This alleged link with the breach of contract described in Count I indicates that these wrongful discharge claims should not be viewed as subject to section 10(b)’s limitations period. Even those workers who were discharged before the sale to Jencor allegedly had no firm basis for objecting until they realized that the transaction was a sham and that Eidal had repudiated the contract. The timeliness of Count III is therefore governed by our analysis of Count I. Counts IV-VI seek relief under New Mexico law. The district court declined to exercise jurisdiction over these counts in the absence of any timely claim under federal law. Having reinstated plaintiffs’ federal claims we also reverse the dismissal of plaintiffs’ state law claims. On remand, the district court retains the discretion to decline jurisdiction if it again becomes warranted during the course of litigation. -lla- See 13B C. Wright & A. Miller, Federal Practice and Pro- cedure §3567.1, at 142-43 & n.31 (2d ed. 1984) (citing Unit- ed Mine Workers v. Gibbs, 383 U.S. 715, 727 (1966)). IV. The judgment of the district court dismissing the com- plaint is reversed and the case is remanded for further pro- ceedings consistent with this opinion. - 12a - EXHIBIT 2 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO RICHARD GARCIA, et al., Plaintiffs, vs. No. CIV-84-142 C EIDAL INTERNATIONAL CORP., et al., Defendants. MEMORANDUM OPINION Filed September 4, 1984 This matter comes before the Court on three Motions to Dismiss, one each filed by the Defendants Jencor Inter- national Corporation, Eidal International Corporation, and the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, Local Lodge 338. The Plaintiffs have also filed a Motion to Strike the Union’s Statute of Limitations Defense. The Court, having considered the parties’ memoranda and the legal authority pertinent to the issues, finds and concludes that the Defendants’ Motions are well-taken and should be granted. The Plaintiffs are former employees of Eidal Interna- tional Corporation (“Eidal”) and, as pertinent to that Defen- dant for the disposition of this motion, have alleged in Count I of their First Amended Complaint a violation of the Col- lective Bargaining Agreement (“CBA”) which their union had negotiated with Eidal. The terms of the CBA were to run from August 2, 1981 to July 31, 1984. In January 1982 Eidal began laying off its employees. These layoffs contin- ued until July 1982 when Eidal ceased manufacturing in New Mexico and all remaining employees were terminated. The present lawsuit was commenced on January 31, 1984. - 13a - Count I alleges a violation of the CBA and, therefore, a breach of contract. It is alleged that Jencor, as the alter ego of Eidal, was also bound by the CBA. Count II alleges that the union violated its duty of fair representation. Counts III, IV, V, and VI are pendent claims which respectively allege wrongful discharge, a conspiracy to defraud, the tor- tious interference with contractual relations, outrageous conduct. This particular suit, at least as it arises under federal ~law, is very similar to the kind of “hybrid” cause of action, an alleged violation of the CBA under 29 U.S.C. $185 (here- inafter §301) joined with a claim that a union violated its duty of fair representation, which the Supreme Court dis- cussed in DelCostello v. International Brotherhood of Team- sters, 51 U.S.L.W. 4693 (U.S. June 8, 1983) (No. 81-2386). In DelCostello the Supreme Court held that the six-month statute of limitations period found in Section 10(b) of the National Labor Relations Act (NLRA), 29 U.S.C. §160(b), controlled a “hybrid” cause of action based on the breach of a CBA and the breach of a union’s duty of fair representation. The present action is very similar to Benson v. Gener- al Motors Corporation, 716 F.2d 862 (llth Cir. 1983) where- in plaintiffs-employees sued both the employer for breach of contract and the union for breach of its duty of fair rep- resentation under §301. In Benson the plaintiffs contended their seniority rights were violated in that they were not accorded preferential consideration for employment in cer- tain new General Motors plants being opened as provided for in a national agreement between General Motors and the union. No grievance procedure for alleged violations of the seniority rights was invoked. Instead, plaintiffs filed suit more than six months after they were aware or should have been aware of the alleged injury. The district court, follow- ing DelCostello, held that plaintiffs claims were barred by the six-month limitations period of §10(b) and granted sum- - 14a - mary judgment for the employer and union. The court of appeals agreed with the district court’s statement of the law, but remanded the case because fact issues existed as to when employees were or should have been aware of the injury complained of. The Tenth Circuit has also recently analyzed the Del- Costello case in the context of the Railway Labor Act, a distinction of no moment for the purpose of these motions. The Tenth Circuit noted that: The Court [in DelCostello] held that the six-month statute of limitations expressly provided for §10(b) of the NLRA should apply to a hybrid breach of contract/ duty of fair representation claim brought pursuant to that Act; a breach of the implied duty of fair represen- tation is most analogous to an ‘unfair labor practice,’ which is actionable before the National Labor Relations Board under §10 of the NLRA. Barnett v. United Air Lines, Inc., ___ F.2d ___., __, slip op. at 10 (10th Cir. June 21, 1984). The Court has consid- ered the Plaintiffs’ attempts to distinguish DelCostello and finds them unpersuasive. Further, this Court agrees with the analysis expressed in Perez v. Dana Corporation, 718 F.2d 581 (3d Cir. 1983) that DelCostello should be applied retroactively. “(T]he §10(b) period begins to run. . . when plaintiffs either were aware or should have been aware of the injury itself. . . .” Benson v. General Motors Corp., 716 F.2d at 864. In the instant case as alleged in Count I, paragraph 4 of the First Amended Complaint, defendant Eidal began laying off employees in January 1982. Those layoffs contin- ued until July 1982 when Eidal ceased manufacturing in New Mexico and all remaining employees were terminated. See Exhibit B to the First Amended Complaint. The six-month - 15a - statute of limitations would thus, at the latest, begin to run from July 22, 1982 when Eidal ceased operations and Jencor commenced operations. As more than eighteen (18) months passed from July 22, 1982 until commencement of this action on January 31, 1984, the action is barred by §10(b) of the National Labor Relations Act and DelCostello. Finally, the Court will not exercise its discretion over the remaining pendent state claims. See United Mine Work- ers v. Gibbs, 383 U.S. 715 (1966). An order in accordance with this Memorandum Opinion will be entered forthwith. SANTIAGO E. CAMPOS United States District Judge - 16a - ee ea EXHIBIT 3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO RICHARD GARCIA, et al., Plaintiffs, VS. No. CIV-84-142 C EIDAL INTERNATIONAL CORP., et al., Defendants. ORDER Filed September 4, 1984 THIS MATTER comes before the Court on three Mo- tions to Dismiss filed by the Defendants Jencor Internation- al Corporation, Eidal International Corporation, and the International Brotherhood of Boilermakers, Iron Ship Build- ers, Blacksmiths, Forgers and Helpers, AFL-CIO, Local Lodge 338. The Court, having considered the parties’ mem- oranda, examined the pertinent legal authority, and in accor- dance with its Memorandum Opinion finds and concludes that the Motions are well-taken and should be granted; : IT IS, THEREFORE, ORDERED that the above- described Motions to Dismiss should be, and hereby are, granted, and the Complaint is, hereby, dismissed. SANTIAGO E. CAMPOS United States District Judge - 17a - _— eds | EXHIBIT 4 JANUARY TERM - March 12, 1987 Before Honorable Monroe G. McKay, Honorable Stephanie K. Seymour and Honorable John P. Moore, Circuit Judges. RICHARD GARCIA, et al., Plaintiffs-Appellants, v. : No. 84-2255 EIDAL INTERNATIONAL CORPORATION, etc., et al., ) i Defendants-Appellees. This matter comes on for consideration of appellees’ peti- tion for rehearing filed in the captioned cause. Upon consideration whereof, it is ordered that appel- lees’ petition for rehearing is denied. ROBERT L. HOECKER, Clerk - 18a - EXHIBIT 5 LABOR-MANAGEMENT RELALATIONS 29 $185. Suits by and against labor organizations (a) Suits for-violation of contracts between an employ- er and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controver- sy or without regard to the citizenship of the parties. (b) Any labor organization which represents employ- ees in an industry affecting commerce as defined in this chap- ter and any employer whose activities affect commerce as defined in this chapter shall be bound by the acts of its agents. Any such labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of the United States. Any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforcea- ble against any individual member or his assets. (c) For the purpose of actions and proceedings by or against labor organizations in the district courts of the Unit- ed States, district courts shall be deemed to have jurisdic- tion of a labor organization (1) in the district in which such organization maintains its principal office, or (2) in any dis- trict in whic} its duly authorized officers or agents are engaged in representing or acting for employee members. (d) The service of summons, subpoena, or other legal process of any court of the United States upon an officer or agent of a labor organization, in his capacity as such, shall constitute service upon the labor organization. - 19a - eT (e) For the purpose of this section, in determining whether any person is acting as an “agent” of another per- son so as to make such other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subsequently ratified shall not be controlling. - 20a - EXHIBIT 6 LABOR-MANAGEMENT RELATIONS 29 $160. Prevention of unfair labor practices — Powers of Board generally * * * (b) Whenever it is charged that any person has engaged in or is engaging in any such unfair labor practice, the Board, or any agent or agency designated by the Board of such pur- poses, shall have power to issue and cause to be served upon such person a complaint stating the charges in that respect, and containing a notice of hearing before the Board or a mem- ber thereof, or before a designated agent or agency, at a place therein fixed, not less than five days after the serving of said complaint: Provided, That no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made, unless the person aggrieved thereby was prevented from filing such charge by reason of service in the armed forces, in which event the six-month period shall be computed from the day of his discharge. Any such complaint may be amended by the member, agent, or agency conducting the hearing or the Board in its discre- tion at any time prior to the issuance of an order based there- on. The person so complained of shall have the right to file an answer to the original or amended complaint and to appear in person or otherwise and give testimony at the place and time fixed in the complaint. In the discretion of the member, agent, or agency conducting the hearing or the Board, any other person may be allowed to intervene in the said pro- ceeding and to present testimony. Any such proceeding shall, so far as practicable, be conducted in accordance with the rules of evidence applicable in the district courts of the United States under the rules of civil procedure for the district courts of the United States, adopted by the Supreme Court of the United States pursuant to section 2072 of Title 28. - 2la - ET EXHIBIT 7 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO RICHARD GARCIA, EPIFANIO VELAZQUEZ, ROBERT LEE ARAGON, MANUEL RITO CHAVEZ, GREGORY ARCHIBEQUE, J. W. HAMILTON, FRANCIS J. BOHENSKY, DENNIS EARL BARELA, ROBERT GUTIERREZ, LEROY DANIEL ZAMORA, RICHARD JARAMILLO, MAYO K. ULIBARRI, RUDOLPH SAIZ, ADELICIO G. HERRERA, IVAN ARAGON, RICHARD D. McGUIRE, CARLOS BENAVIDEZ, ERNEST TRUJILLO, MIGUEL DELGADO, FRANK SANCHEZ, ALEX MADRID, DELBERT DAVENPORT, JOE LOPEZ, MICHAEL BOCK, KENNETH GRIEGO, HARVEY WEST, LINDA POTEET MINTEER, JOHN G. RAEL, HERMAN CHAVEZ, ROBERT CHAVEZ, DAVID TRUJILLO, ORLANDO QUINTANA, WILLIAM H. HARRAH, CHRISTOPER GARCIA, BENJAMIN ARAGON, JOSEPH N. LEPESKA, TRINIDAD BARELA, SAM BLEA, JIMMY REID, THOMAS WILSON, JR., and STEVE MELTON, Plaintiffs, Vv. Cause No. CIV 84-0142C EIDAL INTERNATIONAL CORPORATION, a foreign 2a site corporation; JENCOR INTERNATIONAL CORPORATION, a foreign corporation; and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO, LOCAL LODGE NO. 338, a Labor organization, and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS, AND HELPERS, AFL-CIO, a Labor organization, Defendants. FIRST AMENDED COMPLAINT FOR VIOLATION OF COLLECTIVE BARGAINING AGREEMENT, _ WRONGFUL DISCHARGE, VIOLATION OF THE DUTY OF FAIR REPRESENTATION, CONSPIRACY TO DEFRAUD, INTERFERENCE WITH CONTRACTUAL RELATIONS, AND OUTRAGEOUS CONDUCT COME NOW the plaintiffs, by and through their attorneys of record, Marchiondo & Berry, P.A., and H. Richard Black- hurst, Esq., and for their cause of action against the above- named defendants state and allege as follows: GENERAL ALLEGATIONS 1. Plaintiff Epifano Velazquez is a resident of Rio Rancho, New Mexico; plaintiffs Robert Lee Aragon, Man- uel Rito Chavez, Gregory Archibeque, J. W. Hamilton, Fran- cis J. Bohensky, William K. Harrah, Robert Gutierrez, Leroy Daniel Zamora, Richard Jaramillo, Mayo K. Ulibarri, - 3a - | | . Rudolph Saiz, Adelicio Herrera, Orlando Quintana, Carlos Benavidez, Ernest Trujillo, Miguel Delgado, Frank Sanchez, Delbert Davenport, Michael Bock, Joe Lopez, Kenneth Griego, David Trujillo, Richard Garcia, Joseph N. Lepeska, Jimmy Reid, Thomas Wilson, and John G. Rael are resi- dents of Albuquerque, New Mexico; plaintiffs Dennis Barela, Harvey West, Ivan Aragon, Richard D. McGuire, Robert Chavez, Trinidad Barela, and Linda Poteet Minteer are res- idents of Los Lunas, New Mexico; plaintiff Alex Madrid is a resident of Bernalillo, New Mexico; plaintiffs Herman Cha- vez, Benjamin Aragon, and Steve Melton are residents of Peralta, New Mexico; plaintiff Christopher Garcia is a resi- dent of Belen, New Mexico; plaintiff Sam Blea is a resident of Rainsville, New Mexico; and plaintiff J. W. Hamilton is a resident of Corrales, New Mexico. 2. Defendant Eidal International Corporation is a for- eign corporation doing business, or formerly doing business, in Bernalille County, New Mexico, and engaged in an indus- try affecting interstate commerce. 3. Defendant Jencor International Corporation is a for- eign corporation doing business in Bernalillo County, New Mexico, and engaged in an industry affecting interstate commerce. 4. Defendant International Brotherhood of Boilermak- ers, Iron Ship Builders, Blacksmiths, Forgers, and Help- ers, AFL-CIO, Local Lodge No. 338 is a labor organization as defined by the National Labor Relations Act and is a sub- ] sidiary and agent of defendant national labor organization International Brotherhood of Boilermakers, [ron Ship Build- ers, Blacksmiths, Forgers, and Helpers, AFL-CIO. 5. Plaintiffs are former employees of defendant Eidal International Corporation, who are no longer so employed - 24a - es OSS eae a “7 ‘ by virtue of the acts complained of in this lawsuit, and are members or former members of defendant International » Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers and Helpers, AFL-CIO, Lodge No. 338, and its parent organization. 6. Plaintiffs collectively bring this action as a class action, pursuant to Rule 23 of the Federal Rules of Civil Procedure, for and on behalf of themselves as well as all other former Eidal employees similarly situated. 7. This Court has jurisdiction of this action pursuant to §301 of the Labor Management Relations Act, 29 U.S.C. §185; 28 U.S.C. §1337, and the Court’s pendant and ancil- lary jurisdiction thereto. COUNT I VIOLATION OF COLLECTIVE BARGAINING AGREEMENT 1. Plaintiffs restate Paragraphs 1 through 7 of their gen- eral allegations previously set forth. 2. That on or about August 2, 1981, defendant Inter- national Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers of America, AFL-CIO, Local Lodge No. 338 (hereinafter “Union”) and defendant Eidal International Corporation (hereinafter “Eidal”) did enter into a collective bargaining agreement, a true and cor- rect copy of which is attached hereto as Exhibit “A,” cover- ing all employees in the following bargaining unit: All production and maintenance employees, warehouse- men, truck drivers, and inspectors, certified as per N.iu.R.B., but excluding all office and clerical employ- ees, the office janitor, sales employees, guards, profes- sional employees, assistant foremen and foremen. - 25a - That the term of such contract was from August 2, 1981, until July 31, 1984. That in the normal course of events an identical or substantially similar contract would have been entered into at the expiration of this contract by the Union and Eidal. 3. That plaintiffs were employees performing work within such defined bargaining unit during the effective peri- od of the aforementioned collective bargaining unit and were entitled to the rights and protections accorded by such col- lective bargaining agreement, negotiated on their behalf by defendant Uision. 4. That in 1982 defendant Eidal announced that it had sold all of the work previously performed by employees in the aforementioned bargaining unit to Jencor International Corporation (hereinafter “Jencor”). That in anticipation of such sale, and commencing in approximately January 1982 defendant did successively “lay off’ groups of employees, until July 1982, at which time those remaining were termi- nated and those who had been laid off were advised that they would not be recalled, as evidenced by Exhibit “B” attached hereto. 5. The defendant Eidal did announce to its employees that they could apply to defendant Jencor for employment. That defendant Jencor at no time did ever intend to rehire any significant number of former Eidal employees and defen- dant Eidal did fail to specifically include any such provision in any sale agreement. That after hiring a few token for- mer Eidal employees, defendant Jencor did go out on the open market and did complete its work force with outside employees. That the Jencor employees were hired on terms contrary to the collective bargaining agreement previously mentioned and for substantially less pay. - 26a - 4¥ 6. That defendant Eidal and defendant Jencor are the alter egos of each other, and furthermore, in essence, con- stitute a single employer. That the ostensible change in own- ership was a fraudulent and sham transaction, designed to reduce operational overhead at the expense of Eidal’s em- ployees. 7. That being the “alter ego” of defendant Eidal, defen- dant Jencor was obligated, and legally bound to assume the provisions of the collective bargaining agreement in full force and effect at the time of the purported change in owner- ship, and to abide by its terms, including calling formerly laid off employees back to work according to seniority (Arti- cle 20); permitting bargaining unit employees to perform the work in the bargaining unit; not replacing the employees in the bargaining unit with outsiders; offering bargaining unit employees employment at the agreed-upon contract rates; contributing to the Union Pension Plan for the benefit of such employees (Article 12), and accruing to the benefit of such employees vacation pay, seniority, group life, health, and accident insurance and other benefits of the contract. 8. That defendants Eidal and Jencor did breach such collective bargaining agreement by transferring the work to be performed in the bargaining unit to a fraudulent and sham entity; by terminating the employees in the bargain- ing unit; by failing to rehire or recall the former Eidal employees to the new positions with Jencor on the basis of seniority; by hiring outsiders to fill such positions without first offering such positions to the former Eidal employees; by offering employment at rates substantially lower than the agreed-upon contract rates; and by causing the former Eidal employees to lose their employment, accrued year of seniority, and benefits they would have been entitled to under the contract. Defendant Union did acquiesce in the breach of contract. - 27a - 9. That, in the alternative, if it is shown that defen- | dant Jencor was not and is not the alter ego of defendant | Eidal; then it is alleged that Jencor is the successor to Eidal, and that by its acts and deeds it did expressly and implied- ‘ ly adopt and consent to be bound by Eidal’s collective bar- gaining agreement, attached hereto as Exhibit “A.” 10. That the conduct of defendants Jencor and Eidal and defendant Union as set forth above is so outrageous, wanton, and malicious so as to entitle those injured there- by to be entitled to recover punitive damages. 11. That as a direct and proximate result of the afore- mentioned breach of contract, plaintiffs have lost their live- lihood, have been either unemployed for substantial periods of time or forced to accept employment at a reduced salary; have suffered emotional distress and diminishment of their lifestyle, all of which were foreseeable and known conse- quences of such breach; and have lost the benefits of the collective bargaining agreement which they would have been entitled to but for the actions of defendants Eidal, Jencor, and Union. WHEREFORE, plaintiffs pray for judgment, joint and several, against defendants Eidal, Jencor, and Internation- al Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers, and Helpers, AFL-CIO, Local 338 and International Brotherhood of Boilermakers, Iron Ship Build- ers, Blacksmiths, Forgers and Helpers, AFL-CIO, for their compensatory damages, to be shown with specificity at the trial herein, but collectively exceeding one million dollars ($1,000,000); for punitive damages in an amount of no less than ten million dollars ($10,000,000); for a pre-judgment interest on such sums; a reasonable attorney’s fee, their costs of this action, and for such other just and proper relief as the Court deems warranted. - 28a - Se COUNT II VIOLATION OF THE DUTY OF FAIR REPRESENTATION 1. Plaintiffs restate Paragraphs 1 through 7 of their gen- eral allegations previously set forth; and Paragraphs 1 through 11 of Count I of this complaint, previously set forth. 2. That the defendant International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, Local Lodge No. 338, (hereinafter “Union”) is a labor organization as defined by the National Labor Relations Act, and was the duly certified bargaining agent for the bargaining unit described in the collective bar- gaining agreement, attached hereto as Exhibit “A,” and is a subsidiary and agent of defendant International Brother- hood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO. 3. That under the provisions and policies of the Nation- al Labor Relations Act, defendant Unions had a duty to deal in good faith and to fairly represent the employees in the bargaining unit. 4. That internal union remedies to correct the acts com- plained of herein would be futile, or else are unavailable or inadequate. 5. That in connection with the sale and transfer of defen- dant Eidal’s bargaining unit work to defendant Jencor, defen- dant Unions did breach the duty of fair representation owed plaintiffs in the following, but not limited to, manner: a. By failing to bargain in good faith with defen- dant Eidal regarding the sale of the bargaining unit func- tions to defendant Jencor. - 29a - b. By failing to vigorously assert and protect the rights of the employees in connection with such sale. c. By failing to negotiate from defendant Jencor a provision requiring hiring of all of the former Eidal em- ployees. d. By failing to file with the National Labor Rela- tions Board unfair labor practice charges regarding the sale between Eidal and Jencor: e. By failing to file with the National Labor Rela- tions Board unfair labor practice charges on behalf of indi- vidual former employees of Eidal in connecting with Jencor’s refusal to hire them. f. By failing to bring appropriate legal action. g. By failing to adequately and properly inform for- mer Eidal employees of their legal rights and remedies. h. By entering into an illegal pre-hire contract with Jencor which was subsequently thrown out by the National Labor Relations Board. i. By conspiring with defendants Eidal and Jencor, and causing plaintiffs to lose their employment as a result. j. By being solely concerned with the continuity of the union and not the welfare of the bargaining unit employees. 6. That as a result of violating the duty of fair repre- sentation owed plaintiffs by the defendant Unions, plain- - 30a - tiffs have suffered damages, as will be shown at trial. 7. That the conduct of the defendant Unions is so out- rageous, wanton, and malicious, so as to warrant the impo- sition of punitive damages. WHEREFORE, plaintiffs pray for judgment, joint and several, against the defendants International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers of America, AFL-CIO, and its agent Interna- tional Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers of America, AFL-CIO, Local Lodge No. 338 for their compensatory damages as to be shown specifically at trial, but collectively exceeding one million dollars ($1,000,000), for punitive damages in an amount of no less than ten million dollars ($10,000,000), pre-judgment interest on such sums, a reasonable attorney’s fee, costs, and for such other just and proper relief as the Court deems warranted. COUNT III WRONGFUL DISCHARGE 1. Plaintiffs restate and reallege Paragraphs 1 through 7 of the general allegations. Paragraphs 1 through 11 of Count I of this complaint, and Paragraphs 1 through 7 of Count II of this complaint. 2. That commencing in approximately January, 1982, defendant Eidal began to “lay off’ successive groups of employees on the ostensible basis that there was no work to be performed. Finally, in July 1982, those employees remaining were terminated, and those who had been pre- viously laid off were advised that they would not be recalled, due to the fact of the sale and transfer of the production work of defendant Eidal to defendant Jencor. - la - 3. That such layoffs and terminations were part of a pre-conceived plan or scheme; that both defendant Eidal and defendant Jencor knew that the existing collective bargain- ing agreement was not going to be honored by the defen- dant Jencor, and that defendant Jencor would not be rehiring the former Eidal employees, that in anticipation of such fraudulent transfer of the production work of defendant Eidal to its alter ego defendant Jencor, defendant Eidal did cause its normal work to be held up and directed towards defen- dant Jencor, so that it coujd lay off its employees. That the defendant Unions condoned and acquiesced in this scheme. 4. That the actions of defendants Eidal, Jencor, and the Unions, constituted, in essence, a de facto discharge or ter- mination of the former employees of defendant Eidal, con- trary to their contract of employment. 5. That such discharge was contrary to the public poli- cy of the National Labor Relations Act and the Labor Man- agement Relations Act which, by virtue of the Supremacy Clause of the United States Constitution, is the public poli- cy-of the State of New Mexico. 6. As aresult of such wrongful discharge, plaintiffs have suffered loss of income and livelihood, diminishment of their lifestyle and other damages to be shown at trial. WHEREFORE, plaintiffs pray for judgment, joint and several, against defendants Eidal International Corpora- tion, Jencor International Corporation, International Broth- erhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers, AFL-CIO, Local Lodge 338, and International Brotherhood of Boilermakers, [ron Ship Build- ers, Blacksmiths, Forgers, and Helpers, AFL-CIO for their damages suffered as a result of such wrongful discharge to - 32a - be shown at trial, but collectively exceeding one million dol- lars ($1,000,000) and for punitive damages in an amount of no less than ten million dollars ($10,000,000), pre-judgment interest on such claims, a reasonable attorneys fee, costs, and for such other just and proper relief as the Court deems warranted. COUNT IV CONSPIRACY TO DEFRAUD 1. Plaintiffs restate and reallege Paragraphs 1 through 7 of their general allegations, Paragraphs 1 through 11 of Count I of this complaint, Paragraphs 1 through 7 of Count II of this complaint, and Paragraphs 1 through 6 of Count III of this complaint. 2. That the actions of the various defendants previous- ly set forth constitute a conspiracy to defraud plaintiffs out ' of their employment and livelihood. Such conspiracy was motivated by an illegal desire to break the collective bar- gaining agreement, to reduce the overhead of the employ- ing entity through a sham or fraudulent change of ownership, and to rid the employing entity of certain employees deemed for whatever reasons to be undesirable, and to accomplish such goals by the illegal means previously set forth. WHEREFORE, plaintiffs pray for joint and several judgment against the defendants herein for their damages suffered as a result of such conspiracy, to be shown with specificity at trial, but collectively exceeding one million dol- lars ($1,000,000); for punitive damages in an amount of no less than ten million dollars ($10,000,000), pre-judgment interest on such claims, for reasonable attorney’s fee, their costs, and for such other just and proper relief as the Court deems warranted. Ss COUNT V TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS 1. Plaintiffs restate and reallege Paragraphs 1 through 7 of their general allegations, Paragraphs 1 through 11 of _ Count I of this complaint; Paragraphs 1 through 7 of Count II of this complaint; Paragraphs 1 through 6 of Count III of this complaint; and Paragraphs 1 and 2 of Count IV of this complaint. 2. That the actions of the various defendants previous- ly set forth constitute a tortious interference by defendants with the employment contract of the plaintiff employees. That such interference did result in a breach of such contract. WHEREFORE, plaintiffs pray for a joint and several judgment against the defendants named herein for their dam- ages suffered as a result of such tortious interference with contractual relations to be shown at trial, but collectively exceeding one million dollars ($1,000,000); for punitive damages in an amount not less than ten million dollars ($10,000,000); pre-judgment interest on such sums, for a rea- sonable attorney’s fee, their costs, and for such other just and proper relief as the Court deems warranted. COUNT VI OUTRAGEOUS CONDUCT 1. Plaintiffs restate and reallege Paragraphs 1 through 7 of their general allegations; Paragraphs 1 through 11 of Count I of this complaint; Paragraphs 1 through 7 of Count II of this complaint; Paragraphs 1 through 16 of Count III of this complaint; Paragraphs 1 and 1 of Count IV of this complaint; and Paragraphs 1 and 2 of Count V of this com- plaint. - 34a - 2. That the conduct of the various defendants, as pre- viously set forth, is so outrageous in nature as to warrant the imposition of damages therefor. 3. That as a result of such outrageous conduct, plain- tiffs have suffered emotional distress, and other injury. WHEREFORE, plaintiffs pray for a joint and several judgment against the named defendants herein for their dam- ages as a result of such outrageous conduct to be shown with specificity at trial, but collectively to exceed one million dol- lars ($1,000,000); for punitive damages in an amount of not less than ten million dollars ($10,000,000); pre-judgment interest on such sums; for a reasonable attorney’s fee; their costs in this matter, and for such other just and proper relief as the Court deems warranted. DOUGLAS.G. VOEGLER P.0. Box 568 Albuquerque, NM 87103 (505) 247-0751 H. RICHARD BLACKHURST 320 Gold Avenue SW, Suite 810 Albuquerque, NM 87103 (505) 247-1100 Attorneys for Plaintiffs - Bie - hie | EXHIBIT A AGREEMENT EIDAL INTERNATIONAL - CORPORATION and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS, AND HELPERS OF AMERICA, | AFL-CIO | LOCAL LODGE NO. 338 | Effective: August 2, 1981 to July 31, 1984 - 36a - CONTENTS Article Title Page 1. Recognition 3 2. Management Prerogative Clause 3 3. No Strike - No Lockout 5 4. Union Security 6 5. Check-Off 6 6. Overtime 7 A Hours of Work 8 8. Field Work 9 9. Holidays 9 10. Reporting Pay 10 11. Jury Pay 10 12. Pension Plan 19 13. Vacation 11 14. Seniority 12 15. Adjustment of Grievances 14 16. Arbitration 15 17. Safety and Sanitation 16 18. Discharge 17 19. Classification and Rates of Pay 18 20. Recall From Layoff 18 21. Insurance 19 22. Non-Discrimination 19 23. Saving Clause 19 24. Miscellaneous 19 25. Completed Contract Clause 20 26. Term of Agreement 21 Appendix “A” 22 - 37a - EIDAL INTERNATIONAL CORPORATION and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS, AND HELPERS OF AMERICA, AFL-CIO, LOCAL LODGE NO. 338 Effective August 2, 1981 to July 31 1984. AGREEMENT This agreement, made and entered into this second day of August, 1981, by and between EIDAL INTERNATION- AL CORPORATION, Albuquerque, New Mexico, herein- after referred to as the “Company” and INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS, AND HELP- ERS OF AMERICA AFL-CIO, LOCAL LODGE NO. 338, hereinafter referred to as the “Union”. INTENT AND PURPOSE It is the intent and purpose of this Agreement to pro- mote and improve industrial and economic relationships between the employees and the Company and herein to set forth the basic Agreement covering hours of work, rates of pay and conditions of employment to be observed between the parties hereto. For this purpose the parties hereto do promise and agree as follows: ARTICLE 1 RECOGNITION 1.1 The Company recognizes the Union as the sole and exclusive bargaining agent during the term of this Agree- ment with regards to hours, wages, and working conditions on behalf of all production and maintenance employees, ware- housemen, truck drivers, and inspectors, certified as per - 38a - N.L.R.B., but excluding all office and clerical employees, the office janitor, sales employees, guards, professional employees, assistant foremen and foremen. ARTICLE 2 MANAGEMENT PREROGATIVE CLAUSE 2.1 It is mutually recognized and agreed by the com- pany and the union that, except as abridged, (p. 3) delegat- ed, granted or modified specifically by this Agreement or any supplementary agreements that may be hereinafter ma‘ie, all of the rights, powers and authority the company had prior to the signing of this or any preceding agreement are retained by the company, and remain exclusively and without limitation within the rights of management. The union recognizes that the company has and retains the exclu- sive right to manage its business and all its actions and con- cerns except as expressly limited in this Agreement. The exercise of these rights, powers and authority retained by the company are not subject to the grievance procedure except as hereinafter specifically provided or as might be expressly limited by some specific provision elsewhere in this Agreement. Without limiting the generality and purpose of the fore- going provision, this includes but is not limited to (a) The right to select and hire, to promote, to lay off, to discharge for just cause, demote, discipline and to main- tain discipline and efficiency of employees; (b) To determine the schedules of work; (ec) Determination of products to be manufactured or services to be rendered. (d) The location of the business, including the estab- lishment of new business units, and the relocation or clos- ing of the present business unit, provided that notice is first - 39a - given and opportunity for discussion is provided to the union upon proposal to relocate or close the present operations. (e) The location or relocation of warehouses, the work to be assigned to each warehouse, the extent to which work in such warehouses shall be performed by employees cov- ered by this Agreement. (f) The determination of the layout and equipment to be used in the business, the processes, the techniques, meth- ods and means of manufacture and distribution, the materi- als to be used and the size and character of inventories. (g) The determination of financial policies, including accounting procedures, prices of goods or services, and cus- tomer relations. (h) The determination of the size of the work force, the allocation and assignment of work to workers, the determi- nation of policies affecting employees subject to the express provisions of this Agreement, the establishment of quality standards and judgment of (p. 4) workmanship required the retirement of employees. (i) The transfer (transfers out of the unit shall be on a voluntary basis only) or classification, reclassification, lay- off of employees. (j) The control and use of all company property. (k) The enforcement of all company rules and regulations now in effect and which may be issued from time to time and not in conflict with the specific provisions of this Agreement. (1) The discretion in the employment of the services of all supervisors, provided Foreman shall not perform work within the bargaining unit except for training purposes or in the event of an emergency. - 40a - (m) The determination of employee competency. (n) The right to contract or subcontract work to or from other firms. (0) No present or past practice, prior to this Agree- ment, shall be binding on the company or the union. 2.2 The question of whether the company has exercised any of the foregoing rights and powers contrary to the pro- visions of this Agreement may be taken up under the griev- ance procedure hereinafter provided. ARTICLE 3 NO STRIKE - NO LOCKOUT 3.1 The union agrees that durmg the term of this Agree- ment it will not authorize, encourage, cause, permit, engage in, or participate in any strike, walkout, sick-outs, slow- down, work stoppage, picketing, or any other types of refus- als to perform assigned or ordinary duties of any employee or other similar activity involving the company, or other activity which interferes with the company’s operations, or the storage, handling, sale, or delivery of any products man- ufactured by or handled by the-company or its suppliers or customers. The union further agrees that it will not autho- rize or encourage any of its members to engage in such prohibited activity and, in case of breach of this provision by any of its members or any member of the bargaining unit, it will immediately and publicly disavow any breach of this clause as a violation of this contract and will use all reasonable means within its power to end such work stoppage or other prohibited activity at the earliest possi- ble time. 3.2 If any employee violates any of the provisions (p. 5) of this Article such conduct shall constitute just cause for discharge and such discharge shall not be subject to - 4la - review under the Grievance and Arbitration procedure pro- vided under this Agreement upon any ground except as to the question of whether or not the employee did violate a provision of this Article. 3.3 The company agrees that it will not engage in any lockout during the life of this Agreement, it being specific- ally understood that this provision is not intended to in any way limit the company’s right otherwise under this Agree- ment to cease temporarily or permanently any or all of its operations and, in case of any controversy pertaining thereto, the rights of management reserved under the Management Prerogative Article of this Agreement shall be paramount. ARTICLE 4 UNION SECURITY 4.1 All present employees covered by this Agreement and coming under the jurisdiction of the union, as set forth in the Recognition Clause, Article 1, shall, as a condition of employment, become members of the union on the sixtieth (60th) day following the effective date of this Agreement and shall remain members in good standing during the life of this Agreement. All employees hired after the effective date of the Agreement shall, as a condition of employment, become members of the union on the sixtieth (60th) day fol- lowing the date of their employment, and shall remain mem- bers of the union in good standing during the life of this Agreement. 4.2 “Good standing”, for the purpose of this Agreement is interpreted to mean the payment or tendering of initia- tion fees and periodic union dues. ARTICLE 5 CHECK-OFF 5.1 The Employer agrees during the life of this Agree- ment to deduct from the net earnings due an employee in - 42a - the last pay period of each month the monthly dues and ini- tiation fees only on a check-off authorization form as out- lined below. Said authorization must be properly executed by the employee and presented to and accepted by the com- pany. All provisions contained in said form are agreed to by the (p. 6) company and the union and made a part of this Agreement. 5.2 The company agrees to remit such deduction to the secretary-treasurer of the union within twelve (12) days after the end of each month. VOLUNTARY CHECK-OFF FORM , 19 I certify that _ Union _ is my designated collective bargaining representative, and I hereby voluntarily autho- rize and direct _ Company _ to deduct from my earnings due me for the last pay period in each month my monthly Union dues for that month in the sum of $. and pay same to the secretary-treasurer of said Union. This authorization may be revoked by me at any time upon thirty (30) days notice to the Company and the Union or upon ter- mination of my employment. This authorization shall be sub- ject to any limitation required by law or regulation of any authorized governmental agency. (Employee) ACCEPTED: (Company) By (Form not valid until signature checked and authorization accepted by the Company). A form to Check-Off initiation fees will be prepared and submitted by the Union to the Company for approval. - 43a - ARTICLE 6 OVERTIME 6.1 Overtime at the rate of one and one-half (1 1/2) times the employee’s base hourly rate of pay for his classifications of work shall be paid under the following conditions. (1) For all hours in excess of eight (8) hours in any twenty-four (24) hour period. (p. 7) (2) For all hours worked in excess of forty (40) hours per week. (3) For ail hours worked on Saturday. Two (2) times the basic hourly rate of pay will be paid for all hours worked on Sunday. ~ 6.2 Overtime payment shall not be duplicated for the same hours worked under any of the terms of this Agree- ment, and to the extent that hours are compensated for at overtime rates under one provision they shall not be count- ed as hours worked in determining overtime under any other provision. 6.3 Overtime will be distributed as equally as possi- ble within each classification among employees who are qual- ified and substantially equally competent in performing the work involved. Employees will be expected to perform over- time assignments. 6.4 Employees will be given $3.50 in lieu of a meal when it is necesary to work in excess of ten (10) consecu- tive hours. It is understood that $3.50 will not be given when employees are scheduled to work ten (10) hour shifts. - 44a - ARTICLE 7 HOURS OF WORK 7.1 The work week shall start on Monday at 6:45 a.m. Forty (40) hours per week shall constitute a work week. Mon- day through Friday inclusive. 7.2 First Shift. Where more than one shift is worked, the first shift shall consist of eight (8) hours work exclusive of the one-half (1/2) hour lunch period, which shall be on the employee’s time. The pay for a full first shift period shall be a sum equivalent to eight (8) times the base hourly rate. 7.3 Second Shift. The second shift shall start immedi- ately after the first shift and shall consist of eight (8) hours work, exclusive of the one-half (1/2) hour lunch period, which shall be on the employee’s time. 7.4 Third Shift. The third shift shall be a seven (7) hour period with a lunch period on company time. 7.5 Shift Differential. Employees on the second and third full shift shall receive twenty cents ($.20) per hour pre- mium over and above their base hourly rate. 7.6 Employees will be given a ten (10) minute break during the first and second halves of the shift. 7.7 Employees shift preference by plant seniorty will be recognized, provided, skills, abilities, and (p. 8). perfor- mances needed are avaiable upon each shift to satisfactori- ly and properly satisfy job needs. ARTICLE 8 FIELD WORK 8.1 All field work performed away from the plant in - 45a - Albuquerque and immediate vicinity shall be at fifty cents ($.50) per hour over the employee’s regular rate. ARTICLE 9 HOLIDAYS 9.1 The following days shall be recognized as holidays under the terms and conditions of this Agreement, New Year’s Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, Friday following Thanks- giving Day, December 24th (Christmas Eve Day), Christ- mas Day and one (1) floating holiday. 9.2 All regular full-time employees covered by this Agreement shall receive pay at their straight time hourly rate for all hours they are normally scheduled to work on said holidays subject to the following conditions. Such em- ployee must have worked a complete eight (8) hour shift on which he was scheduled to work immediately preceding and following such holiday unless absent because of proven sick- ness or injury or the employee is excused by his supervisor prior to the holiday. 9.3 Inthe event any of the above enumerated holidays fall on Sunday, the following Monday shall be observed as the holiday. 9.4 Employees required to work on any of the above mentioned holidays shall be compensated for all hours worked at one and one-half (1 1/2) times their basic hourly rate of pay in addition to the holiday pay as above provided. 9.5 In the event that a holiday occurs during an em- ployee’s vacation period, the employee shall receive either pay at his straigh: time hourly rate for the hours he would normally have worked on said holiday, or will receive an additional day’s vacation and pay at the straight time hour- - 46a - ly rate for the hours he would normally have worked on said holiday. An employee must elect prior to going on vacation whether or not he desires to receive pay for the holiday or take an additional day’s vacation with pay. (p. 9) ARTICLE 10 REPORTING PAY 10.1 Any regular employee who worked on a given day and who was not notified not to report for work prior to his regular starting time on the following workday, and who subsequently reports for work on such following workday. and is then denied employment for such day, shall receive pay for four (4) hours’ time at his straight time hourly rate of pay. In the event an employee works in excess of four (4) hours he shall be guaranteed eight (8) hours’ work or eight (8) hours’ pay at his straight time hourly rate of pay. The guarantee set forth herein shall not apply where the plant, the department, or any given unit thereof, in which the em- ployee is regularly employed, is not capable of operation by reason of circumstances beyond the control of the company. ' ARTICLE 11 JURY PAY 11.1 Jury duty is an obligation and most important part of our democratic process. Employees who must perform jury duty shall be given a leave of absence for that purpose. The company policy is to make up the difference between the employee’s regular wage and the amount of remunera- tion that he may receive from the court. This payment will be made only upon receipt of adequate proof of payment from the court. ARTICLE 12 PENSION PLAN 12.1 It is agreed that the union employees of Eidal International Corporation represented by the International - 47a - Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers and Helpers of America, AFL-CIO, Local Lodge No. 338, join the Boilermakers, Blacksmiths Nation- al Pension Trust. Twenty-five cents ($.25) per employee per clock hour will be paid to the trust by Eidal International Corporation. Adjustment will be made in compensation paid to the employee by Eidal International Corporation as an offset of the cost to the company at the rate of fifteen cents ($.15) per hour. 12.2 It is agreed that the company will follow the Pension Plan as outlined in the booklet prepared by the Boilermakers- Blacksmiths National Pension Trust so that our plan will conform to all other plans represented (p. 10) by this trust. 12.3 Since the Pension Plan has been accepted by the union, the union will acknowledge that its pension benefits have been subject to Good Faith Collective Bargaining between Eidal International Corporation and the Union and the union acknowledges further that its members may be excluded from other employer-funded retirement plans under the provisions of the Internal Revenue Code. Section 410(b)2. ARTICLE 13 VACATION 13.1 The company will grant one (1) week’s vacation with pay (forty (40) hours at straight hourly rate) to all employees who have been in continuous service of the com- pany for a period of one (1) year preceding the period in which the vacation is to be taken. The company will grant two (2) weeks vacation with pay (eighty (80) hours at straight hourly rate) to all employees who have been in continuous service of the company for a period of three (3) years pre- ceding the period in which the vacation is to be taken. The company will grant three (3) weeks vacation with pay (one hundred twenty (120) hours at straight hourly rate) to all employees who have been in continuous service of the com- - 48a - pany for a period of ten (10) or more years preceding the period in which the vacation is to be taken. The company will grant four (4) weeks’ vacation with pay (one hundred sixty (160) hours at straight hourly rate) to all employees who have been in continuous service of the company for a period of eighteen (18) or more years preceding the period in which the vacation is to be taken. 13.2 Employees who are laid off for lack of work and who have at least one (1) year’s service with the company shall receive pro rata vacation on the basis of one-twelfth (1/12) of his annual vacation for each full month’s service since his last vacation eligibility date. Employees with less than one (1) year’s service are not eligible for pro rata vaca- tion pay. If they are recalled after layoff, they will be given credit for previous service for the purpose of qualifying for their first (1st) week’s vacation after completing one (1) year’s service. For example, if an employee had six (6) months ser- vice, was laid off then recalled, he would become eligible “ for (p. 11) vacation after completing six (6) month’s addi- tional service. When an employee is recalled after layoff, he will then begin qualifying for his next vacation. Employ- ees who voluntarily quit or who are discharged for just cause shall receive * 9 pro rata vacation pay. 13.3 The right to determine the vacation period shall rest with the company so as to insure the continuous and proper operations of its business. ARTICLE 14 SENIORITY 14.1 Seniority is defined as the length of service since the last date and hour of hiring. The date of hiring is the date the employee begins work. A seniority list, listing the employees according to their job classifications, shall be posted in the plant every three (3) months. The first sixty (60) days of employment with the company shall be on a pro- - 49a - bationary basis. No employees shall accrue seniority dur- ing the first sixty (60) days of employment with the company, and during such sixty (60) day period the employee shall be considered as on a probationary or trial basis. Upon suc- cessful completion of his probationary period, an employee shall acquire seniority from the date and hour of hiring. There shall be no responsibility for re-employment of pro- bationary employees if they are discharged or laid off dur- ing the probationary period. During the probationary period, an emloyee may be discharged with or without cause and shall not have recourse to the grievance procedure or to arbitration. 14.2 In the event of a layoff, the company shall desig- nate the number of employees in each classification to be laid off and the employees within each classification to be laid off and the employees within each classification with the least seniority shall be laid off first. The Shop Commit- tee and the Business Manager of the union will be given 78 hours notice of a layoff. An employee who is designated to be laid off, or who is bumped, may in lieu of layoff, bump any employee in a classification, if any, in which the employee has previously worked, who has less seniority with the com- pany, provided, in the opinion of management, the employee can satisfactorily perform the job he proposes to bump into. 14.3 Any employee who is recalled to work after layoff of one month or longer, or who returns to work (p. 12) after absence of one week or longer, due to accident or illness, may be required to take a physical examination on his own time at the com» any’s expense by a doctor selected by the company, and passing such examination shall be a condition _ of being returned to work. 14.4 Any employee taking a leave of absence or being laid off for a period of one month or longer shall upon request be given a physical examination prior thereto on his own - 50a - time by a company physician but at the company’s expense, the results of which examination shall be given the employee in written form. 14.5 When a permanent vacancy occurs in any classifi- cation, and if filled by promotion, it will be filled three days after posting, by promoting the employee in a lower paid classification who has the most seniority, provided that such employee, in the opinion of the company, is qualified to per- form the work. The employee who is promoted shall have a trial period of not to exceed thirty (30) days in his new clas- sification at the end of which the company can return him to his previous classification if, in the opinion of the compa- ny, he is not able to meet the requirements of his new clas- sification. The union shall be notified in writing as to the reasons for returning an employee to his previous classifi- cation. This provision shall not prohibit the hiring of quali- fied people to fill vacancies as they occur or to restrict the filling of a vacancy by transfers. 14.6 Employees promoted or transferred from the bar- gaining unit to positions with the company outside of the bargaining unit shall retain their accumulated seniority with- in the bargaining unit, but shall not accumulate additional seniority while working outside the bargaining unit. When the company has a vacancy in the classification of field ser- viceman, first consideration will be given to employees in the bargaining unit, but time worked as field serviceman will not count toward bargaining unit seniority. 14.7 Seniority shall terminate for any one of the fol- lowing reasons. (1) Voluntary quitting. (2) Discharge for cause. If the discharged employee is - 5la - reinstated after a hearing, he shall be reinstated with senior- ity right unimpaired. (3) Failure to keep Company advised of address dur- ing period of layoff. (p. 13) (4) Separation from the Company’s employment by layoff for a period of one year, if the employee has one year or more service with the Company. (5) In all other caSes, after the employee has served his probationary period, separation from the Company’s employment by layoff in excess of the number of days of the individual’s service with the Company. In case of a bona fide sickness, the Company, at its dis- cretion may extend the time provided for above. 14.8 All seniority granted employees under the terms of this Agreement shall be subject to the rights granted by law to employees who volunteer or are called or censcripted for active military service under the National Guard Act of 1940, the Selective Training Act of 1948, and any additions or amendments thereto, or rulings and interpretations there- of by any authorized court or agency. ARTICLE 15 ADJUSTMENT OF GRIEVANCES 15.1 The union shall designate a Shop Committee of not more than five (5) employees for the purpose of taking up grievances of employees with the managemeiit. The union shall notify the company of the personnel of this Shop Com- . mittee and of any subsequent changes in the personnel. The union agrees in selecting the members of the Shop Com- mittee that length of service with the company shall be taken into consideration, and men of not less than ninety (90) days’ continuous service shall be selected, if available. The com- - 52a - pany will recognize such Shop Committee and deal with it as the representative of the union on all grievances or dif- ferences as to the meaning or application of any provisions of this Agreement. 15.2 If any grievance, dispute or controversy as to the meaning or application of any provision of this Agreement arises, or should any trouble of any kind arise in the plant, there shall be no suspension of work on that account, but an earnest effort shall be made to adjust the same. It is understood and agreed by the parties hereto that in the interests of harmony, grievances should be presented and handled in an orderly manner. No grievance shall be con- sidered that has not been handled in accordance with the time (p. 14) provisions set forth herein. The company, in the interests of prompt handling of grievances, agrees that the members of the Shop Committee, upon duly notifying their foreman, shall be allowed to leave work for grievance meetings. A member of the Shop Committee called by the company from his home for grievance meetings shall be compensated for actual hours in the meeting only, at his reg- uJar hourly rate of pay, exclusive of overtime or shift pre- miums, by the company. The grievance procedure shall be as follows: Step 1. Between the aggrieved employee and his de- partment foreman. Step 2. If no satisfactory adjustment is thus reached, the aggrieved employee may call in a steward thus endeavor to settle the dispute with the department foreman who may call in his superior in the supervisory force. 15.3 Any grievance shall be presented in both Steps 1 and 2 within twenty-four (24) hours after its occurrence. Pro- vided the matter is not adjusted satisfactoriiy, it shall th [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_0376%3A1. Public record. Not legal advice.