Opposition Brief — Panter v. American Synthetic Rubber Corp.

JS Supreme Court, U.S,

No. 87-2078 FILED

14 1988

JOSEPH F. SPANIOL, Jf

CLERK

SUPREME COURT oF H.R UNITED STATES

October Term, 1988

“acme FS

GORDON PANTER, JIM MALLORY, LEO

VINCENT, J.J. EDRINGTON, JOE TEDE-

SCUCCI, R. L. FRENCH, JOHN W. VOGT,

TILFORD WAGERS, _ — KEN-

NETH PEARL - ° : Petitioners

AMERICAN SYNTHETIC RUBBER CORPO-

RATION, and

UNITED RUBBER, CORK, LINOLEUM AND

PLASTIC WORKERS OF AMERICA, Local

423 and

UNITED RUBBER, CORK, LINOLEUM AND

PLASTIC WORKERS OF AMERICA, Inter-

national Union AFL-CIO-CLC - - Respondents

UNIONS’ BRIEF IN OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI TO THE

SIXTH CIRCUIT COURT OF APPEALS

JOHN FRITH STEWART

DENNIS FRANKLIN JANES

SEGAL, ISENBERG, SALES, STEWART

& CUTLER

Third Floor, Marion E. Taylor Building

312 Fourth Avenue

Louisville, Kentucky 40202-3008

Telephone: (502) 568-5600

Counsel for Respondent Unions

WESTERFIELD-SONTE CO., 619 W. KENTUCKY=-P.O. BOX 3251, LOUISVILLE, KY.

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QUESTIONS PRESENTED FOR REVIEW

The questions presented for review in the petition are

these:

1. Are laid-off employees who have allowed their un-

ion membership to lapse eligible to participate in the rati-

fication of a new collective bargaining agreement between

their former union and their former employer?

2. Are the negotiated recall rights of laid-off employees

protected from modification through subsequent collective

bargaining?

3. Does a eolleetively-bargained entitlement to sever-

ance pay survive the expiratio® of the collective bargaining

agreement that created the entitlement?

4. Does an exelusive bargaining representative breach

its duty of fair representation by negotiating and ratify-

ing a new eollective bargaining agreement with the em-

ployer of the employees in its bargaining unit?

Each issue should be answered in the negative.

TABLE OF CONTENTS

PAGE

Questions Presented For Review ................... i

Table of Authorities ..... 6 .0.cickcscecieeee 2. Liv

Opinions Below ........... OEE PE PO Peer 1

Pertinent Statutes and Regulations ................ 1- 2

Statement of Tint Gow. «6 scencccscindineeeeneeeons 1-7

Reasons For Denying The Writ ................... 7-18

g. Samameeey,. on cd cacake sss as thenk ee 7

b. The Petitioners Were Not Entitled to Partici-

pate In The Ratification Of The Unions’ 1984

Contract With The Company. ................ 8-13

: e. The Petitioners’ Recall Rights Were Subject To

. Modification Through Collective Bargaining. . .13-15

d. The Unions Have Not Breached Their Duty of

Fair Representation. . ...00.+4504650eue bane 15-17

e. The Petitioners’ Rights To Severance Pay Are

Not Protected From Modification By ERISA.. .17-18

Gemtiesiom 6.2. va bkscecksneeen 18

GertiGeetes of Borvlen . oo csc. cok ocean eel cee ees 19

pO TC TPE E TEC TTa ET rr ee ne Oe la—42a

A. Decisions of the United States District Court

B. Pertinent Statutes and Reeculations

il

TABLE OF AUTHORITIES

Cases: PAGE

Adams v. Budd Company, 349 F. 2d 368 (3rd Cir.

ee ad pops e* end sen as eas 15

Alvey v. General Electric Company, 622 F. 2d 1279

ee aS po ites daeesseus sien 9, 10

Baldini v. Local Union No. 1095, UAW, 581 F. 2d

ee nanan eee be anes 11, 12

Brennan v. Local 357 v. International Brotherhood

of Teamsters, 709 F. 2d 611 (9th Cir. 1983) ...8, 9,10

Charland v. Norge Division, Borg-Warner Corpora-

tion, 407 F. 2d 1063 (6th Cir. 1969) ........ .. wD

Christopher v. Safeway Stores, Inc., 103 LRRM 2018

ea ce sc knee wn acta esescs 13

Cleveland Orchestra Committee v. Cleveland Fed-

eration of Musicians, 303 F. 2d 229 (6th Cir.

EG ak a 12

Ford Motor Company v. Huffman, 345 U.S. 330

EU e gos ona 6.60 608 bees aoe Gee © 16

Gray v. International Association of Heat and Frost

Insulators and Asbestos Workers, 447 F. 2d

OTS oy cance ss bh eev vane’ 12

Humphrey v. Moore, 375 U.S. 335 (1964) ......... 16

International Brotherhood of Boilermakers vy.

Hardeman, 401 U.S. 233 (1971) .............. 8

Leskiw v. IBEW, 464 F. 2d 721 (3rd Cir. 1972) ... 15

Local 1251, UAW vy. Robertshaw Controls Co., 405

he ES b. | rr 15

Newgent v. Modine Manufacturing Company, 495

Ae Bie os ee oe) 11, 12

NLRB vy. Allis-Chalmers Mfg. Co., 388 U.S. 175

in cae iba cake bac ee eane 8

NLRB v. Crompton-Highland Mills, Inc., 337 U.S.

Ns ge el lah dee gd abe awe 17

NLRB vy. Financial lustitution Employers of Amer-

SP UNER Wi OO CRM) osc vec eeseseereeces 8

iv

PAGE

NLRB v. Katz, 369 U.S. 736 (1962) .............. 17

Rupe v. Spector Freight Systems, 679 F. 2d 685

ey, kA | re ee ee 11

Shamblin v. General Motors Corporation, 473 ¥. 7

— eee err yer rr F 15

Sutton v. Weirton Steel, 724 F. 2d 406 (4th Che

PEE tren aud oo ce aoe ae tak ORR Re ae 18

Tayler v. Great Lakes Seaman’s Union, 701 F. 2d

er CU RG Rs cn cnccaescumacbpawenues 8, 9, 10

United Auto Workers v. Yard-Mamn, Inc., 716 F. 2d

BEG Ce CO TUE oun os bee cease sacianecs re | eT

West v. Butler. 621 F. 2d 240 (6th Cir. 1980) ...... 18

White Farm Equipment Co. v. White Motor Corp.,

788 F. 2d 1186 (6th Cir. 1986) ............... 14, 18

Williams v. International Typographical Union, 423

a Bae (ee Ca BI ss aeccaenwrishcua 9,10

Statutes:

eee ID occ s ou a a kc kee hs weak ena ens 15

_ Rat toe ree arn e hier 1,7, 10

| i ns kaa cme s Hane Ae Ae aKa 1, 7, 8,9

Be a reer ieee ran neces 1, 7, 8,9

Oe eh, ED nh docks ch va teeleer ain ceeuuweeas 12

WE onc ko vkvacsacevanncxacacsesss 12

ee Res NED 6k ove Sob Ae ee Cetee es cas acendads 1,18

Ob WG, G208E1T) ...... 5 0c cnnncccacdscccsas’ 1,18

Ser, I a deo xn e cae us veva a bee RON a eA 18

Regulations:

PN I in cy eis eta ea ala ca panne 1, 10

Br EE 5 kv sk a wine ab viaulae seu dit ieruas 1,10

No. 87-2078

SUPREME COURT OF THE UNITED STATES

October Term, 1988

GORDON PANTER, JIM MALLory, LEO VIN-

CENT, J. J. EDRINGTON, Jor TEDESCUCCTI,

R. L. FrRENcH, JOHN W. Voct, TILForD

Wacers, JIM BurRNS, KENNETH PEARL - Petitioners

We

AMERICAN SYNTHETIC RUBBER CORPORA-

TION, and

Unitep Rvusper, Cork, LINOLEUM AND

Piastic WoRKERS OF AMERICA, Local

423 and

UnITeED RvuBBER, CorRK, LINOLEUM AND

Puastic WoRKERS OF AMERICA, INTER-

NATIONAL Unton AFL-CIO-CLC - Respondents

UNIONS’ BRIEF IN OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI TO THE

SIXTH CIRCUIT COURT OF APPEALS

OPINIONS BELOW

Most of the written decisions of the United States

District Court for the Western District of Kentucky

were omitted from the appendix attached to the peti-

tion. The omitted decisions are appended to this brief

as Appendix A.

PERTINENT STATUTES AND REGULATIONS

In addition to the statutes specified in the petition,

this case involves the application of the statutes and

2

regulations listed below and reproduced in Appendix

B: 29 U.S.C. §§402(0), 411, 412, 1002(1) and 1051(1) ;

29 CFR §§452.86, 452.92.

STATEMENT OF THE CASE

Under the provisions of Article VII, §5(a)(4),

of the Unions’ Constitution, the Respondent Unions

‘*shall’’ issue an Honorable Withdrawal and Transfer

Certificate to a union member ‘who is laid off and fails

to request dues exemption in accordance with Article

VI, §3, Paragraph (b). . . .”’ Article VII, §5(d), of

the Constitution provides that ‘‘[m]Jembers to whom

Honorable Withdrawal and Transfer Certificates have

been issued forfeit all rights and privileges in the Local

Union and the URW.”

Under the provisions of Article VI, $2, of the Con-

situation, each member of the Unions must make a

monthly dues payment to the Unions. Article VIT, §3,

provides that an arrearage of three months in the pay-

ment of dues causes a member to ‘‘automatically for-

feit all rights and good standing in the Local Union

and in the URW.’’ However, Article V1, $3, provides

that Union members on layoff who have *‘recall rights”’

may obtain an exemption from their dues obligation.

The exemption is renewable at ninety-day intervals.

Petitioners were laid off in 1981 by the American

Synthetic Rubber Corporation due to a lack of work.

The Petitioners paid no union dues after their layoff.

Gordon Panter was the onlv Petitioner who requested

. j

and received a dues exemption. Panter never re-

3

quested an extension of this initial ninety (90) day

exemption. Therefore, all of the Petitioners, except

Panter, were removed from the membership rolls of

the Unions after they had fallen three months behind

in the payment of membership dues. Panter was re-

moved from the Unions’ membership rolls three months

after his dues exemption expired.

Almost two years after all of the Petitioners had

giver: up the rights and privileges of Union member-

ship, the Unions and American Synthetic Rubber Com-

pany began negotiations for a new collective bargain-

ing agreement. Negotiations began on January 6, 1984.

On December 29, 1983, the Company had informally

advised the Unions that its major objective in the nego-

tiations was to terminate the recall rights of Jaid off

employees. Even at that early point, the Company

had determined that it was prepared to face a strike,

if necessary, in order to obtain a termination of the

laid off employees’ recall rights. Under the 1981 eol-

lective bargaining agreement that expired on March 1,

1984, the Petitioners’ right to be recalled from layoff

was subject to no explicit temporal limitation.

The local Union immediately notified each Peti-

tioner of the Company’s bargaining position on the

recall issue. It was not until after Local Union Presi-

dent Stringfield had met with all the Petitioners, that

the Union and Company exchanged their first bargain-

ing proposals with respect to the Petitioners’ rights

of recall. The Local Union went to great lengths to

4

keep the Petitioners advised throughout the bargain-

ing process.

Even after the laid off employees relinquished their

membership in the Unions, they were extended every

courtesy by the Unions, except the right to vote on mat-

ters of Union business. They were allowed to attend

and speak at Union meetings. However, none of the

Petitioners were ever allowed to vote on any matter

of official business brought before the membership at

any Union meeting conducted after they relinquished

their Union membership. Only one laid off employee,

Dohoney, not a Petitioner in this action, testified that

he had ever been permitted to vote at a Union meeting

subsequent to receiving an Honorable Withdrawal and

Transfer Certificate. However, Dohoney admitted that

nobody had ever raised a question as to his eligibility to

vote at any of the meetings. Nor was he able to testify

that he ever had cast the deciding vote on any matter

subject to a referendum of the membership.

The Unions never *‘ prepared and agreed’’ upon any

list of employees who were to lose recall rights and be

denied a vote upon the ratification of a new agreement.

The record is clear that these lists were prepared by

the Company.

During negotiations, the Unions diligently sought

to prevent the Company from limiting the Petitioners’

right of recall from layoff. Donald Schmidt, the Com-

pany’s Director of Manufacturing, testified before the

district court that the Unions’ were vocal throughout

the negotiations in their efforts to preserve the Peti-

5)

tioners’ recall rights. ‘The Unions proposed compro-

mises on other issues in an effort to persuade the Com-

pany to modify its position with respect to the question

of recall. These Union proposals included offers to

relinquish other rights previously granted by the Com-

pany. But not even these efforts were successful. The

Company rejected the Union’s offers of compromise.

Not even the assistance of a federal mediator was suffi-

cient to cause the Company to alter its position. The

mediator advised the Unions that the Company would

never change its position with respect to the issue of

recall.

After weeks of hard bargaining, the Company, not

the Unions, first proposed treating the recall rights of

laid-off workers differently from the recall rights held

by employees who were then actively employed. The

Company’s ‘‘last, final and best offer,’’ dated March 1,

1984, proposed the termination of the rights of recall

held by employees who were laid off at that time.

At the time they were laid off, the Company gave

the Petitioners and other similarly situated employees

the option of terminating their employment and receiv-

ing severance pay, or declining severance pay and

awaiting recall to employment. Of the approximately

150 employees who were laid off, only the Petitioners

declined the Company's offer of severance pay. The

Company asserted that if its ‘last, final and best offer’’

were ratified by the Unions’ membership, the Petition-

ers’ eligibility to receive severance pay upon resigna-

tion would terminate. The Petitioners would no longer

6

be laid off employees; they would be former employees.

After consultation with the Unions’ legal staff, the

Unions proposed that the Petitioners’ eligibility for a

severance award be extended for a period of thirty

days following any ratification of the Company’s ‘‘last,

final and best’’ proposal. However, the Company was

willing to extend the Petitioners’ eligibility for only

a period of 48 hours.

The Unions’ bargaining committee submitted the

Company’s ‘‘last final and best’’ proposal to a ratifi-

eation vote of the Unions’ membership on March 7,

1984. The bargaining committee did not recommend

either acceptance or rejection of the Company’s pro-

posal. The Company’s proposal was approved by the

Unions’ membership by a vote of 79 to 7. Even if the

Petitioners had east votes against ratification of the

1984 agreement, the contract would have been approved

by over 81% of the Union members who voted. A

simple majority was sufficient to ratify the agreement.

The Petitioners were not permitted to speak or vote

at the March 7, 1984, ratification meeting. Local Union

President Stringfield had explained to the Petitioners

in January, 1984, that they would not be permitted to

vote on the ratification of a new contract under the pro-

visions of the Unions’ constitution. Stringfield for-

bade the Petitioners from speaking at the March 7,

1984, meeting because be *‘didn’t want an ugly situa-

tion to develop.’? The Union’s membership had been

‘tin a boisterous mood, uncontrolling, uncontrollable,”’

in a meeting conducted on March 1, 1984, at which the

7

Petitioners were allowed to speak. Stringfield felt

that *‘the possibility that a conflict between the regular

members and these members [the Petitioners] on the

issue of striking was a highly emotional issue, and I

felt it could get out of control.’’ The Petitioners had

been given an opportunity to voice their opinions at all

previous Union meetings.

REASONS FOR DENYING THE WRIT

ARGUMENT

a. Summary

No important questions of federal law are presented

by the Petition. The circuit courts of appeal are in

agreement in holding that the claims asserted by the

Petitioners merit no relief.

Petitioners have no enforceable rights under the

provisions of 29 U.S.C. §§411 or 412 because they are

not ‘‘members”’ of the Unions, within the meaning of

29 U.S.C. §402(0). The Unions did not unfairly rep-

resent the Petitioners’ interests in their efforts to cope

with the Company’s hard bargaining position on the

subject of recall rights. The Union’s compliance with

the will of the majority of the bargaining unit was

not arbitrary, discriminatory, or in bad faith. The

Unions did not deprive the Petitioners of severance

pay. Petitioners alleged entitlement to severance pay

benefits is not vested under the provisions of ERISA.

8

b. The Petitioners Were Not Entitled to Participate In

The Ratification Of The Unions’ 1984 Contract With

The Company.

Petitioners have presented no valid claim under the

provisions of 29 U.S.C. §412 for vindication of rights

secured by the provisions of 29 U.S.C. §411. ‘‘[If] an

individual has failed to comply with the membership

requirements of a labor organization, that individual

may not obtain relief under the Act.’’ Brennan v.

Local 357, International Brotherhood of Teamsters,

709 F. 2d 611, 614 (9th Cir. 1983). ‘‘Non-union em-

ployees have no voice in the affairs of the Union.”’

NLRB vy. Financial Institution Employees of America,

475 U.S. 192, 205 (1986); NLRB vy. Allis-Chalmers

Mfg. Co., 388 U.S. 175, 191 (1967). Here, the Petition-

ers have not stated a valid claim under the provisions of

29 U.S.C. $412 because they had not fulfilled their dues

obligation, nor obtained an exemption from that obli-

gation, and were not ‘‘members’”’ of the Unions on

March 7, 1984, when they were forbidden from speak-

ing and voting on the Company’s “‘last, final and best”’

contract proposal.

‘*Tt is well settled that a union’s consistent interpre-

tation of its own constitution will not be disturbed by

a federal court unless the challenged regulation is ‘un-

reasonable.’’’ Tuylor v. Great Lakes Seaman’s Union,

701 F. 2d 590, 592 (6th Cir. 1983); see, International

Brotherhood of Boilermakers v. Hardeman, 401 U.S.

233 (1971). Here, the constitution binding the Unions

and the Petitioners, as members of the Unions, re-

quired the Petitioners to make monthly dues payments

9

in order to maintain their membership. Unless the

Petitioners obtained a dues exemption, then either

issuance of an Honorable Withdrawal and Transfer

Certificate, or an arrearage of three months in the

payment of dues, automatically resulted in the termi-

nation of their membership rights. Under these cir-

cumstances, the federal appellate courts agree that the

Petitioners had no rights under 29 U.S.C. §412. Taylor

v. Great Lakes Seaman’s Union, 701 F. 2d 590 (6th

Cir. 1983); Brennan v. Local 357, International Bro-

therhood of Teamsters, 709 F. 2d 611 (9th Cir. 1983) ;

Williams v. International Typographical Union, 423

F. 2d 1295 (10th Cir. 1970).

The import of these cases is made all the more

apparent by comparing them with the decisions upon

which the Petitioners place primary reliance.

In Alvey v. General Electric Company, 622 F. 2d

1279 (7th Cir. 1980), a union forbade laid off employees

from voting upon a proposal to modify seniority rules

which would have directly affected their priority for

recall. The laid off union members were prevented

from voting because the union’s constitution provided

that ‘‘only members in good standing may participate

in union affairs’? and members could maintain their

good standing only by making timely dues payments.

Under the provisions of that union constitution, ‘‘not

only were laid off members not required to pay dues,

but they were prohibited from making a voluntary

payment of dues in order to maintain their good stand-

ing.”’ Id. at 1283 (emphasis added). Under that

constitutional provision, ‘‘members on layoff are barred

10

from participating in all union matters regardless of

their willingness to pay dues... .’’ Id. at 1285.

Alvey is distinguishable from the circumstances

existing in this case. In Alvey, the union members’

ineligibility to vote was thrust upon them, regardless

of their willingness to satisfy their dues obligation.

Here, the Petitioners were ineligible to vote upon the

Company’s ‘‘last, final and best’? contract proposal

because the Petitioners chose not to tender dues pay-

ments to the Unions,’ and chose not to avail themselves

of the dunes exemption available under the provisions

of the constitution. The Petitioners here, like the com-

plaining union members in Taylor, Brennan, and Wil-

liams, had options available to them which would have

insured their right to participate in the voting. In

choosing not to avail themselves of those options, the

Petitioners voluntarily withdrew from membership in

the Unions and relinquished their rights under 29

U.S.C. §411. See, 29 U.S.C. §402(0).

Local Union President Stringfield testified that he

advised the laid off employees of their right to make a

written request for a dues exemption. The official

minutes of the Unions’ meeting of December 4, 1980,

indicate that the dues exemption provisions of the con-

stitution were explained to the Unions’ membership at

that meeting. However, even if the dues exemption

provisions of the constitution had never been explicitly

129 CFR §§452.86 and 452.92 may have preserved the Peti-

tioners’ rights of membership, if they had chosen to tender the

necessary dues payments. Petitioners did not comply with these

regulations.

11

pointed out to the Petitioners, the Petitioners would

still be bound by the provisions of the Constitution.

In Baldini v. Local Union No. 1095, VAW,581 F. 2d

145 (7th Cir. 1978), overruled on other grounds, Rupe

v. Spector Freight Systems, 679 F. 2d 685 (7th Cir.

1982), and Newgent v. Modine Manufacturing Com-

pany, 495 F. 2d 949 (7th Cir. 1974), overruled on other

grounds, Rupe v. Spector Freight Systems, supra, dis-

charged employees brought suit against their unions

alleging a breach of the unions’ duty of fair represen-

tation. The Petitioners attempted to explain their

failure to exhaust available intra-union remedies by

asserting that (1) they were unaware that the intra-

union remedies were available and (2) union officials

had misled them with respect to the availability of such

remedies. In Newgent, the president of the union had

advised Newgent that ‘‘further intra-union steps would

be senseless and fruitless.’’ 495 F. 2d at 922. In

Baldini, a union official had advised Baldini that

‘‘nothing more could be done for him”’ after the union

failed to meet a contractual deadline for the submis-

sion of Baldini’s dispute to arbitration. 581 F. 2d at

148.

In both Baldini and Newgent, it was held that a

union member assumes the responsibility of becoming

aware of the obligations imposed upon him under the

terms of his union’s constitution and bylaws. A union

2Rupe overruled Baldini and Newgent in order to comply with

Clayton v. UAW, 451 U.S. 679 (1981). 679 F. 2d at 690-691.

Baldini and Newgent still support the general principal that a

union member is bound to comply with the requirements of his

union’s constitution.

12

member is not entitled to rely upon misstatements of

union officials as an excuse for his ignorance of the

relevant provisions of his union’s constitution. Union

constitutions are public records, freely available from

the United States Secretary of Labor. See, 29 U.S.C.

§§431(a) and 435. This fact, together with a union

member’s obligation to thoroughly familiarize himself

with the provisions of the union’s constitution, render

alleged misstatements of union officials immaterial.

O81 F. 2d at 148; 495 F. 2d at 927-928.

Gray Vv. International Association of Heat and Frost

Insulators and Asbestos Workers, 447 F. 2d 1118 (6th

Cir. 1971) is consistent with the Baldini and Newgent

decisions. There, it was held that the acceptance of an

application for union membership, when considered

together with the provisions of the union’s constitution

and bylaws, constitutes a written contract binding the

union and its members. ‘‘By becoming a member of a

union, the worker, in effect, makes a contract that he is

to be governed by the constitution and by-laws of the

organization.’’ Cleveland Orchestra Committee v.

Cleveland Federation of Musicians, 303 F. 2d 229, 230

(6th Cir. 1962). Therefore, the Petitioners in this case

were contractually bound to adhere to the provisions of

the Unions’ Constitution.

Had the Petitioners in this case adhered to the pro-

visions of the Unions’ Constitution, the Petitioners

would now have no claim against the Unions. Cleariy,

it is their own failure to apply for and maintain a dues

exemption that is the source of their present plight.

13

Christopher v. Safeway Stores, Inc., 103 LRRM

2018 (E.D. Tex. 1979), cited by the Petitioners, held

that a local union violated its own constitution, and

29 U.S.C. §411, by negotiating a new collective bargain-

ing agreement which changed the manner in which its

members’ seniority credit was computed, without noti-

fying the affected members of the negotiated change or

allowing those members to vote upon its ratification.

Here, the Unions hid nothing from the Petitioners.

Nor did the Unions violate their constitution. Rather,

the Unions advised the Petitioners, months in advance

of the contract ratification, of the company’s assault

upon the Petitioners’ recall rights and that the Unions’

constitution did not entitle the Petitioners to voting

rights with respect to the new agreement. The Peti-

tioners sought no intra-union appeal from the ruling

regarding their right to vote. Christopher is distin-

guishable on this basis.

c. The Petitioners’ Recall Rights Were Subject To

Modification Through Collective Bargaining.

The Petitioners argue that their reeall rights were

‘status benefits’? which the Unions and Company in-

tended to irrevocably vest in the Petitioners in the

manner described in United Auto Workers vy. Yard-

Man, Inc., 716 F. 2d 1476 (6th Cir. 1983). Petitioners

cite no decision extending the Yard-Man rule to con-

tractual rights unrelated to pension benefits. Public

policies reflected in ERISA demonstrate that pension

benefits are entitled to special protection. However,

those policies do not necessarily afford similar protee-

i4

tion to all negotiated benefits. See, e.g., White Farm

Equipment Co. v. White Motor Corp., 788 F. 2d 1186

(6th Cir. 1986).

If the Yard-Man rule were extended to all contrac-

tual benefits negotiated by an employer and union, the

parties to a collective bargaining agreement would

never be able to modify the provisions of their agree-

ment as changing conditions require. Contractual

rights created in one agreement would become perman-

ently vested in the employees covered by that agree-

ment, depriving the contracting parties of their discre-

tion to modify those contractual rights in future agree-

ments. Extension of the Yard-Man rule to benefits

unrelated to pensions threatens the concept of collec-

tive bargaining. Individual members of the bargaining

unit would enjoy different, irrevocable employment

benefits, established over the course of their respective

employments, in dozens of different and conflicting

labor agreements.

Further, the collective bargaining agreements exe-

cuted by the Unions and Company in this case do not

indicate that it was a parties’ intention to make the

Petitioners’ recall rights irrevocable. Article XXIV

of the 1981 agreement provided that all provisions of

the agreement were subject to modification through

negotiation. Although the record does not support the

Petitioners’ assertion that their allegedly unlimited

recall rights were incorporated into every bargaining

agreement executed since 1959, if we assume this con-

tention to be true, it would be apparent from the re-

peated negotiation of such a contract provision that the

15

parties never intended the recall rights originally

negotiated in 1959 to be irrevocable. Why else would

they have bothered to include a recall provision in

every bargaining agreement negotiated since 1959?

An employee’s seniority rights arise exclusively

from the labor-management agreement. These rights

are not vested. ‘‘The incidents of seniority can be

freely altered or amended by modification of the collee-

tive bargaining agreement.”’ Charland v. Norge Divi-

sion, Borg-Warner Corporation, 407 F. 2d 1063, 1064

(6th Cir. 1969) ; Local 1251, UAW vy. Robertshaw Con-

trols Co., 405 F. 2d 29, 33 (2nd Cir. 1968).

d. The Unions Did Not Breach Their

Duty Of Fair Representation.

Although the Petitioners allege federal jurisdiction

under 29 U.S.C. §185(a) and claim that the Unions

breached their duty of fair representation, Petitioners

have neither alleged nor proven any ‘‘violation of con-

tracts between an employer and a labor organization

. or between any such labor organizations .. .,’’ the

jurisdictional faet upon which suits under §185(a)

must be based. Rather, the Petitioners complain of

the Unions’ negotiation, execution and compliance with

such a contract. Obviously, 29 U.S.C. §185(a) cannot

be the source of the Petitioners’ ‘‘fair representation”’

claim, nor the jurisdictional basis of this action. Adams

v. Budd Company, 349 F. 2d 368 (3rd Cir. 1965) ;

Leskiw v. IBEW, 464 F. 2d 721 (3rd Cir. 1972), cert.

den., 409 U.S. 1041 (1972).

16

The true essence of the Petitioners ‘‘fair represen-

tation’’ claim is merely their dissatisfaction with the

actions taken by a majority of the collective bargaining

unit in ratifying a new contract with the Company.

Their dissatisfaction is not sufficient to support this

lawsuit. Ford Motor Company v. Huffman, 345 U.S.

330 (1953) ; Humphrey v. Moore, 375 U.S. 335 (1964) ;

Shamblin v. General Motors Corporation, 743 F. 2d

436 (6th Cir. 1984).

... [We are not ready to find a breach of the

collective bargaining agent’s duty of fair repre-

sentation in taking a good faith position contrary

to that of some individuals whom it represents nor

in supporting the position of one group of em-

ployees against that of another. . . . Conflict be-

tween employees represented by the same union is

a recurring fact. To remove or gag the union in

these eases would surely weaken the collective

bargaining and grievance processes.

Humphrey v. Moore, supra at 349-350.

Here, the Unions were faced with only two options:

accept the Company’s last, final and best offer or strike.

The Unions’ negotiating committee turned the decision

over to the membership without a recommendation.

The membership decided, by a vote of 79 to 7, not to

strike.

Petitioners argue that the Unions’ bargaining coim-

mittee breached a duty owed to the Petitioners by fail-

ing to persuade an unwilling majority of the Unions’

membership to reject the employer’s “‘last, final and

best offer’? and initiate a strike. Petitioners claim

a

17

that their right to be recalled from layoff would have

been preserved by this course of action. This claim is

false. After several months of hard bargaining, the

Company's clearly-stated bargaining position remained

unchanged : The recall rights of laid off employees must

be terminated, regardless of the Unions’ threat to

strike. Under these circumstances, it is quite likely

that rejection of the employer’s “last, final and best”’

contract proposal, and the initiation of an economic

strike, would have resulted in nothing other than a

bargaining impasse on the recall issue. Such an im-

passe would have authorized the employer to imple-

ment its “‘last, final and best’’ offer regardless of the

Unions’ opposition. NLRB v. Katz, 369 U.S. 736

(1962); NLRB v. Crompton-Highland Mills, Inc., 337

U.S. 217 (1949). Beeause no option available to the

Unions could have insured the preservation of the

Petitioners’ recall rights upon the expiration of the

1981 bargaining agreement, there was no justification

for the Petitioners’ insistence on a strike that was

disfavored by the vast majority of the Unions’ mem-

bership.

e. The Petitioners’ Rights To Severance Pare Are

Not Protected From Modification by ERISA.

The Unions did not interfere with the Petitioners’

attainment of severance pay due them under the 1981

collective bargaining agreement. Rather, the Unions

negotiated an extension of those rights beyond the

termination date of the 1981 agreement. The Unions

18

enhanced, rather than hindered, the Petitioners’ op-

portunity to receive severance pay.

Moreover, the Petitioners had no vested rights in

the severance pay benefits made available under the

1981 agreement. The ‘‘vesting’’ provisions of ERISA

do not apply to ‘‘an employee welfare benefit plan,’’ as

defined in 29 U.S.C. §1002(1). 29 U.S.C. §$1051(1) ;

White Farm Equipment Company v. White Motor

Corporation, 788 F. 2d 1186, 1191-1193 (6th Cir. 1986).

Because the Petitioners’ severance pay benefits were,

if anything, a ‘‘welfare benefit,”’ those benefits were

subject to modification through collective bargaining.

29 U.S.C. §1140 protects only vested rights, not a ‘‘wel-

fare benefit’’ such as severance pay. See, Sutton v.

Weirton Steel, 724 F. 2d 406, 410-411 (4th Cir. 1983) ;

West v. Butler, 621 F. 2d 240, 245 (6th Cir. 1980).

CONCLUSION

For these reasons, the writ should be denied.

Respectfully submitted,

Seca, IseENBERG, SALES, STEWART & CUTLER

JouN FritH STEWART

DENNIS FRANKLIN JANES

Third Floor, Marion E. Taylor Building

312 Fourth Avenue

Louisville, Kentucky 40202-3008

Telephone: (502) 568-5600

Counsel for Respondent Unions

APPENDIX

eC ee

la

APPENDIX A

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. C 84-0293 L(A)

Gorpon Panter, et al, - - - - - Plaintiffs,

7.

AMERICAN SYNTHETIC RUBBER

CorPorRATION, et al., - - - - Defendants.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND

MEMORANDUM OPINION—Entered Dec. 17, 1984

Gordon Panter and nine (9) other former employees of

American Synthetic Rubber Corporation, hereinafter ASRC,

bring this action against ASRC and the United Rubber,

Cork, Linoleum and Plastic Workers of America, Interna-

tional Union, hereinafter URW International Union, and

its affiliate, Local 423, hereinafter Local 423. Panter and

the other plaintiffs are former union members. Plaintiffs

allege jurisdiction under 29 U.S.C. $185, the Labor Manage-

ment Relations Act (LMRA), 29 U.S.C. §401 e¢ seq.,

the Labor Management Reporting and Disclosure Act;

(LMRDA), and, in their amended complaint, under KRS

344, the Kentucky Civil Rights Act, by pendent jurisdiction.

The case is before the Court on plaintiffs’ motion for

injunctive relief requiring ASRC to reinstate them to their

former positions, and on the defendants’ motions for sum-

mary judgment. We will resolve these issues in order.

2a

In March of 1981, ASRC and Local 423 entered into a

collective bargaining agreement which provided that all

employees with two or more years of seniority had un-

limited recall rights upon layoff. The agreement expired

on March 1, 1984, at which time ASRC and Local 423 nego-

tiated a new collective bargaining agreement. The new

agreement terminated the recall rights of all employees

who had been on layoff for more than two years, and pro-

vided severance pay for all laid-off employees who agreed

to waive any claim to further employment. The plaintiffs

were among those affected by this agreement, because they

were on layoff at that time and, for the most part, had been

on layoff since the summer of 1981. Almost all the plain-

tiffs are over forty years of age.

After negotiating the new contract, the union leader-

ship submitted the proposed agreement to a ratification

vote by the union membership. The union leadership re-

fused the plaintiffs both the right to speak at the meeting,

as well as the right to vote on the proposed agreement.

The union membership ratified the proposed contract by a

sufficient margin, so that the plaintiffs’ votes would not

have changed the result. Subsequently, the plaintiffs filed

this action, alleging a breach of contract against ASRC, a

breach of the duty of fair representation, and a violation

of the union members’ “bill of rights” against Local 423

and the International Union, and age discrimination against

both the union and the employer.

Mr. Max Stringfield, Local 423 President, informed the

plaintiffs that they “probably” would not be allowed to vote

on the proposed contract, subject to the decision of the

International Union, which later concurred in his decision.

Under the union Constitution, members on layoff are re-

quired to obtain a Dues Exemption Certificate in order

to preserve their membership rights while on layoff.

URW Constitution, Article VI, Section 3(a)(1) and 3(B).

3a

If a union member is laid off and fails to request a Dues

Exemption Certificate, the URW Constitution directs that

the union issue that member a Honorary Withdrawal and

Transfer Certificate, Article VII, Section 5(a)(4), which

“forfeit[s] that member’s rights in the local union and the

[International].” Article VII, Section 5(d).

The Constitution limits a member’s right to a dues ex-

emption of twelve months, after which the union must

issue the member an Honorary Withdrawal and Transfer

Certificate, but the member may request an extension from

both the local and the International Union. Article VI,

Section 3(d). The union contends that the plaintiffs failed

to take advantage of the dues exemption, and that they have

no legitimate complaint concerning the union’s refusal to

allow them the right to vote on the proposal or to speak

at the meeting. See generally, Tr. Vol. II at 27-32.

The plaintiffs presented testimony that they were un-

aware of the Dues Exemption Certificate requirement, or

that Mr. Stringfield told them that the cards “were auto-

matically issued.” Tr. Vol. 1 at 48, 49, 72, 81, 86, 94-95,

99, 173-74, 187; Vol. II at 191-92. However, the plaintiffs

admitted that they did not vote on any issues while they

were on layoff. Tr. Vol. I at 59, 75, 83-84, 97-98, 189, and

Tr. Vol. II at 62, although one witness for the plaintiffs,

Mr. Dohony, testified that he voted and spoke at meetings

while on layoff. Tr. Vol. II at 112-15.

The evidence does indicate that the union represented

various plaintiffs on several grievances and at disability

hearings during the time that they were on layoff and

should have possessed a Dues Exemption Card or an Hon-

orable Withdrawal and Transfer Card. Tr. Vol. I at 142,

144, 188; Vol. II at 38-39. The evidence also indicates some

confusion by the plaintiffs over the precise function of the

two cards. E.g., Tr. Vol. I at 77-78, 98-99; Vol. II at 3-4.

However, the evidence also indicates that the union did

4a

explain the distinction during the December 1980 meeting,

although Mr. Dohony, the individual who was listed in the

official minutes as having made the representation, testified

that he did not know the difference himself. Tr. Vol. II

at 3-4.

We also note that the union took a vote to authorize the

union leadership to call a strike. The union leadership

allowed Mr. Panter to speak at the meeting but did not

allow the plaintiffs to vote. Mr. Stringfield testified that

the plaintiffs did not request the right to vote at that meet-

ing, and that they did not contest is decision not to allow

them to vote. Tr. Vol. II at 65-66. Mr. Stringfield did

testify that these members on layoff were allowed to speak

at most union meetings as a “courtesy.” Tr. Vol. I at 102-

03, 114. He testified that he did not allow the plaintiffs

to speak at the ratification meeting because he “didn’t want

an ugly situation to develop. They weren’t allowed to vote

anyway,” and because he “felt that the possibility that a

conflict between the regular members and those members

on the issue of striking was a highly emotional issue, and

I just felt it could get out of control.” Tr. Vol. I at 116,

See aiso, Tr. Vol. I at 134-36.

The plaintiffs claim that the union did not represent

them adequately in the negotiation process. Essentially,

the plaintiffs allege that the union did not bargain “tough

enough” with the company during the negotiating process,

e.g., Tr. Vol. I at 92, and that there was a “conspiracy”

between the union and the company which led to the ter-

mination of the plaintiffs’ seniority rights. The plaintiffs

argue that the union should have called a strike to support

the contract demands because the membership had author-

ized a strike at a previous meeting.

The plaintiffs also introduced evidence of two “suspi-

cious” meetings between union officials and company offi-

cials. The first meeting occurred on December 29, 1983,

da

at the Fifth Quarter Restaurant in Louisville, Mr. String-

field and Mr. Yarbrough, a representative of the Interna-

tional, represented the union, while Mr. Schmidt and Mr.

Wall represented the company. The parties testified that

the ASRC used this meeting to inform the union that it

would seek termination of the plaintiffs’ recall rights. Tr.

Vol. I at 117-18; Vol. II at 57-58. The evidence indicates

that the union officials promptly informed the members of

the plaintiff class about the company’s forthcoming pro-

posal.

Mr. Leo Vincent testified that he saw Mr. Stringfield

and Mr. Wall, an ASRC official, at the Fifth Quarter at

some unspecified earlier time in the fall, presumably on

October 8, 1983, the Stringfield’s anniversary. However,

the record is not clear whether Mr. Vincent alleged that

Mr. Stringfield and Mr. Wall sat together or separately,

and we have no other reference in the record to this alleged

incident, which would have occurred some three months

prior to the beginning of negotiations. See Tr. Vol. I at

174-75; Vol. II at 56-57.

ASRC preposed that employees would lose recall rights

after one (1) year, whether or not they were currently on

layoff. Tr. Vol. I at 104. Subsequently, ASRC modified

its proposal to apply only to those employees who were

then on layoff. Tr. Vol. I at 104-05. The union responded

with a counteroffer, which would have given those persons

on layoff recall rights for two years or a time equal to their

seniori;y, whichever was shorter, from the date of the

agreement, as well as a complete probationary period.

Moreover, this clause would not apply to persons employed

as of the date of the agreement. Tr. Vol. I at 105-07.

ASRC responded with a “last, best, and final” offer (on

the same day the old contract expired) which provided that

all employees who had been on layoff for more than two (2)

years would lose their recall rights, but that the provision

6a

would not apply to those persons who were then employed

or who were receiving accident and sickness benefits. Vol.

Tat 108. See also, Tr. Vol. II at 44-47, 67-70. The union

attempted to obtain a one-month period for those persons

who were losing their recall rights to obtain their severance

pay. ASRC refused and the parties eventually settled on

48 hours. Understandably, the plaintiffs argue that this

provision placed a certain amount of compulsion upon them

to accept the severance pay and renounce any claim to

future employment.

Mr. Stringfield testified that he kept Mr. Panter, the

acknowledged leader of the plaintiffs’ group, fully informed

of the progress of the negotiations, and that he gave him

a list of laid-off employees and their telephone numbers

so that he could set up a committee of those people who

would be affected by this proposal. Mr. Panter does not

dispute this testimony.

Mr. Stringfield and the other union leaders presented

the proposed agreement to the union membership without

any recommendation whether to accept or reject the pro-

posal. Tr. Vol. I at 110. The membership accepted the

proposal by a vote of 79-7. Tr. Vol. Ibat 71. The member-

ship had authorized the union leadership to call a strike

by the vote of 98-3. However, Mr. Stringfield testified that

the union membership was opposed to a strike, and the

strike vote was taken as a negotiating tactic. Tr. Vol. II

at 92-3, 103-05. Mr. Stringfield testified that under normal

procedure, if “the final offer of the tentative agreement is

turned down, then the strike is called.” Tr. Vol. II at 92.

In essence, if the membership had rejected the tentative

agreement, i.e, ASRC’s ‘‘last, best, and final” offer, the

local leadership would have sought permission from the In-

ternational Union to call a strike. According to Mr. String-

field, the Local could not call a strike without permission

7a

from the International, even after taking a strike vote.

Tr. Vol. II at 100-01.

The plaintiffs also attack the Local’s acceptance of an

ASRC proposal in late 1983 which allowed employees the

right to choose between possible retirement plans. Ap-

parently, ASRC was concerned that certain employees

would retire before the beginning of the new contract.

Thus, ASRC offered the employees the chance to choose

to retire under the provisions of the old contract (pre-

March 1, 1984) or under the new contract (post-March 1,

1984). ASRC officials testified that the company was afraid

of losing valuable employees just when it was beginning to

rebuild its business. Thus, ASRC improved its pension

plan offer under the new contract and allowed employees

the options of retiring under either contract. Tr. Vol. I at

156-59. See also, Vol. II at 51-54, 66-67.

ASRC official Don Schmidt also testified that the reason

that the company pushed the recall clause so hard was that

the company was unwilling to rehire some 35 of the ap-

proximately 50 workers on layoff, although he did not

identify any of the plaintiffs as belonging to that category.

Tr. Vol. I at 151-54. Mr. Schmidt admitted that the work-

ers had nothing adverse in their disciplinary records, but

that it was possible for a person to be a poor worker and

still not have any disciplinary record. Mr. Schmidt stated

that the company felt very strongly about the clause and

was willing to accept a strike in order to obtain the desired

clause. Tr. Vol. I at 166.

Mr. Stringfield also testified to the company’s adamant

position and to the hard bargaining that went on between

the parties. He agreed that he believed that the company

would accept a strike. He also testified that he arranged

for the intervention of a Federal Mediator, and that the

Mediator advised him that the company appeared likely

8a

to accept a strike if it did not achieve its goal of cutting

off the plaintiff’s recall rights. Tr. Vol. II at 67-72.

With respect to the plaintiffs’ motion for injunction, we

believe that the Sixth Cireuit Court of Appeals’ decision

in Aluminum Workers International v. Consolidated Alu-

minum Corporation, 696 F. 2d 4387, 442-44 (1982) is dis-

positive. In that case, the parties had entered into a col-

lective bargaining agreement which contained a_ broad

grievance and arbitration provision. The corporation-ap-

pellant notified the appellee union that it intended to re-

structure certain job classifications with the ultimate effect

of eliminating 16 employees. The union objected and as-

serted that the company did not have the right to make

the reclassifications. When the company implemented its

plan, the union filed suit and the District Court ordered the

company to reinstate the 16 laid-off employees, and to re-

turn to the status quo ante pending arbitration.

On appeal the Appellate Court held that the union could

not prove that it would suffer irreparable harm. The

Court, in essence, held that loss of employment, which is

the result of job eliminations by a solvent employer, will

not support a claim by the union for injunctive relief, if

the employer is solvent and has the ability to reinstate its

employees or pay the wages for the period of unemploy-

ment. Judge Martin, speaking for the Court, held that

although the union could point to repossessions, foreclos-

ures, and injury to credit status which might befall the 16

jobless employees, these potential damages were specula-

tive, and would materialize only in select cases, and only

when the parties were unable or unwilling to commence

arbitration. Id., at 444.

Judge Martin also referred to the availability of un-

employment relief, health insurance, and financial support

from the union, and to the fact that the award of back pay

could be used to repair any damage to credit or to re-

9a

purchase goods repossessed by creditors during the arbi-

tration. IJd., at 444. While the Sixth Circuit opinion

heavily emphasized the various effects that the injunction

would have on the arbitration process, the Court, for a

third time on page 445, stated that the critical issue was

whether the injuries complained of could not be adequately

redressed by an arbitrator’s award.

In the instant case, we do not have an arbitrator’s award

but we do have a complaint for damages. While we per-

ceive no threat to the arbitration process here, since none

is involved, we believe that the potential right to damages

is to be considered in the same light as is the potential

right to back pay where arbitration is concerned.

Even if the element of irreparable injury were present,

we do not believe that plaintiffs have met all of the four

tests which must be addressed before a preliminary in-

junction is issued. They are set out in Mason County

Medical Association v. Knebel, 563 F. 2d 256 (6th Cir. 1977)

and are as follows:

1. Whether the plaintiffs have shown a strong or

substantial likelihood ir probability of success on the

merits;

2. Whether the plaintiffs have shown irreparable

injury ;

3. Whether the issuance of a preliminary injunc-

tion would cause substantial harm to others;

4. Whether the public interest would be served by

issuing a preliminary injunction.

In the case at bar, for reasons which will be more fully

discussed in the opinion, we do not believe that plaintiff has

shown a probability of suecess on the merits. We, there-

fore, overrule plaintiffs’ motion for an injunction ordering

the ASRC to recall plaintiffs.

10a

Plaintiffs allege that their rights under the Landrum-

Griffin Act were violated by the union. See 29 U.S.C. §411

et seq. The plaintiffs rely heavily upon Alvey v. General

Electric Company, 622 F. 2d 1279 (7th Cir. 1980). In that

case, the union’s constitution required members in good

standing to pay dues but prevented members on layoff from

making dues payments. Therefore, those persons on layoff

had no chance to either speak or vote at a union meeting,

during the course of which the union membership adopted

a contract proposal which affected their recall rights.

The Alvey Court held that the union had violated 29

U.S.C. §411(a)(1) by barring the members “from partici-

pating in all union matters regardless of their willingness

to pay dues or the extent to which the union matters may

compromise, or as here, extinguish, their rights.” Jd. at

1285. The Alvey Coart also stated that a member on layoff

remained “a member in substance” until he withdrew or

was “expelled or suspended after appropriate proceedings,”

Id. at 1284; See also, 29 U.S.C. §402(0). Other courts,

however, have held that a union may limit voting to mem-

bers in “good standing” or limit voting to those whose

interests are directly affected by the issue.” See American

Postal Workers Local 685 v. American Postal Workers

Union, 665 F. 2d 1096, 1103 (D.C. Cir. 1981) and Taylor v.

Great Lakes Seaman’s Union, Local 5000, 701 F. 2d 590,

591-92 (6th Cir. 1983).

The primary concern in Alvey was that the union con-

stitution prevented members on layoff from exercising

their rights while on layoff. In the instant case, the union

Constitution allowed members to obtain a Dues Exemption

Card which would allow them to continue to participate in

union meetings as members. In fact, the evidence shows

that Panter himself and another plaintiff, Mr. Foster, did

obtain these cards for one year, but that they did not

attempt to renew them.

lla

As the Alvey Court points out, when considering a

challenge to a union’s rules concerning a member's good

standing, this Court must consider a balance between the

“ ‘anti-democratic effects’ of the rule and the [union] in-

terests urged in its support’.” 622 F. 2d at 1283 (citing

United Steelworkers v. Usery, 429 U.S. 305, 310 (1977).

In this case, the union has a legitimate interest in making

sure that the union’s decisions are made by those who are

actively involved in the union’s activities. The union has a

legitimate interest in requiring that those persons who are

interested in working with the union and availing them-

selves of union benefits demonstrate that interest by be-

coming sufficiently involved in the union that they maintain

some specific official tie to the union, i.c., by maintaining a

Dues Exemption Card, which, as we noted above, is re-

newable.

In this case, the plaintiffs could easily request a Dues

Exemption Card. In fact, two plaintiffs performed that

function. The union Constitution also provided a mechan-

ism which allowed the plaintiffs to request an extension of

the Dues Exemption Card after its expiration. Although

none of the plaintiffs even attempted to apply for this

extension, the plaintiffs allege that the union officials

misled them into thinking that the dues exemption was

automatic. We also note evidence that the union officials

did explain members’ duties at regular union meetings.

Furthermore, the Constitution specifically spells out each

member's duties with regard to payment of dues. While

several plaintiffs testified that they did not possess a copy

of the Constitution, we note that a union member has a

duty to become familiar with his rights and duties as a

union member and as a member of the bargaining unit.

E.q., Baldini v. Local 1095, 581 F. 2d 145, 148-49 (7th Cir.

1978); Newgent v. Modine Manufacturing Company, 495

F. 2d 919, 928 (7th Cir. 1974).

12a

The plaintiffs also attempt to show that the union is

estopped from denying them speaking and voting rights

because of the union’s course of conduct or practice of

allowing the members on layoff to speak at prior meetings

and allowing some of them to vote at some meetings.

Again, we do not find any clear course of action. The

plaintiffs’ testimony, with the exception of Mr. Dohoney,

agreed that they were not allowed to vote at union meet-

ings.

The union’s denial of the right to speak causes this

Court some serious concern. The union had established a

“practice and pattern” of allowing the members on layoff

the chance to speak at most if not all meetings, including

those where votes would take place. Mr. Stringfield based

his decision not to allow the plaintiffs to speak upon both

advice from International Union officials and on his fear

of an “ugly situation.”

In general, the plaintiffs complain that the union did not

inform its members, either those active or those on layoff,

of its meetings, rules, and regulations. The plaintiffs

allege, for example, that union meetings were always held

during the second shift, and that many of the plaintiffs

worked the second shift and were unaware of the union’s

rules concerning the Dues Exemption Cards. Further-

more, the plaintiffs urge that there is no clear evidence

supporting the union’s claim that it informed the member-

ship of all its activities. We agree that the union’s conduct

of its meetings leaves a great deal to be desired in the way

of formalities and clarity in its record keeping. See, e.g.,

Tr. Vol. II at 76-77, 99-100. We also believe that disputed

issues of material fact remain; and therefore, the defend-

ants’ motion for summary judgment on the Landrum-

Griffin claim is denied.

The plaintiffs’ next allege a breach of the duty of fair

representation. While the plaintiffs were not members of

13a

the union in good standing, they were still members of the

bargaining unit. In other words, the plaintiffs still had

rights which flowed from the collective bargaining agree-

ment, i.e., their recall rights. As long as they had those

rights, the union was under a duty of fair representation to

guard these rights. This case does not involve people who

were no longer members of the bargaining unit as was the

case in Cooper v. General Motors Corporation, 651 F. 2d

249, 250 (5th Cir. 1981).

However, the union has a very wide latitude in exercis-

ing that duty. As the Seventh Circuit has noted, the

Supreme Court has established two separate standards for

breach of the duty of fair representation. Initially, the

Supreme Court allowed the union a “wide range of reason-

ableness” when negotiating contracts for the members

which it represents. Ford Motor Company v. Huffman,

345 U.S. 330, 338 (1953.) Thus, as the Alvey Court noted,

the union may lawfully “follow the dictates of the majority

if they determined that the decision reflected a proper

resolution of conflicting but legitimate interests.” 622 F. 2d

at 1289. On the other hand, the Seventh Cireuit has noted

that the Supreme Court defined a more specific and some-

what higher standard when dealing with employee griev-

ances under the standard of Vaca v. Sipes, 386 U.S, 171

(1967). See 696 F. 2d 505, 514-15 (7th Cir. 1982). See

generally Leffler, Piercing the Duty of Fair Representa-

tion: The Dichotomy Between Negotiations and Grievance

Handling, 1979 U. Tl. L.F. 35 (1979).

In this ease, we confront a union’s handling of a negoti-

ation situation, which calls for the less severe “wide range

of reasonableness” standard noted above. The plaintiffs

argue that the union did not bargain “tough enough” in the

words of Mr. Panter. Essentially, Mr. Panter and his

colleagues assert that the union should have called a strike

in order to protect their rights, and that the strike vote

léa

indicated the union members’ support for the plaintiffs’

position. Mr. Stringfield testified that the vote was a

negotiating tactic, and that the union members would not

have supported a strike. He further stated that the union

members could have indicated support for the plaintiffs by

simply rejecting the contract. Finally, ASRC official Don

Schmidt testified that the company would have taken a

strike in order to get its desires.

Initially, we note that the issue of the breach of fair

representation is a question of fact for a jury. E.g., Cox v.

C. H. Masland & Sons, Inc., 607 F. 2d 138, 142-43 (5th Cir.

1979); Minnis v. International Auto Workers, 531 F. 2d

850, 852-53 (Sth Cir. 1975). The burden of proof is by a

preponderance of the evidence, Dill v. Greyhound Corpora-

tion, 485 F. 2d 231, 237-38 (6th Cir. 1970), and this Court

has jurisdiction over a breach of fair representation in

negotiation claim under Section 301 of the LMRA, 29 U.S.C.

§185. Farmer v. ARA Services, Inc., 660 F. 2d 1096, 1106

(6th Cir. 1981).

We find summary judgment appropriate on this issue.

Mr. Panter can only point to his generalized feelings that

the union “should have bargained tougher” during negotia-

tions or that the union should have called aistrike. We find

no authority for imposing a “duty to strike” on the union,

and we find no factual allegation to support any claim that

the union could have taken any step to preserve the plain-

tiff’s recall rights other than a strike. While the Court may

entertain some personal doubt as to the vigor with which

the union presented its counter-proposals to the company,

we have absolutely no doubt that the company had taken

an adamant position on the question of recall rights and

would have suffered a strike in order to preserve its posi-

tion. Again, we find no evidence that the union could have

taken any position which would have reached an agreement

but still retained the plaintiff’s recall rights. For example,

NO Nhat, FE RAN Cae LT ea Sg le Cetin test Sh Pe

Sle tS What ASPEN

Anthea he

+ lel dS Nah ITN ye PR ie Me Dien ore

15a

the plaintiffs have not offered any evidence that the union

mmebership would have voted to strike if the union leader-

ship had proposed a strike.

Furthermore, we note that the union must also represent

the other members of the union. In effect, the union must

balance the plaintiffs’ rights along with the desires of the

other members of the union. For example, the plaintiffs

complain that the union accepted a company proposal in

late 1983 which had the effect of allowing union mem-

bers then employed to postpone retirement until after

the adoption of the new contract. The new pension plan

allowed the employees to retire under their choice of the

better of the two agreements. This agreement effectively

persuaded several older members not to retire until after

the adoption of the new contract, which had eliminated the

plaintiffs’ recall rights. Thus, the company was able to

replace the retired employees with new hires instead of

recalling the plaintiffs with their established seniority.

We conclude that had the union refused to accept this

plan, the current employees could have filed exactly the

same type of action against the union for breach of the duty

of fair representation as the plaintiffs have filed in this

ease. Simply put, we find a case of hard bargaining by the

company which was able to exert its economic power against

its employees. We find no law against “tough” bargaining,

either by the company or by the union. As the Eighth

Circuit recently noted, federal law requires bargaining, it

does not require agreement. Johnson v. Air Line Pilots,

650 F. 2d 133, 137 n. 3 (8th Cir. 1981).

Very recently counsel for the defendant union called the

Court’s attention to the case of Shamblin v. General Motors

Corporation, 743 F. 2d 436 (6th Cir. 1984). In that case,

all of the plaintiffs were employees of General Motors and

members of the UAW local union. All except one had been

originally hired as unskilled production workers. Under

l6a

the General Motors-UAW contract, most General Motors

workers acquire plant-wide seniority on a one-for-one basis.

There was, however, a separate seniority list for skilled

employees, and one-for-one skilled trades seniority was

acquired only when an employee was actually working in

a trade. Such seniority was issued for purposes of layoff

and recall within the skilled trades classification.

Prior to the lawsuit, an unskilled employee who sought

to enter the General Motors skilled trades program was

required to work for four years before he acquired any

seniority rights in the skilled trades classification. There-

after, he would continue to work under supervision for four

years, after which, having successfully completed the train-

ing program, he would be reclassified as a skilled trades

journeyman and afforded four years of seniority within

that skilled trades classification for his eight-year training

period. In effect, such employees before December 13, 1976

received one-for-two seniority.

Effective December 13, 1976, General Motors and UAW,

through collective bargaining, amended the seniority pro-

visions. The amendment provided that participants in

training for skilled trades would prospectively be afforded

seniority on a one-for-one basis within the skilled trades

classification. This provision was obviously advantageous

to new unskilled workers, but was not retroactively applied

to the plaintiffs who were in the skilled trades training

program. The plaintiffs claimed that the UAW should

have secured a seniority agreement which would have pro-

vided them retroactively with one-for-one seniority for

their skilled trades training.

Circuit Judge Edwards, in his opinion for the Court

affirming the district judge’s grant of summary judgment

to the defendants, cited language from both Ford Motor Co.

v. Huffman, 345 U.S. 330, 338-39 (1953) and Humphrey v.

Moore, 375 U.S. 335, 349-50 (1964), which points out that

° DF EF EE OH

17a

conflict between employees represented by the same union

is a recurring fact, and that a wide range of reasonableness

must be afforded to a statutory bargaining representative

in arriving at a collective bargaining agreement. The cases

further point out that the complete satisfaction of all mem-

bers of the union in such circumstances is hardly to be

expected. Shamblin v. General Motors Corp., supra, rein-

forces our conclusion that the defendants are entitled to

summary judgment on the issue of fair representation.

Plaintiffs have also alleged age discrimination under

Kentucky law, KRS 344.040 et seg. and seek injunctive

relief in the form of reinstatement and also damages. We

find nothing in the Kentucky Civil Rights Act that does

away with the plaintiffs’ burden of proving irreparable

harm. While the plaintiffs cite City of Los Angeles, De-

partment of Water and Power v. Manhart, 435 U.S. 702

(1978), we believe that the decisions of the Sixth Circuit

Court of Appeals in Aluminum Workers International v.

Consolidated Aluminum Corporation, supra, and Equal

Employment Opportunity Commission v. Anchor Hocking

Corporation, 666 F. 2d 1037 (6th Cir. 1982) are controlling.

Therefore, we repeat our previous holding that plaintiffs

are not entitled to injunctive reinstatement.

Plaintiffs complain that the impact of the collective

bargaining agreement of 1984 is disproportionate upon

plaintiffs who are 40 years of age and whose seniority is

a result of their age. In Farmer v. ARA Services, Inc.,

660 F. 2d 1096 (6th Cir. 1981), the Court held that a union

which participates in a negotiation of a collective bargain-

ing agreement may be found liable to four of its members

because the contract was discriminatory against the female

members. Id., at 1104 (citing cases).

Defendants move for summary judgment as to the age

discrimination issue. Plaintiffs, in response, presented no

discussion of their age discrimination claims. The tenor

18a

of all the evidence presented at the preliminary injunction

hearing also indicated that plaintiffs were relying on the

issues of violation of the Landrum Griffin Act and the duty

of fair representation, rather than upon any age discrim-

ination claim. No evidence was presented by the plaintiffs

as to whether or not plaintiffs are younger than the em-

ployees presently working in the defendants’ plant, nor

have they presented any evidence that new employees of

the company, if there have been any since the institution

of this suit, are younger than the plaintiffs.

The Sixth Cireuit Court of Appeals in the case of Rose

v. National Cash Register Corporation, 703 F. 2d 225 (1983)

held that it had “declined to adopt rigid guidelines ex-

clusively establishing a method for proving a prima facie

case in age discrimination actions.” Jd. at 227. It did

say that plaintiff has the burden of proving “he was dis-

charged because of age,” citing Laugesen v. Anaconda Com-

pany, 510 F. 2d 307 (6th Cir. 1975); or that age must be

a determining factor, see Blackwell v. Sun Electric Corp.,

696 F. 2d 1176, 1180 (6th Cir. 1983); or that age makes a

difference, see Ackerman v. Diamond Shamrock, 670 F. 2d

66, 70 (6th Cir. 1982); or that age is a contributing factor,

see Sahadi v. Reynolds Chemical, 636 F. 2d 116, 117 (6th

Cir. 1980).

Probably the case nearest in point to similarity of

facts is that of Massarsky v. General Motors Corp., 706

F. 2d 111 (3rd Cir.) cert. denied, __ U.S. —, 104 S. Ct. 348

(1983). There the plaintiff relied upon theories of both

disparate treatment and disparate impact. The Court re-

cited that in order to establish a prima facie case of dis-

parate impact, plaintiff was compelled to show that the

employer’s selection process resulted in unfavorable treat-

ment of a disparate number of members of the protected

group to which the plaintiff belongs. Jd. at 120.

NS GE eT Pe ee oad

Dit eA AN thd Ne pare

aeduaais

19a

In Massarsky, supra, the Court pointed out that under

the General Motors’ policies, General Motors students who

were insulated from layoffs may generally have been

younger than employees who were laid off in their place.

The Court pointed out that even if all the laid off employees

were older than the students who received special treat-

ment, ADEA would not be violated, unless those who were

aged 40 to 70 were disparately represented among the laid

off employees.

In the instant case, plaintiffs have simply failed to

present the Court with statistical proof as to the effect of

the layoff policies contained in the collective bargaining

agreement. The Court has been presented with no proof

as to what the age computation is of those members of the

union who had not been on recall for more than two years.

The Massarsky, supra, case refers to Geller v. Markham,

635 F. 2d 1027 (2nd Cir. 1980), cert. denied, 451 U.S. 945

(1981). In that case, there was a hiring policy that made

over 90% of the protected age class ineligible for appoint-

ment to teaching positions. The policy also resulted in

the exclusion of the majority of teachers over the age of

40. In Geller, supra, the Court held that the defendant

could not assert as a viable defense the employment policy

which was based in part on purely economic cost-cutting

grounds in the face of tight budgetary constraints. The

Court cited 29 C.F.R. §860.103(h) (1979), Marshall v.

Arlene Knitwear, Inc., 454 F. Supp. 715, 728 (B.D. N.Y.

1978), and Laugeson v. Analconda Co., supra.

In the case at bar, no evidence has been produced as to

the reason for the decision of the company to insist upon

the provision that no employee with more than two years

layoff should be recalled. The lack of such evidence, how-

ever, is not harmful to the defendants, since the plaintiffs

have failed to present the Court with any evidence that

would meet their prima facie burden of showing an em-

20a

ployment practice that is facially neutral in its treatment

of different groups but, in fact, falls more harshly on one

group than another and cannot be justified by business

necessity. See International Brotherhood of Teamsters v.

United States, 431 U.S. 324 (1977).

In light of the failure of the plaintiffs to present a

prima facie case as to the age discrimination issue, the mo-

tion of the defenuants for summary judgment will be

granted. We have this day entered a judgment in accord-

ance with these findings of fact, conclusions of law and

memorandum opinion.

Dated 12-17-84

(s) Charles M. Allen

Charles M. Allen, Chief Judge

ee: Counsel of Record

2la

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. C 84-0293 L(A)

Gorpon Panter, etal, - - - - - ~ Plaintiffs,

v.

AMERICAN SYNTHETIC RUBBER

CorporaTIoNn, et al., - . - - Defendants.

JUDGMENT—FEntered December 17, 1984

This action, having been heard by the Court without a

jury on the plaintiffs’ motion for a preliminary injunction,

the evidence having been transcribed, and the Court, having

entered its findings of fact, conclusions of law and memo-

randum opinion, and being fully advised in the premises,

Ir Is OrnpERED AND ApsupGeED that plaintiffs’ motion for

a preliminary injunction based upon alleged violation of

the Landrum Griffin Act, the duty of fair representation,

and KRS 344 et seq., is hereby denied.

Ir Is FurtHER OrpERED AND ApsupGED that defendants’

motion for summary judgment upon alleged violations of

the duty of fair representation and KRS 344 ef¢ seq. is

hereby granted.

Ir Is FurtHer Orperep that defendants’ motion for

summary judgment on plaintiffs’ claim of Landrum Griffin

Act violations is hereby denied.

This is not a final and appealable judgment, except as

to that portion of the judgment which denies the plaintiffs’

motion for a preliminary injunction which is appealable.

Dated 12-17-84

(s) Charles M. Allen

Charles M. Allen, Chief Judge

ee: Counsel of Record

22a

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. 84-0293-L(A)

Gorpon Panter, etal, - - - - - Plaintiffs,

v.

AMERICAN SYNTHETIC RUBBER

Corp., et al, - . - - - - Defendants.

MEMORANDUM OPINION—Entered November 1, 1985

This action is submitted to the Court on the motion of

the defendant American Synthetic Rubber Corp. (herein-

after “ASRC”) for summary judgment, and on the motion

of the plaintiffs to file a second amended complaint. For

the reasons set out below, the motion for summary judg-

ment will be granted, and the motion to file a second

amended complaint will be denied.

It will be recalled that this action was heard upon the

plaintiffs’ motion for a preliminary injunction, and that the

Court entered its findings of fact, conclusions of law and

memorandum opinion denying a preliminary injunction

based upon alleged violations of the Landrum-Griffin Act

and of the duty of fair representation contained in 29 U.S.C.

§301 and K.R.S. 344, and the Court further granted sum-

mary judgment to all defendants as to these claims. It

was also ordered that the defendant’s motion for summary

judgment on plaintiff’s claims of the Landrum-Griffin Act

violations was denied.

ae ea ee _—

23a

Subsequently it has been pointed out to the Court by

ASRC that the courts have consistently held that the

Landrum-Griffin Act does not apply to employers but only

to the relationship between the union and its members.

See Thompson v. New York Central Railroad, 361 F. 2d 137

(2nd Cir. 1966), Gross v. Kennedy, 183 F. Supp. 750 (S.D.

N.Y. 1960), and Pack v. Associated Food Distributors of

New England, Local No. 138, 237 F. Supp. 113 (D.C. Mass.

1965). It therefore follows that defendant’s motion for

summary judgment as to the Landrum-Griffin Act claims

of the plaintiff is meritorious.

Plaintiffs now have tendered a second amended com-

plaint wherein they allege that the ASRC has violated the

Employee Retirement Income Security Act (ERISA), 29

U.S.C. §1001 et seq. No facts are alleged in support of

this claim nor do the plaintiffs allege how the ERISA has

been violated. It is apparent that if their claims of viola-

tion of ERISA are based upon their previous claims that

they were wrongfully denied reemployment, they are barred

from asserting such claims by virtue of the decision of the

Court. Since the second amended complaint contains no

allegations of fact as to how the plaintiffs’ rights under

ERISA were violated, the Court cannot determine what

fact, if any, led to these claims. We therefore will deny

the motion to file a second complaint with the proviso that

plaintiffs may file a third amended complaint within thirty

days of such complaint specifically alleges what provisions

of ERISA were violated and in what manner. An order

to this effect has been entered this day.

Dated 11-1-85

(s) Charles M. Allen

Charles M. Allen, Senior Judge

ce: Counsel of Record

24a

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. 84-0293-L(A)

Gorvon Panter, et al, . : . Plaintiffs,

v.

AMERICAN Syntuetic Ruepser

Corp., et al, . . - - - - Defendants.

ORDER—Entered November 1, 1985

The defendant, American Synthetic Rubber Corp., hav-

ing moved for summary judgment, and the Court having

filed its memorandum opinion,

Ir Is Orverep that the motion for summary judgment

be granted as to the claims asserted in the first amended

complaint.

Ir Is Furtuer Oxverep that the plaintiffs’ motion to file

a second amended complaint is denied, subject to the right

of the plaintiffs to file within thirty days a third amended

complaint which sets out the provisions of ERISA which

allegedly have been violated by the defendant and the man-

ner in which they were violated.

This is not a final and appealable order.

Dated 11-1-85

(s) Charles M. Allen

Charles M. Allen, Senior Judge

cc: Counsel of Record

25a

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. 84-0293-L(A)

Gorpon Panter, et al, . . . . - Plaintiffs,

v.

American Syxtuetic Rueser

Corporation, et al., . : : : Defendants.

MEMORANDUM OPINION—Entered May 1, 1986

This action is pending before the Court on various mo-

tions. In order to understand these motions and the pos-

ture of the case, we will give a brief background of previous

developments.

The original action was filed under the Labor Manage-

ment Relations Act of 1947, as amended, Section 301(a)

et seq., Title 29 U.S.C. §185(a) et seq., and the Labor Man-

agement Reporting and Disclosure Act of 1959 (Landrum.

Griffin) §101, 73 Stat. 519, et seq., 39 U.S.C. §402 et seq.;

and in addition under the Kentucky Age Discrimination

Statute, K.R.S. Chapter 334 ef seq., by a group of laidoff

workers against their ex-employer, American Synthetic

Rubber Company (hereinafter ASRC), their local union

and the union’s international. The dispute grew out of a

change in the company’s labor management agreement

which expired on March 1, 1984. Under that agreement,

all laidoff employees with two or more years seniority had

unlimited recall rights. However, under the new agree-

ment ratified by the local union in March 1984, recall rights

26a

for !sidoff employees were to be terminated after two years

of layoff. Plaintiffs in this case were all employees with

more than iwo years seniority who had been laidoff for

more theu two years.

Under the union’s constitution, laidoff employees could

retain their union membership by either continuing to pay

dues or asking for a dues exemption. If they failed to ask

for a dues exemption, their union membership would be

terminated after three months of nonpayment. Only two

of the plaintiffs had asked for this extension, and in those

cases, the exemption had expired before the meeting to

ratify the new collective bargaining agreement was held

by the union.

Plaintiffs claim they were allowed to speak at previous

union meetings but were forbidden to speak or vote when

the new agreement was approved by a vote of 79 to 7, which

resulted in plaintiffs losing their reeall rights.

On December 17, 1984 this Court denied plaintiffs’ mo-

tion for a preliminary injunction, granted defendants’

motion for summary judgment on the age discrimination

claim and on the violation of the duty of fair representa-

tion but denied summary judgment on the Landrum-Grif-

fin claim.

In 1985 the plaintiffs asked to file a second amended

complaint dealing with an alleged violation of the Employee

Retirement Income Security Act (ERISA), 29 U.S.C. 61001

et seq. Following that motion, the Court granted the

ASRC judgment as to all claims asserted in the first a-

mended complaint and denied plaintiffs’ motion to file a

second amended complaint but gave them permission to

file a third amended complaint, which sets out specifically

the provisions of ERISA which were allegedly violated.

Following the tendering of the third amended complaint,

the Court entered an order which allowed the plaintiffs to

file the third amended complaint on the issue of whether

a

27a

or not the plaintiffs were wrongly denied their severance

pay. Following that order on December 18, 1985, the

plaintiffs attempted to reiterate in their third complaint

every statement made in their past complaints, renew the

ERISA claim because it improved benefits that they would

have received under the new collective bargaining agree-

ment, and alleged a denial of severance pay. Following

the filing of the third amended complaint, the motions are

now under submission.

We are of the opinion that the motions of ASRC for

summary judgment should be sustained as to all claims

filed by the plaintiffs, with the exception of the severance

pay. All of the issues which are raised by the third

amended complaint have already been ruled on in the

Court’s previous orders, and in the interest of judicial

economy, the Court refers the parties to its previous

opinions.

Also we note that the ASR motion for a more definite

statement should be sustained in order to ascertain whether

plaintiffs’ claims for severance pay have any relation to an

alleged violation of ERISA.

With regard to the union’s motion for summary judg

ment as to the Landrum-Griffin Act claims of the plaintiffs,

it is apparent that there are disputes of fact as to whether

or not the plaintiffs were given the right to speak at the

union meeting which ratified the collective bargaining

agreement. There is also a question of law, the answer to

which is not clear, as to whether or not persons have who

have been members of a union but who no longer are mem-

bers retain their rights under the Landrum-Griffin Act.

In light of this situation, the Court declines to grant the

motion of the union for summary judgment.

An order to this effect has been entered this day.

28a

Dated 01 May 1986

(s) Charles M. Allen

Charles M. Allen, Senior Judge

ec: Counsel of Record

29a

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. 84-0293-L(A)

Gorpon Panter, et al, - ° - - “ Plaintiffs,

Vv.

AMERICAN SYNTHETIC RUBBER

CorPoRATION, et al., - - - - Defendants.

ORDER—Entered May 1, 1986

Various motions having been filed with the Court, and

the Court being fully advised,

Ir Is Orperep that the motion of defendant, American

Synthetic Rubber Corporation, to dismiss, except as to

severance pay and the Landrum-Griffin claim of the plain-

tiff, is granted.

Ir Is Furtuer Orperep that the motion of the defendant,

American Synthetic Rubber Corporation, for a more defi-

nite statement is granted.

Tr Is FurrHer Orperep that the motion of the defendant

union for summary judgment be, and it hereby is, overruled.

This is not a final and appealable order.

Dated 01 May 86

(s) Charles M. Allen

Charles M. Allen, Senior Judge

ee: Counsel of Record

30a

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. 84-0293-L(A)

Gorpon Panter, et al, . ° - ° - Plaintiffs,

Ws

AMERICAN SYNTHETIC RUBBER

CorPorRATION, et al., - - - - Defendants.

MEMORANDUM OPINION—Entered September 5, 1986

This case is submitted to the Court upon the motion of

the defendant Unions, Local 423 and the International

Union, for summary judgment, and the motion to dismiss

filed by the Defendant, American Synthetic Rubber Cor-

poration, hereinafter referred to as “ASRC,” which the

Court will treat as a motion for summary judgment. The

Court will first discuss the motion of the corporation.

Plaintiffs’ claim that ASRC violated the Employee

Retirement Income Security Act (ERISA), 29 U.S.C.

§ 1001 et seq. by arbitrarily denying their claim to sever-

ance pay. In March 1981, ASRC and Local 423 agreed to a

three-year collective bargaining agreement. Under that

agreement, laid-off employees with two or more years of

seniority retained recall rights no matter how long they had

been on layoff unless they requested and received severance

pay in which case they lost all seniority and recall rights.

Under the new collective bargaining agreement entered into

in March 1984 between the Union and ASRG, all employees

who had been laid-off for more than two years lost their

Se eS ene ee ee a

dla

right to recall. Again, even if they were laid-off for less

than two years, they lost their seniority and recall rights

under the new agreement if they requested and received

severance pay.

The Union, in its negotiations with the company which

led to the 1984 agreement, proposed that all former em-

ployees of the company who had been on layoff for more

than two years should receive the right to severance pay

provided that they made application for it within thirty

days of the execution of the 1984-1987 agreement. The

company refused to accept this proposal, but instead

reached an agreement with the Union that Union members

would have forty-eight hours after the 1984-1987 agreement

was ratified within which to request their severance pay.

A letter which informed these employees that they had to

request their severance pay by March 9, 1984 was mailed on

March 2, 1984.

None of the plaintiffs, with the exception of J.J. Edring-

ton, made application for severance pay by March 9, 1984.

Article XVIII of the 1981 contract provided that employees

who decided to take severance pay would lose their seniority

and recall rights upon receipt of that pay. It should also

be noted that Edrington, in his letter requesting severance

pay, stated that his acceptance of severance pay should not

be construed as a waiver of his rights under the contract or

under the law.

Plaintiffs’ contention that ERISA was violated must be

rejected. The right to severance pay constitutes a welfare

plan that may be modified to the prejudice of some em-

ployees. Under the holding in Sutton v. Weirton Steel, 724

F. 2d 406 (4th Cir. 1983), employees’ rights to severance

pay may not only be modified without violating ERISA but

must be governed by the pertinent employment agreements.

Id., at 410.

32a

Plaintiffs’ allegation that ASRC acted arbitrarily and

capriciously in violation of ERISA does not state a claim.

In Sutton, the court held that an employer, which is the

administrator of a severance pay plan, would not breach its

fiduciary responsibilities by agreeing with the unions to a

modification which adversely affected some employees’

rights to severance pay. The court clearly held that the

law does not prohibit an employer from exercising the right

to renegotiate or amend unfunded contingent benefits pay-

able before normal retirement age. Jd., at 410-11.

Finally, the plaintiffs’ claim that ASRC attempted to:

coerce and manipulate Plaintiffs and others who were

subject to termination [on] 3/1/84 to sign away any

claim to any legal action against Defendant Company

and Defendant Union regarding loss of seniority

rights, all of which is a violation of ERISA, 29 U.S.C.

§ 1001 et seq., including but not limited to 29 U.S.C.

§ 1141.

Plaintiffs’ reliance upon 29 U.S.C. § 1141 is misplaced since

that statute is criminal in nature and can be enforced only

in a criminal action. See West v. Butler, 621 F. 2d 240, 244

(6th Cir. 1980). However, Plaintiffs’ claims under 29

U.S.C. § 1141 may be treated as though they were brought

under 29 U.S.C. § 1140. Id. That civil prohibition section

provides in essence that it is

unlawful for any person to discharge, fine, suspend,

ediscipline, or discriminate against a participant or

beneficiary for exercising any right to which he is

entitled under the provisions of an employee benefit

plan... or for the purpose of interfering with the

attainment of any right to which such participant may

become entitled under [an employee benefit] plan, this

title [29 U.S.C. §1001 et seq.], or the Welfare and

Pension Plans Disclosure Act {29 U.S.C. §§301-309].

29 U.S.C. $1140.

33a

This provision is designed primarily to protect an indivi-

dual’s pension rights. See West, supra, 621 F. 2d at 245,

citing 119 Cong. Rec. 30374 (“Especially vulnerable are

managers and executives whose substantial pension poten-

tialities provide an incentive to their discharge before

vesting.”

In the case at bar, ASRC did not suspend, discharge,

expel, discipline or discriminate against the plaintiffs

because they had exercised a right to which they were

entitled under ERISA or an employee benefit plan or the

Welfare and Pension Plan Disclosure Act. The only rights

which Plaintiffs had to severance pay were conferred upon

them by the 1981 collective bargaining agreement and by

the memorandum agreement of 1984 between the Union and

the ASRC. These rights were contractual in nature and

Plaintiffs cannot point to any breach of contract even

though the period of time given for exercising the severance

rights was extremely short. However, the right to sever-

ance pay was strictly subject to negotiation between the

Union and the company and the Court cannot interfere

with an agreement legitimately reached between these two

entities, notwithstanding the possibility that some plaintiffs

conceivably may have lost their right to severance pay

because of the shortness of time within which to make a

decision as to whether to apply for the severance pay. We

reach the conclusion therefore that the plaintiffs’ remaining

claims against ASRC, with the exception of Mr. Edring-

ton’s, should be dismissed with prejudice.

With regard to the Defendant Union’s motion for sum-

mary judgment, the Plaintiffs contend that they had a right

under the Landrum-Griffin Act, 29 U.S.C. §411 et seq. to

participate in the vote which led to the ratification by the

Unions of the 1984-1987 collective bargaining agreement.

The problem with the Plaintiffs’ theory is that Plaintiffs

failed to maintain their status as union members prior to

3ta

the March 7, 1984 meeting which resulted in the ratification

of the agreement. The Plaintiffs did not preserve their

union membership. Under the terms of the union constitu-

tion, the Plaintiffs could have maintained their good stand-

ing as union members by obtaining a dues exemption. The

failure to obtain a dues exemption for a period of ninety

days caused them to forfeit all rights and privileges of

union members. All of the members, except Gordon Panter,

were removed from the membership rolls of the union in

August 1981 after they had fallen three months behind in

the payment of membership dues. Panter did receive a

dues exemption but did not request an extension, even

though an extension was authorized by the constitution.

He therefore lost his union membership three months after

his dues exemption expired.

In the case of NERB v. Financial Institution Employees

of America, — U.S. —, 54 USLW 4203 (February 26,

1986), the Supreme Court held that the National Labor

Relations Board could not premulgate a rule that required

that non-union employees be permitted to vote in a certified

union’s decision whether to affiliate with other unions. The

court based its decision in part upon the theory that the

National Labor Relations Act allows unions members to

control the shape and direction of their organization and as

a result non-union employees have no voice in the affairs of

the union. Jd.,54 USLW at 4207.

We are reinforced in our opinion by the language con-

tained in Alvey v. General Electric Company, 622 F. 2d

1279 (7th Cir. 1980). That case points out that the

Landrum-Griffin Act, 29 U.S.C. § 411(a)(1) guarantees all

union members equal rights and privileges, including the

right to participate in the deliberation and voting upon the

business of membership meetings. That right, however, is

not absolute. Section 411(a)(1) contains a proviso that

makes the right subject to reasonable rules and regulations

35a

in the union’s constitution and by-laws. Section 411(b)

also provides that constitutional or by-law provisions in-

consistent with subsection (a) shall be of no force and effect.

In Alvey, the court pointed out that the right of a union

to limit participation in union affairs to members in good

standing is clearly reasonable. Alvey, 622 F. 2d at 1284.

However, the court was “faced with a substantially more

onerous rule that not only limited participation in union

affairs to members in good standing but precluded

those on layoff” from payment of dues to maintain their

good standing. As a result, the members on layoff were

“harred from participating in all union matters regardless

of their willingness to pay dues or the extent of which the

union matters might compromise or nearly extinguish their

rights.” IJd., at 1284-85.

While the Alvey court held that the union’s provision

which precluded the former union members who were on

recall from voting or speaking at union meetings on ques-

tions affecting their economic interests was of no force or

effect, it specifically did so because the plaintiffs, who were

on layoff, were precluded from maintaining their union

membership.

In the instant case, the plaintiffs have not been precluded

from remaining as union members. They could either have

paid their dues on a current basis or obtain successive

90-day exemptions from payment of dues which would have

allowed them to maintain their membership in good

standing.

Finally, we note that 29 U.S.C. ¢ 4020 provides that one

is a member of a union organization when he has fulfilled

the requirements for membership and has neither volun-

tarily withdrawn nor been expelled or suspended from

membership. The failure to pay dues or to apply for an

exemption from the failure to pay dues is a voluntary act

on the part of the employees on recall. They were not

36a

coerced into discontinuing their union membership but

simply chose not to exercise their right to continue their

union membership in the manner required by the union’s

constitution and by-laws.

We note also that 29 C.F.R. §§452.86 and 452.92 provide

that a laidoff employee may maintain good standing for the

purpose of remaining eligible to vote on union matters by

tendering dues which the union cannot refuse to accept.

Here the plaintiffs were granted that right by the union and

yet failed to take advantage of the right guaranteed by both

the union and the Code of Federal Regulations.

The Court recognizes that the interests of laidoff em-

ployees such as plaintiffs in matters that will alter or

effectively extinguish their recall rights is a most vital one.

Alvey, supra, 622 F. 2d at 1285. However, plaintiffs had

the option of maintaining their rights to vote on these vital

matters by either paying dues or procuring exemptions and

failed to do so.

For the reasons set out above, the motion of the com-

pany and the union for summary judgment must be sus-

tained.

Dated: 9-5-86

(s) Charles M. Allen

Charles M. Allen, Senior Judge

ec: Counsel of Record

37a

IN THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Civil Action No. 84-0293-L(A)

Gorpon Panter, et al, = - . : . Plaintiffs,

v.

AMERICAN SYNTHETIC RUBBER

CoRPORATION, et al., - ° . ° Defendants.

JUDGMENT—Entered September 5, 1986

Defendant, American Synthetic Rubber Corporation,

having moved to dismiss the remaining claim of the plain-

tiffs, and the Court having considered said motion to dis-

miss as a motion for summary judgment, and having

entered its memorandum opinion, and being fully advised

in the premises,

Ir Is OnpeRED AND ApJupGeED that all remaining claims

of the plaintiffs against the defendant, American Synthetic

Rubber Corporation, are dismissed, with the exception of

the claim of J. J. Edrington for severance pay.

Ir Is FurtHEerR OrDERED AND ApsupGeED that the motion of

the defendants, Local and International Unions, for sum-

mary judgment be, and they hereby are sustained for the

reasons set out in the memorandum opinion of the Court.

This is not a final and appealable judgment.

Dated: 9-5-86

(s) Charles M. Allen

Charles M. Allen, Senior Judge

ee: Counsel of Record

38a

APPENDIX B

29 U.S.C. §402. Definitions

For the purposes of this chapter—

(o) “Member” or “member in good standing”, when used

in reference to a labor organization, includes any person

who has fulfilled the requirements for membership in such

organization, and who neither has voluntarily withdrawn

from membership nor has been expelled or suspended from

membership after appropriate proceedings consistent with

lawful provisions of the constitution and bylaws of such

organization.

29 U.S.C. §411. Bill of rights; constitution and bylaws

of labor organizations

(a)(1) Equal rights

Every member of a labor organization shall have equal

rights and privileges within such organization to nominate

candidates, to vote in elections or referendums of the labor

organization, to attend membership meetings, and to par-

ticipate in the deliberations and voting upon the business

of such meetings, subject to reasonable rules and regula-

tions in such organization’s constitution and bylaws.

(2) Freedom of speech and assembly

Every member of any labor organization shall have the

right to meet and assemble freely with other members; and

to express any views, arguments, or opinions; and to ex-

press at meetings of the labor organization his views, upon

candidates in an election of the labor organization or upon

any business properly before the meeting, subject to the or-

ganization’s established and reasonable rules pertaining to

the conduct of meetings: Provided, That nothing herein

shall be construed to impair the right of a labor organiza-

39a

tion to adopt and enforce reasonable rules as to the re-

sponsibility of every member toward the organization as an

institution and to his refraining from conduct that would

interfere with its performance of its legal or contractual

obligations.

(3) Dues, initiation fees, and assessments

Except in the case of a federation of national or inter-

national labor organizations, the rates of dues and initia-

tion fees payable by members of any labor organization in

effect on September 14, 1959 shall not be increased, and no

general or special assessment shall be levied upon such

members, except—

(A) in the case of a local labor organization, (i) by

majority vote by secret ballot of the members in good

standing voting at a general or special membership

meeting, after reasonable notice of the intention to

vote upon such question, or (ii) by majority vote of the

members in good standing voting in a membership ref-

erendum conducted by secret ballot; or

(B) in the case of a labor organization, other than

a local labor organization or a federation of national

or international labor organizations, (i) by majority

vote of the delegates voting at a regular convention,

or at a special convention of such labor organization

held upon not less than thirty days’ written notice to

the principal office of cach local or constituent labor

organization entitled to such notice, or (ii) by majority

vote of the members in good standing of such labor

organization voting in a membership referendum con-

ducted by secret ballot, or (iii) by majority vote of the

members of the executive board or similar governing

hody of such labor organization, pursuant to express

authority contained in the constitution and bylaws of

40a

such labor organization: Provided, That such action

on the part of the executive board or similar govern-

ing body shall be effective only until the next regular

convention of such labor organization.

(4) Protection of right to sue

No labor organization shall limit the right of any mem-

ber thereof to institute an action in any court, or in a pro-

ceeding before any administrative agency, irrespective of

whether or not the labor organization or its officers are

named as defendants or respondents in such action or pro-

ceeding, or the right of any member of a labor organization

to appear as a witness in any judicial, administrative, or

legislative proceeding, or to petition any legislature or to

communicate with any legislator: Provided, That any such

member may be required to exhaust reasonable hearing

procedures (but not to exceed a four-month lapse of time)

within such organization, before instituting legal or admin-

istrative proceedings against such organizations or any

officer thereof: And provided further, That no interested

employer or employer association shall directly or indi-

rectly finance, encourage, or participate in, except as a

party, any such action, proceeding, appearance, or petition.

(5) Safeguards against improper disciplinary action

No member of any labor organization may be fined,

suspended, expelled, or otherwise disciplined except for

nonpayment of dues by such organization or by any officer

thereof unless such member has been (A) served with writ-

ten specific charges; (B) given a reasonable time to pre-

pare his defense; (() afforded a full and fair hearing.

(b) Invalidity of constitution and bylaws

Any provision of the constitution and bylaws of any

labor organization which is inconsistent with the provisions

of this section shall be of no force or effect.

4la

29 U.S.C. $412. Civil action for infringement of rights:

jurisdiction

Any person whose rights secured by the provisions of

this subchapter have been infringed by any violation of this

subchapter may bring a civil action in a district court of

the United States for such relief (including injunctions)

as may be appropriate. Any such action against a labor

organization shall be brought in the district court of the

United States for the district where the alleged violation

occurred, or where the principal office of such labor or-

ganization is located.

29 U.S.C. §1002. Definitions

For the purposes of this subchapter:

(1) The terms “employee welfare benefit plan” and

“welfare plan” mean any plan, fund, or program which was

heretofore or is hereafter established or maintained by ar

employer or by an employee organization, or by both, to

the extent that such plan, fund, or program was estab-

lished or is maintained for the purpose of providing for

its participants or their beneficiaries, through the purchase

of insurance or otherwise, (A) medical, surgical, or hospital

care or benefits, or benefits in the event of sickness, acci-

dent, disability, death or unemployment, or vacation bene-

fits, apprenticeship or other training programs, or day care

centers, scholarship funds, or prepaid legal services, or

(B) any benefit described in section 186(¢c) of this title

(other than pensions on retirement or death, and insurance

to provide such pensions).

29 U.S.C. §1051. Coverage

This part shall apply to any employee benefit plan ce-

seribed in section 1003(a) of this title (and not exempted

under section 1003(b) of this title) other than—

(1) an employee welfare benefits plan . .

42a

29 C.F.R. §452.86 Vote conditioned on payment of dues.

A labor organization may condition the exercise of the

right to vote upon the payment of dues, which is a basic

obligation of membership. Such a rule must be applied

uniformly. If a member has not paid his dues as required

by the labor organization’s constitution or bylaws he may

not be allowed to vote. Thus, a rule which suspends a

member’s right to vote in an election of officers while the

member is laid off and is not paying dues would not, in

ordinary circumstances, be considered unreasonable, so long

as it is applied in a nondiscriminatory manner. However,

members must be afforded a reasonable opportunity to pay

dues, including a grace period during which dues may be

paid without any loss of rights. In the case where a mem-

ber is laid off but desires to maintain his good standing

and thus his membership rights by continuing to pay dues,

it would be clearly unreasonable for the labor organization

to refuse to accept his payment.

29 C.F.R. §452.92 Unemployed members.

Members who are otherwise qualified to vote may not

be disqualified from voting merely because they are cur-

rently unemployed or are employed on a part-time basis

in the industry served by the union, provided, of course,

that such members are paying dues.

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