Petition for Writ of Certiorari — McKinney v. Emery Air Freight Corp.

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FILED.

97.128 JUL 2 1 1997

ee EeE

Jn The

Supreme Court Of Che Anited States

OCTOBER TERM 1997

~4+—

ROD McKINNEY; and CF AIR

FREIGHT EMPLOYEES,

Petitioners,

A CF COMPANY; LOCAL 85,

INTERNATIONAL BROTHERHOOD

Respondents.

—¢—

On Petition for a Writ of Certiorari to the

United States Court of Appeals For The Ninth Circuit

~~ on

PETITION FOR WRIT OF CERTIORARI

—

Christopher W. Katzenbach

KATZENBACH AND KHTIKIAN

Attorneys at Law

1714 Stockton Street, Suite 300

San Francisco, California 94133-2930

(415) 834-1778

Counsel for Petitioners

LANTAGNE LEGAL PRINTING

801 East Main Street Suite 100 Richmond, Virginia 23219 (800) 847-0477

QUESTION PRESENTED

Have the lower courts failed to give sufficient weight

to the policy of exhaustion of the grievance-and-arbitration

process by applying the "knew or should have known" test

that the statute of limitations starts to run when the

employee knows or should know that the union has violated

its fair representation duty, even if this is before the

grievance-and-arbitration process is completed, rather than

applying the "date of exhaustion" test that the statute of

limitations does not begin until a final grievance or

arbitration decision is rendered which formally terminates

the grievance-and-arbitration proceeding?

eiiteadaalll PIER Wet RP CE NANRAT A IE TS aw

NIELS FM ERM

LIST OF PARTIES

The parties to the proceedings below are:

& Rod McKinney.

YB CF Air Freight Employees (an

organization of former employees of

CF Air Freight).

3. Emery Air Freight Corporation d/b/a

Emery Worldwise, a CF Company.

In addition, the following parties were parties to the

proceedings in the district court:

4. Local 85, International Brotherhood

of Teamsters, AFL-CIO.

5. Western Conference of Teamsters.

6. International Brotherhood of

Teamsters, AFL-CIO.

ili

TABLE OF CONTENTS

Page

QUESTION PRESENTED ......cccccevevvces i

fog: Sf) err rer er a ii

ee I 8 6 ek aS oe hee ee 1

ACES 6.5.6.8 Reade 4 ]

SLEEVED 66 eek bh eK ER eRe ES 2

STATEMENT OF THE CASE .....ccccsescves 2

REASONS FOR GRANTING THE WRIT........ 10

I. THE LOWER COURTS HAVE FAILED TO GIVE

SUFFICIENT WEIGHT TO THE POLICY OF

EXHAUSTION OF THE GRIEVANCE-AND-

ARBITRATION PROCESS BY APPLYING THE

"KNEW OR SHOULD HAVE KNOWN" TEST

THAT THE STATUTE OF LIMITATIONS

STARTS TO RUN WHEN THE EMPLOYEE

KNOWS OR SHOULD KNOW THAT THE

UNION HAS VIOLATED ITS FAIR

REPRESENTATION DUTY, EVEN IF THIS IS

BEFORE THE GRIEVANCE-AND-

ARBITRATION PROCESS IS COMPLETED,

RATHER THAN APPLYING THE "DATE OF

EXHAUSTION" TEST THAT THE STATUTE OF

LIMITATIONS DOES NOT BEGIN UNTIL A

FINAL GRIEVANCE OR ARBITRATION

DECISION IS RENDERED WHICH FORMALLY

TERMINATES THE GRIEVANCE-AND-

ARBITRATION PROCEEDING.

CONCLUSION 22

Ce ee Pe ee Oe 8 Oe 6 Sa 6.6 6-6-6. S64 6 ee

ee er eee

TABLE OF AUTHORITIES

Page

Cases

Buttry v, General Signal Corp., 68 F.3d 1488

Ce, gk se oe kw es 14, 15, 16, 19, 20

Childs v.P vania Fed'n Bhd. of

Maintenance of Way Employees,

831 F.2d 429 (3d Cir. 1987) .. 11, 12, 13, 16, 18

DelCostello v. International Bhd. of Teamsters,

Be Sr 10, 17

ive, 770 F.2d

52 (6 Cir. 1985) cert. denied 474 U.S. 1021 13, 14

Rieti ys oe ae

Workers, 46 F.3d 1047 (10th Cir. 1995) .. 13,14

Freeman v. Local Union No. 135, Chauffeurs,

Teamsters, Warehousemen_

and Helpers, 746 F.2d 1316 (7th Cir.1984) . 13, 14

Galindo v, Stoody Co., 793 F.2d 1502

ee 13, 14

869 F.2d 160 (2d Cir. 1989) .......... 13, 14

Hayes v, Reynolds Metals Co.,

769 F.2d 1520 (1ith Cir. 1985) ........... 13

I ey a | Machini UU

108 F.3d 658 (6th Cir. 1997) ........ 13, 14, 16

Kozy v. Wings West Airlines, Inc., 89 F.3d 635

ee I 13

Lucas v. Mountain States Tel. & Tel.,

909 F.2d 419 (10th Cir. 1990) ......... 13, 14

Vv j i .

954 F.2d 590 (9th Cir. 1992) ......... 2.6

Metz v. Tootsie Roll Industries, Inc., 715 F.2d 299

(7th Cir. 1983) cert. denied 464 U.S. 1070 . 13, 14

Sj — Ta

652 F.2d 1349 (9th Cir. 1981) ............ 19

Vaca v. Sipes, 386 U.S. 171 (1967) ............. 3

Whittle v. Local 651. I oe

Teamsters, 56 F.3d 487 (3d Cir. 1995) ... 13, 18

Vil

Federal Statutes

wet t

EE EP eres

EE SIO TCC

LES SE

Section 10(b) of the National Labor Relations Act, as

amended (29 U.S.C. § 160(b)) .............. 2,

Section 301(a) of the Labor Management Relations Act

Eke ooo ee ee 2,

Court Rules

IT ok ee ee eee eee

PTR SG esas ccc cee cece cece

PETITION FOR WRIT OF CERTIORARI

Rod McKinney and CF Air Freight Employees

("Petitioners") respectfully pray that a Writ of Certiorari issue

to review the decision of the United States Court of Appeals

for the Ninth Circuit entered on March 13, 1997.

OPINIONS BELOW

The Order of the United States Court of Appeals for

the Ninth Circuit filed is not officially published and is

reprinted at App. pages 9a-11a, infra. Its unofficial citations

are 108 F.2d 1385 and 1997 WL 117060. The Order and

Judgment of the United States District Court for the Northern

District of California is not officially published and is

reprinted at App. pages la-8a, infra. The District Court's

opinion is not published. The Order of the Court of Appeals

denied rehearing was filed April 21, 1997, is unpublished and

is reprinted at App. page 12a, infra.

JURISDICTION

The Judgment and Opinion of the United States Court

of Appeals for the Ninth Circuit was entered on March 13,

1997. App. p. 9a. A timely Petition for Rehearing and

Suggestion for Rehearing En Banc was filed. On April 21,

1997, the Ninth Circuit denied the Petition for Rehearing and

rejected the Suggestion for Rehearing En Banc. App. p. 12a.

The jurisdiction of the Court is invoked under 28 U.S.C. §

1254(1). This Petition is timely filed with this Court under 28

U.S.C. § 2101(c) and U.S.Sup.Ct. Rule 13.1 and 13.3.

STATUTES INVOLVED

Section 301 (a) of the Labor Management Relations Act

(29 U.S.C. § 185(a)) provides:

"Suits for violation of contracts between an employer

and a labor organization representing employees in an

industry affecting commerce as defined in this Act, or

between any such labor organizations, may be brought

in any district court of the United States having

jursidiction of the parties, without regard to the

amount in controvesy or without regard to the

citizenship of the parties."

Section 10(b) of the National Labor Relations Act, as

amended (29 U.S.C. § 160(b)), provides, in material part:

"Provided, That no complaint shall issue based upon

any unfair labor practice occurring more than six

months prior to the filing of the charge with the Board

and the service of a copy thereof upon the person to

against whom such charge is made, unless the person

aggrieved thereby was prevented from filing such

charge by reason of service in the armed forces, in

which event the six-month period shall be computed

from the day of discharge."

STATEMENT OF THE CASE

ee ee ee

This case arises as a suit by Petitioners against their

employer and their union. Petitioners alleged that the

employer had breached a collective bargaining agreement and

the union had breached its duty of fair representation by

mishandling the ensuing grievance-and-arbitration

proceedings. This Court established the right of employees to

bring such actions to enforce their rights under collective

bargaining agreements which contain exclusive grievance-and-

arbitration provisions otherwise controlled exclusively by the

employer and union in Vaca v. Sipes, 386 U.S. 171 (1967).

This type of action is typically referred to as hybrid § 301/fair

representation case because it involves both proof of a union's

breach of its fair representation duty and breach of the

underlying collective bargaining agreement between the union

and the employer.

Jurisdiction of the District Court was invoked under

section 301(a) of the Labor Management Relations Act of

1947 (29 U.S.C. § 185(a)) for violation of a collective

bargaining agreement and under 28 U.S.C. § 1331 and §

1337, as the duty of fair representation arises under federal

laws regulating interstate commerce.

This case arises from Petitioners' efforts to obtain

damages for breach of the terms of a collective bargaining

agreement covering their employment following a corporate

merger and reorganization as a result of which Petitioners’

work was transferred to other employees and Petitioners lost

their contract benefits, seniority and jobs which had been

subject to their collective bargaining agreement. See App. pp.

15a, 17a-19a.'

The background facts are discussed in the Ninth

Circuit's earlier decision in this dispute, Case Nos. 90-15600,

90-15613, McKinney, et al. v. Emery Air Freight Corp.

(continued...)

Plaintiffs were employees of CF Air Freight, Inc.

("CF Air Freight" or "CFAF") and covered by a collective

bargaining agreement between CF Air Freight and Teamster

Local 85 (the "Union"). The collective bargaining agreement

at issue in this case had effective dates of April 1, 1988

through March 31, 1991 (the "1988-1991 Agreement"). App.

pp. 18a-19a, 25a, 59a.

The Agreement contained provisions protecting

Petitioners' contract rights in the event of a corporate merger

or reorganization (Article 1, section 3, second paragraph,

second sentence) (App. pp. 60a et seq.):

"In the event the Employer fails to require the

purchaser, transferee, or lessee to assume the

obligations of this Agreement, the Employer

shall be liable to the Local Union and fo the

employees covered for all damages sustained as

a result of such failure to require the

assumption of the terms of this Agreement

until its expiration date, but shall not be liable

after the purchaser, the transferee or lessee has

agreed to assume the obligations of this

Agreement." (Emphasis supplied.)

The 1988-1991 Agreement expressly provides that

corporate reorganizations shall not affect liability under the

Agreement for damages (Article 1, section 3, second

paragraph, last sentence):

‘(...continued)

(1992) 954 F.2d 590, reproduced at App. pp. 13a-26a.

;

~ ieee eal

"Corporate reorganizations by the Employer,

occurring during the term of this Agreement,

Shall not relieve the Employer or the

reorganized employer of the obligations of this

Agreement during its term."

CF Air Freight's parent corporation (Consolidated

Freightways, Inc.) acquired Emery Air Freight Corporation in

about April 1989. Through subsequent corporate restructuring

by Consolidated Freightways, defendant Emery Air Freight

Corporation, d/b/a Emery Worldwide, a CF Company

("Emery") was left as the surviving corporate entity. Emery's

employees were also represented by the Union. App. pp. 17a-

18a.

As a result of this corporate restructuring, the Union

and Emery declared the 1988-1991 Agreement with CF Air

Freight void. Archie Murrietta, a Teamster official assigned

to handle issues arising from the CF-Emery merger, told the

plaintiffs that the Agreement was "dead", refused to consider

seniority provisions plaintiffs proposed that would have

protected their jobs, and told plaintiffs to "get a good lawyer."

App. pp. 34a-41a, 43a.

On July 14, 1989, the CFAF employees instituted an

action in District Court for declaratory relief that the 1988-

1991 Agreement remained valid at least for purposes of a

remedy for damages under the contract (McKinney, et al. v.

ion ("McKinney I"), Docket No.

C 89 2649 CAL). The District Court concluded that the

contract was binding after the merger, but concluded that

plaintiffs had not shown a breach of the duty of fair

representation to avoid going through the contractual

grievance procedure. Both sides appealed.

The Ninth Circuit reversed (Case Nos. 90-15600, 90-

15613, McKinney, et al. v. Emery Air Freight Corp. (1992)

954 F.2d 590). App. pp. 13a-26a. The Ninth Circuit also

concluded that the contract existed at some time (App. p.

25a). However, the Ninth Circuit noted the factual dispute

between Emery and plaintiffs as to whether the contract was

a three-year agreement or only a one-year retroactive

agreement, and remanded the case for a hearing before the

grievance/arbitration provisions of the Agreement (App. pp.

25a-26a).

Following remand, the District Court ordered the

dispute to the grievance procedure provided for in the

Agreement (App. pp. 2a-28a).

In the course of setting the dispute for a hearing, the

union advised petitioners that would not be plaintiffs’

"spokesperson" at the hearing but it would assist them in

presenting their own case:

"In view of the history of the positions taken

by the parties at various stages of this

proceeding, Local 85 does not believe it

appropriate to be the spokesperson at JWAC

for Mr. McKinney and the group he

represents. A representative of Local 85 will

attend the hearing and will take appropriate

steps to ensure that Mr. McKinney and/or

other members he represents will have a full

opportunity to present their case." App. pp.

55a-56a.

On Tuesday, November 2, 1993, the Union notified

the plaintiffs that the case would be submitted to a joint

grievance panel (the Joint Western Area Committee or

"JWAC") at its next meeting (App. pp. 57a-58a). Petitioners

attempted to learn when their case was scheduled, but were

unable to locate the case on the printed JWAC agenda (App.

p. 45a). Petitioners arranged to be informed if their case was

added to the agenda on Sunday. Sunday evening, Petitioners

learned that the case had not been added to the agenda at the

union caucus (App. pp. 45a-46a).

On Monday, November 8, 1993, the first day of the

week-long JWAC meetings, the JWAC panel to which

Petitioners' case had been assigned met in San Diego,

California (App. pp. 30a-3la, 47a). Petitioners not were

present. Murrietta was the Chairman of the hearing panel and

was present in the closed-session deliberations of the JWAC

panel (App. pp. 31a-32a, 46a-48a). The JWAC panel rejected

the grievance (App. p. 48a). One of the Petitioners received

a telephone call on November 8 informing him that Petitioners

had lost (App. p. 46a).

On May 6, 1994, less than six months after the JWAC

decision, Petitioners instituted this action for breach of the

duty of fair representation, breach of collective bargaining

agreement, and other claims (App. pp. 3a-4a).

The District Court granted Respondent's motion for

Summary judgment on the grounds that the statute of

limitations had run. The District Court concluded that statute

ran from the date the union declined to be Petitioners'

spokesperson at the hearing, rather than from the date of the

hearing. The District Court reasoned that, identifying the

starting date for the statute of limitations "requires a more

specific identification of what the alleged breach of the duty

of fair representation is here" (App. p. 4a). The District

Court concluded that "the real claim is that the union declined

to represent [Petitioners]" at the hearing and that, therefore,

the statute of limitations therefore accrued when Petitioners

were told that the union would not be their spokesperson

rather than the date of the grievance decision. App. p. 8a.

In an unpublished decision, the Ninth Circuit affirmed

the District Court. Like the District Court, the Ninth Circuit

held that the statute of limitations in a fair representation case

commenced to run from the date the union stated that it would

not be Petitioners' spokesperson at the hearing rather than the

date of the JWAC grievance/arbitration decision:

"The district court ruled that this claim was

barred by the six-month statute of limitations,

because plaintiffs received notice that the union

would not represent them more than six months

before the complaint was filed in district court.

* * * Plaintiffs contend on appeal that the

district court erred because when the claim of

breach of duty of fair representation involves a

grievance or arbitration proceeding the claim

does not accrue until the plaintiffs learn the

result of the proceeding. The Ninth Circuit

authority relied upon by plaintiffs, however,

establishes no such bright line rule. See

Galindo v. Stoody Co., 793 F.2d 1502, 1509

(9th Cir. 1986) (where union decides not to

bring grievance at all, cause of action accrues

‘when the employee learns or should have

learned of the union's decision'). Kozy vy.

Wings West Airlines, 89 F.3d 635 (9th Cir.

1996), is distinguishable because it involved a

union's allegedly flawed representation at an

arbitration hearing, rather than a failure to

represent at all, and because its ruling was

based on jurisdictional requirements not present

here. The district court correctly concluded

this case was most analogous to the Second

Circuit's decision in

Corp., 68 F.3d 1488 (2d Cir. 1995), and our

circuit law is not inconsistent with that

decision. See Galindo, 793 F.2d at 1509."

App. pp. 10a-1la

REASONS FOR GRANTING THE WRIT

THE LOWER COURTS HAVE FAILED TO GIVE

SUFFICIENT WEIGHT TO THE POLICY OF

EXHAUSTION OF THE GRIEVANCE-AND-

ARBITRATION PROCESS BY APPLYING THE

"KNEW OR SHOULD HAVE KNOWN" TEST

THAT THE STATUTE OF LIMITATIONS STARTS

TO RUN WHEN THE EMPLOYEE KNOWS OR

SHOULD KNOW THAT THE UNION HAS

VIOLATED ITS FAIR REPRESENTATION DUTY,

EVEN IF THIS IS BEFORE THE GRIEVANCE-

AND-ARBITRATION PROCESS IS COMPLETED,

RATHER THAN APPLYING THE "DATE OF

EXHAUSTION" TEST THAT THE STATUTE OF

LIMITATIONS DOES NOT BEGIN UNTIL A

FINAL GRIEVANCE OR_- ARBITRATION

DECISION IS RENDERED WHICH FORMALLY

TERMINATES THE GRIEVANCE-AND-

ARBITRATION PROCEEDING.

In DelCostello v. International Bhd. of Teamsters,

462 U.S. 151 (1983), this Court held that the six-month

period in section 10(b) of the National Labor Relations Act,

which governed the filing of charges with the National Labor

Relations Board, should apply as the statute of limitations in

hybrid § 301/fair representation cases. DelCostello did not

directly address when the claim accrues and starts the statute

of limitations running.’

In considering the specific cases before it in

(continued. ..)

The vast majority of fair representation cases involve

grievance handling by unions. The Circuits are split on

whether the limitations period starts to run when the

grievance-and-arbitration process is concluded (the "date of

exhaustion" test) or when the employee knows or should know

of the facts indicating a breach of the union's duty of fair

representation in the handling of the grievance or arbitration,

even if that is before any formal decision on the employee's

grievance (the "knows or should have known" test).°

The Third Circuit in Childs v. Pennsylvania Fed'n

Bhd. of Maintenance of Way Employees, 831 F.2d 429, 436

(3d Cir. 1987) decided the leading case concluding that the

statute of limitations does not begin to run until the grievance-

and-arbitration proceedings are exhausted with the arbitrator's

final decision. Childs adopted a "date of exhaustion" test as

a bright-line rule because of two policies which underlie

hybrid § 301/fair representation cases (id. at 434-435):

2(.. continued)

DelCostello this Court stated that the date that the adverse

decision was "rendered" would be the date the statute of

limitations began to run, subject to further tolling on the

particular facts of the cases. See id., 426 U.S. at 165 n. 16,

172).

In labeling these two tests, Petitioners do not suggest

that any of the lower courts have used these precise phrases to

label the tests they apply. The labels, however, conveniently

distinguish the two different tests the lower courts have

applied.

First, it seems inefficient and unwise to compel an

employee to sue his union in federal court while the

union continues, in good faith, to pursue the

employee's claims and attempts to remedy any past

breach of its DFR. If the union can indeed remedy the

cause of the employee's dissatisfaction, it should be

allowed to do so, thus obviating federal judicial

involvement. * * * Second, in this case the employee

faces a double disincentive to initiating a DFR suit.

Not only would such action seem inefficient and

premature, but suing the union that is representing him

in front of the Board might also jeopardize his chances

of winning against the railroad in that administrative

forum. Requiring an employee to sue his union as

soon as he discovers the union's breach would place

the employee in an untenable situation--if he waits to

sue the union he may lose the right to do so, but if he

sues the union immediately he may antagonize the best

possible champion of his cause.

The Third Circuit in Childs, supra at 435-36,

considered and rejected a test for accrual based on when the

employee "knew or should have known" of the violation of

the union's fair representation duty. The Third Circuit

concluded that such a test, where a case was proceeding to an

arbitration decision, was unworkable. First, it "may be

impossible to pinpoint the date an employee should have

known further action would be futile." Id. at 436. Second,

such a rule "subverts congressional policy" in favor of

administrative resolution of labor problems. Id. at 436.

Accordingly, because of these policies (id. at 436), Childs

created a bright line rule that the fair representation claim did

not accrue until the arbitral body rejected the employee's

claim. Id. at 436.

The Third Circuit has reaffirmed Childs. Whittle v.

Local 651. International Brotherhood of Teamsters, 56 F.3d

487, 490 (3d Cir. 1995).

The Eleventh Circuit has adopted a similar rule based

on the date of exhaustion of the grievance-and-arbitration

process. Hayes v. Reynolds Metals Co., 769 F.2d 1520,

1522-23 & n. 3 (11th Cir. 1985). In Hayes, the Eleventh

Circuit held that the statute of limitations does not begin to run

until "the grievance procedure has been exhausted or

otherwise breaks down to the employee's disadvantage. * * *

This is, of course, fully consistent with the employee's

obligation to make use of the grievance procedure provided by

the agreement." Jd. at 1522.

The other Circuits, including the Ninth Circuit, have

adopted the rule that the fair representation claim accrues

when the employee "knows or in the exercise of reasonable

diligence should have known or discovered the acts

constituting the union's alleged violations." Lucas v.

Mountain States Tel. & Tel., 909 F.2d 419, 420 (10th Cir.

1990); accord: Ghartey v, St. John's Queens Hosp., 869 F.2d

160, 163 (2d Cir. 1989); International Association of

Authority, 108 F.3d 658, 667 (6th Cir. 1997); Dowty v.

Pioneer Rural Electric Cooperative, 770 F.2d 52, 57 (6 Cir.

1985) cert. denied 474 U.S. 1021; Metz _v. Tootsie Roll

Industries, Inc., 715 F.2d 299, 303-304 (7th Cir. 1983) cert.

denied 464 U.S. 1070; eee Tinion, No._135,

1316, 1319 (7th Cur. 1984): es Was Wort Aldine,

Inc., 89 F.3d 635, 640 (9th Cir. 1996); Galindo v. Stoody

Co, (9 Cir. 1986) 793 F.2d 1502, 1509 (9th Cir. 1986);

Edwards v. | ‘onal Union. United Plant Guard Workers.

46 F.3d 1047, 1054 (10th Cir. 1995).

In many of these cases using the "know or should have

known" test, the other Circuits reached the same result as

would have been reached under the "date of exhaustion" test.

Ghartey v. St. John's Queens Hosp., supra, 869 F.2d 160,

163-165; Dowty v,. Pioneer Rural Electric Cooperative, supra,

770 F.2d at 57; Freeman vy. Local Union No, 135,

Chauffeurs. Teamsters, Warehousemen and Helpers, supra,

746 F.2d at 1319; Galindo v. Stoody Co., supra, 793 F.2d

1509; Lucas v. Mountain States Tel. & Tel., supra, 909 F.2d

at 420-21.

However, other cases have reached very different

results using the "know or should have known" test rather

than the "date of exhaustion" test. See Metz v. Tootsie Roll

Industries, Inc., supra, 715 F.2d at 303-304 (no formal

decision by union not to peeeeee grievance but employee

should have realized that union's silence was equivalent of

denial of the grievance); International Association of

Machinists and Aerospace Workers v. Tennessee Valley

Authority, supra, 108 F.3d at 667 (where a group of similar

grievance were filed at the same time, statute accrues when

union refuses to arbitrate earlier grievances in group because

that is when employees know of the basis for their fair

representation claim); Buttry v. General Signal Corp., 68

F.3d 1488, 1491-1493 (2d Cir. 1995) (date employees knew

of union's opposition to their position rather than date of

arbitration decision interpreting the collective bargaining

agreement).

The decision below represents the difference in result

between the "knew or should have known" test and the "date

of exhaustion" test. The Ninth Circuit recognized that the

action was brought within six months of the JWAC's decision

of November 8, 1993, but more than six months after the

Union told Petitioners that it would not be their

"spokesperson" at this hearing. The action was Clearly timely

under the "date of exhaustion" test.

However, applying the "knew or should have known"

test, rather than the "date of exhaustion" test, the Ninth

Circuit concluded that Petitioners knew of the facts underlying

the fair representation claim before the JWAC hearing, and

should have brought their claim based on the earlier date of

such knowledge, rather than await the outcome of the JWAC

hearing (App. pp. 10a-11a)

, Supra, 68 F.3d 1488,

upon which the Ninth Circuit relied in the case below, also

demonstrates the difference in result between the two tests. In

Buttry, two unions (Machinists and Glass Workers) were

Signatory to identical contractual terms with an employer.

One took the dispute to arbitration (Machinists), the other

(Glass Workers) refused to file a grievance. The Machinists

ultimately prevailed in the arbitration. Based on that result,

the employees represented by the Glass Workers instituted an

action for breach of the duty of fair representation because of

the Glass Workers' refusal to pursue their grievance based on

the same facts as the successful Machinists’ arbitration.

The employees argued that their claim against the

Glass Workers union should not accrue until the arbitrator

issued a decision in the Machinists' case on the application of

the common contractual provision to the common facts

involving employees represented by both unions (Buttry,

supra, 68 F.2d at 1491).

The Second Circuit rejected the employees’ argument.

The Second Circuit held instead that the fair representation

claim accrued under the "knew or should have known" test

when the employees knew that the Glass Workers would not

file a grievance (Buttry, supra, 68 F.2d at 1492-93). The

Second Circuit distinguished the Childs line of cases on the

grounds that those cases did not involve a union which was

"manifestly opposing, rejecting or abandoning the interests or

claims of a member, but rather with a union purporting to

fulfill its duty of fair representation throughout the arbitration

process" (jd. at 1492-93).‘

The Sixth Circuit, also applying the "knew or should

have known" test, has also held fair representation claims

accrued before the completion of the grievance-and-arbitration

proceedings from which the fair representation claims arose.

International Association of Machinists and Aerospace

Workers v. Tennessee Valley Authority, supra, 108 F.3d at

The fact that two different unions were involved in

Buttry is not dispositive. Since the arbitration involved a

common contractual provision and its application to a

common factual situation, the policy in favor of exhaustion

would apply even though a different union was formally

pursuing the arbitration. A Federal district court, faced with

a fair representation action in this circumstance, would not

clearly err in staying its proceedings pending the outcome of

such an arbitration.

667. Tennessee Valley Authority involved multiple

grievances arising from common or identical facts filed by the

Machinists Union (the IAM) who represented the employees.

Although the grievances were filed at the same time, decisions

- on the grievances were made at different times. Id. at 660.

The Sixth Circuit concluded that the claim accrued when the

Joint Administrative Council ("JAC"), a joint union-employer

board (id. at 660), denied the earlier grievances in the series.

Applying the "knew or should have known test", the Sixth

Circuit held that, because the earlier rejections "of both the

merits of the grievances and the requests for arbitration were

also based on identical reasoning," the employees and the

IAM "should have known as of October 2, 1992, at the latest,

that the JAC's position was unequivocal. The statute began to

run on that date" notwithstanding the fact that the final

grievance of the group had not yet been resolved. Id. at 667.

The "knew or should have known" test undermines the

important policy of exhaustion of internal grievance-and-

arbitration procedures which is a bedrock principle in this

Court's jurisprudence governing the enforcement of collective

bargaining agreements. In adopting the "know or should have

known" test, the lower courts have failed to focus on the

underlying policy which led this Court to establish the duty of

fair representation: As a means for employees to avoid the

otherwise harsh result of the finality of arbitration where

access to arbitration is controlled by the union. DelCostello

y. International Bhd. of Teamsters, supra, 462 U.S. at 164.

Absent a breach of the union's fair representation duty, the

results of a grievance-and-arbitration process is final and

binding on the employee.

Since the rationale for the duty of fair representation

arises from the tension between the finality of such procedures

and the union's control over the grievance-and-arbitration

process, a fair representation claim can only accrue when the

grievance-and-arbitration process concludes, either through an

arbitration decision or through some action by the union

formally terminating the pre-arbitration grievance procedure.

In adopting the "date of exhaustion" test, the Third

Circuit in Childs correctly focused on the policy that the

internal grievance process should be pursued to conclusion

before the -.nion should be accused of failing in its fair

representation duty. Childs, supra, 831 F.2d at 436. In

rejecting the "know or should have known" test in this

context, the Third Circuit reasoned that the "knew or should

have known" test "subverts congressional policy" in favor of

the exhaustion of arbitration procedures before resort to

federal courts (id.):

"Logically, one may distinguish between the

right to sue before administrative grievances

have been exhausted and the duty to do so.

However, we believe that imposing such a duty

would exact a heavy toll on the policy favoring

administrative resolution of labor problems and

would clog the federal courts with premature,

defensive lawsuits."

The Third Circuit reaffirmed the logic behind the "date

of exhaustion" test in Whittle, supra, 56 F.3d at 490,:

"[T]here was no way for the employees to

know whether they suffered any loss from the

union's alleged breach until the arbitration

decision was issued. It is possible that

appellants could have won the arbitration, even

if the union's zeal fell below the horizon of fair

representation owed them."

The Ninth Circuit below (App. pp. 10a-11a) as well as

the Second Circuit in Buttry, supra, 68 F.3d at 1492-93,

believed that there should be a difference in the date of accrual

based on whether or not the union is actively representing the

employee in the arbitration process or was opposing the

employees.

The Ninth Circuit's distinction between "flawed

representation" (App. p. 10a) and "a failure to represent at

all" (App. p. 11a) means nothing in terms of the exhaustion of

the grievance-and-arbitration proceedings. By whatever

means the grievance-and-arbitration process is exhausted--by

the union, by the employees independently of the union or by

a series of miscues and other events, as in this case--

exhaustion is the rule of federal labor policy.

In fact, this distinction is incapable of meaningful

application. The Ninth Circuit itself has recognized that a

union does not breach its duty of fair representation even by

refusing to represent employees in an arbitration proceeding,

so long as the union takes steps to insure the employees will

be able to attend and represent themselves fairly at the

hearing. Singer v. Flying Tiger Line, Inc., 652 F.2d 1349,

1355 (9th Cir. 1981). There is no reason to impose upon

unions the absolute duty to "represent" employees in

arbitration proceedings if the union can otherwise fulfill its

fair representation duty with alternative means of ensuring

employees fair access to the arbitration process.°

The Second Circuit's distinction between unions who

are "purporting to fulfill its duty of fair representation"

(Buttry, supra, 68 F.3d at 1492) and unions "manifestly

opposing, rejecting or abandoning the interests or claims of a

member" (jd.) is equally meaningless in terms of the

exhaustion of the grievance-and-arbitration process. So long

as the process is continuing to a final resolution, the union's

attitude towards the member or his claims is irrelevant. The

real consequence of the union's attitute cannot be determined

until the grievance-and-arbitration process concludes. There

is no reason to abandon the process simply because the union's

attitute may enhance the possibility of loss. To the contrary,

it should be in the interest of the union to make the process

work notwithstanding its opposition or hostility to the member

or his claims. It is unquestionably in the interests of Federal

labor policy to encourage the grievance-and-arbitration process

to continue to conclusion before involving the Federal courts

in the dispute.

For these reasons, the bright-line test using the date the

grievance-and-arbitration process is final is the appropriate test

to apply in fair representation cases which concern the

Petitioners have contended that the Union's failure of

duty in this case consisted of a failure to respond to their

inquiries on the facts and the Union's understanding of

contract terms (see App. pp. 51a-54a) and inadequate notice

and assistance for the JWAC hearing, as well as a biased

panel member on the JWAC hearing panel.

handling of grievance-and-arbitration cases. This is the test

that is supported by Federal labor policy favoring exhaustion

of internal procedures and the decisions of this Court.

The test based on when the employees knows or should

know of the breach of fair representation is inconsistent with

and fails to advance Federal labor policy encouraging the use

of internal dispute resolution procedures under collective

bargaining agreements. This test focuses on the relationship

of the union and the member and their conduct towards each

other, rather than when the internal proceedings have come to

an end. The union-member relationship, however important

for the merits of the fair representation claim, are irrelevant

to the policy that internal proceedings must be exhausted

before resort to the courts.

The conflict in the Circuits as to which test to apply,

unless resolved by this Court, will continue to result in

inconsistent and unpredictable results. In particular,

employees and union members, who must make critical

decisions when or if to bring a fair representation action, are

at substantial risk of waiting too long if they await the

conclusion of the grievance process, yet undermining their

hopes of victory in the grievance-and-arbitration proceeding

if they sue before the process is over. Federal courts,

receiving a protective pre-exhaustion lawsuit, will be put to

the unnecessary burden of determining whether to proceed

with the court action or themselves await the outcome of the

ongoing internal process.°

Petitioner assume that the district courts will need to

(continued...)

CONCLUSION

For the foregoing reasons, Petitioners submit that a

Writ of Certiorari should issue.

Respectfully submitted,

CHRISTOPHER W. KATZENBACH

Counsel of Record

KATZENBACH AND KHTIKIAN

Attorneys at Law

1714 Stockton Street, Suite 300

San Francisco, CA 94133-2930

Telephone: (415) 834-1778

°(...continued)

make a reasoned decision whether or not to stay their

proceedings pending the outcome of the grievance-and-

arbitration process. If the district courts were automatically

obligated to stay their proceedings, then forcing employees to

file pre-exhaustion fair representation lawsuits would seem

entirely pointless.

APPENDIX

TABLE OF CONTENTS

Page No.

Judgment, United States District Court

for the Northern District of California,

ae Et Oa la

Order for Summary Judgment,

United States District Court

for the Northern District of California,

8 EL ee 2a

Memorandum, United States Court of

Appeals for the Ninth Circuit,

awa ewe 9a

Order, United States Court of Appeals

for the Ninth Circuit, filed 4/21/97 ................ 12a

Opinion, United States Court of

Appeals for the Ninth Circuit,

I to ows ks cn eek es 13a

Order, United States District Court

for the Northern District of California,

Rae ie Sa a 27a

Excerpts from Defendant Western Conference of

Teamsters Amended Answers to Plaintiffs’

Interrogatories, United States District Court for

the Northern District of California ................ 29a

Excerpts from Deposition of Roy Re taken

IS 33a

Excerpts from Deposition of Thomas J. LaGrave

Mea sye..................008.. 42a

Excerpts from Minutes of California Trucking

Association Committee, 11/8/93 .................. 47a

Letter to Christopher W. Katzenbach

from Duane B. Beeson, dated 12/8/92 ............. 50a

Letter to Duane B. Beeson from

Christopher W. Katzenbach, dated 12/18/92 ......... Sla

Letter to Duane B. Beeson from

Christopher W. Katzenbach, dated 5/5/93 ........... 52a

Letter to Christopher W. Katzenbach

from Duane B. Beeson, dated 7/28/93 ............. 55a

Letter to Christopher W. Katzenbach

from Duane B. Beeson, dated 11/2/93 ...........-. 57a

Excerpts from Agreement between

CF Air Freight, Inc. and Teamster Local 85

(4/1/88 - 3/31/91) ............................. 59a

-ii-

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROD MCKINNEY; and CF AIR

FREIGHT EMPLOYEES,

Plaintiffs,

v. No. C-94-1608 CAL

CORPORATION,

d/b/a EMERY WORLDWIDE,

A CF COMPANY, et al.,

)

‘

EMERY AIR FREIGHT )

)

Defendants. )

)

JUDGMENT

For the reasons set forth in the order for summary

judgment signed and filed this date, judgment is hereby entered

in favor of defendants and against plaintiffs.

Dated: February 28, 1996.

(s)

CHARLES A. LEGGE

UNITED STATES DISTRICT JUDGE

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROD MCKINNEY; and CF AIR

FREIGHT EMPLOYEES,

Plaintiffs,

v. No. C-94-1608 CAL

CORPORATION,

d/b/a EMERY WORLDWIDE,

A CF COMPANY, et al.,

)

EMERY AIR FREIGHT )

)

Defendants. )

)

ORDER FOR SUMMARY JUDGMENT

Defendant Emery Air Freight Corporation has moved for

summary judgment. The motion has been opposed, briefed,

argued and submitted for decision. The court concludes that

there are no genuine issues of material fact; that the decisions

are all ones of law; and that summary judgment must be granted

in favor of defendant on the ground of the statute of limitations.

This is the second action brought by plaintiffs against

Emery. The underlying dispute concerns the coverage of the

company’s work force under a collective bargaining agreement,

following a corporate merger and work force consolidation

involving Consolidated Freightways and Emery. In the first

action (C-89-2649) this court ruled that the Consolidated

Freightways agreement remained in effect, but that Emery was

entitled to summary judgment because plaintiffs had not

exhausted the grievance procedures and plaintiffs had not

demonstrated a breach of the duty of fair representation by the

union.

That decision was reversed by the Ninth Circuit. The

circuit held that the question of whether the Consolidated

Freightways agreement remained in effect after the consolidation

was an issue which was required to be resolved through

arbitration and should not have been resolved by this court.

When the matter was remanded to this court, the parties

disagreed about what arbitration proceudres should be used.

This court then held that the dispute should be resolved through

the Joint Western Area Committee’s grievance procedures

contained in the collective bargaining agreement.

il.

The issue in the present case is what happened after that,

and what statute of limitations is applicable. A decision on the

effectiveness of the collective bargaining agreement was made

by the JWAC on November 8, 1993. The JWAC issued a

decision finding that the collective bargaining agreement did not

follw the former Consolidated Freightway employees to the

Emery terminals when they were integrated into the Emery

work force; that it did not continue to control their working

conditions at Emery; and that it had no continuing effect after

the work force consolidation.

Il.

Plaintiffs filed this action on May 6, 1994. They allege

a “hybrid” claim for breach of the collective bargaining

agreement by Emery, and a breach of the duty of fair

representation by the union. Section 301 of the L.M.R.A., 20

U.S.C. § 185, provides that employees have a federal cause of

action against their employers for breach of a collective

bargaining agreement. However, in order to proceed with a

Section 301 suit against their employer, the employees must

show not only a breach of the collective bargaining agreement,

but must also demonstrate that the union breached its duty of

fair representation. Schlacter-Jones v. General Telephone, 936

F.2d 435 (9 Cir. 1991). United Parcel Service v, Mitchel, 451

U.S. 56 (1981); Shane v. Greyhound Lines, Inc., 868 F.2d 1057

(9" Cir. 1989).

Defendant moves for summary judgment on the ground

that plaintiffs’ suit for a breach of the duty of fair representation

is barred by the statute of limitations. All sides agree that the

applicable statute is the six month statute under Section 10(b)

of the National Labor Relations Act. Delcostello v. Teamsters,

462 U.S. 151 (1983); Peterson v. Kennedy, 771 F.2d 1244 (9"

Cir. 1985).

Plaintiff contends that the statute did not begin to run

until the date of the JWAC decision, November 8, 1993. Their

filing on May 6, 1994 would then be within the six month

period. Defendant contends that the six months started sooner,

when plaintiffs were advised by the union that the union would

not represent them in the JWAC proceedings.

IV.

Because of the applicable case law, the resolution of the

dispute requires a more specific identification of what the

alleged breach of the duty of fair representation is here, as well

as an examination of the communications between the union and

plaintiffs leading up to the JWAC hearing.

The most applicable Ninth Circuit authority is Galindo

v. Stoody Co,, 793 F.2d 1502 (9 Cir. 1986). The court there

said (p. 1509) that the six month period generally begins to run

when the employee knows or should know of the alleged breach

of the duty of fair representation by the union. In that case, the

court was concerned with two potential breaches of the duty.

One was the conduct of the union prior to the grievance hearing.

The other was how the union presented the grievance to the

grievance panel. The court held that when the claims concern

the question of how the grievance was presented by the union,

the statute of limitations would be tolled until that date. In

essence, the conduct of the union prior to the hearing was

merged into its conduct at the hearing.

That is not the situation presented here. Plaintiffs do

attempt to argue about the manner in which the grievance was

presented to the JWAC. But in reality, there was no conduct by

the union at the hearing. Indeed, the whole issue in this dispute

is whether the union improperly declined to represent plaintiffs

at the hearing at all. In such a setting, where the union declines

to represent the employees at a grievance hearing, there is no

guidance from the Ninth Circuit on when the statute should

accrue.

We do have the guidance of an analogous decision from

the Second Circuit, Buttry v. General Signal Corporation. 68

F.3rd 1488 (2d Cir. 1995). The Second Circuit there

distinguished between a claimed breach of the duty of fair

representation based upon doing a poor job at the grievance

hearing, versus a claim based upon the union’s refusal to

represent employers at the hearing at all. The court there held

that the statute begins to accrue when the plaintiffs-employees

became aware that the union would not represent their interests.

And the court held that such a claim is not saved by equitable

estoppel or equitable tolling.

We must then turn to the factual history of when the

plaintiffs knew or should have known that the union would not

represent them at the JWAC hearing. There are no genuine

issues of material fact regarding the following communications:

The issue of representation first arose at the hearing at

which this court decided that the procedures to be used were

those of the JWAC. At that hearing, counsel for the union

advised the court and plaintiffs’ counsel that the union would

take responsibility for allowing the plaintiffs to rpesent their case

before the JWAC. This court questioned the union counsel as

to whether, in view of the adversary positions that had been

taken in this litigation, the union could really represent the

plaintiffs’ position. Union counsel said that they could do so,

primarily by making sure that plaintiffs, through their own direct

participation in proceedings before the JWAC, would be able to

make their case and say everything they wanted to. That was in

August 1992.

In December 1992 union counsel sent a letter to

plaintiffs’ counsel stating that the union was deferring

submitting the dispute to the JWAC, so that plaintiffs could if

they wish, submit a new grievance which would update the

issues to be arbitrated. There were then some communications

from plaintiffs’ counsel to the union’s counsel, but nothing was

resolved.

The key communication for the purposes of this dispute

is a letter of July 28, 1993 from the union’s attorney to the

plaintiffs’ counsel. In that letter, the union counsel stated: “In

view of the history of the positions taken by the parties at

various stages of the proceedings, [the union] does not believe-

it appropriate to be the spokesperson at JWAC for [plaintiffs].

A representative of [the union] will attend the hearing and will

take appropriate steps to insure that [plaintiffs] will have a full

opportunity to present their case.”

This was an unequivocal statement by the union’s

counsel that the union would not represent the plaintiffs at the

JWAC hearing, but would do no more than procedurally keep

the proceedings open for plaintiffs to present their own case.

Other communications followed, including letters

directly from the union to plaintiffs, to advise plaintiffs of the

dates of the hearing and whom to contact for further

information. At the first hearing, scheduled for August 1993,

the hearing was postponed because no plaintiffs appeared. The

hearing was continued until November. The union counsel

advised plaintiffs’ counsel of the November hearing and the

persons to contact. The record indicates that neither the union

counsel nor the union received any reply to those

communications, and no representative of plaintiffs contacted

the hearing officer about the hearing. At the hearing on

November 8, 1993, a representative of the union was present.

However, no one appeared on behalf of plaintiffs. The JWAC

then made its decision adverse to plaintiffs.

It is apparent that any possible breach of the duty of fair

representation does not concern how good a job the union did

at the JWAC hearing. The union was present, but there was no

representative of plaintiffs. And plaintiffs were clearly told

ahead of time that the union would not represent their interests

at the hearing, but would only be there to be sure that the

plaintiffs had an opportunity to be heard themselves.

This record demonstrates that the real claim is that the

union declined to represent plaintiffs. That position was clearly

stated to plaintiffs on July 28, 1993. At that time plaintiffs both

knew, and should have known, that the union would take no

action to represent them before the JWAC. The statute of

limitations on that claim therefore accrued in July 1993.

There is no basis for plaintiffs’ contending that the staute

of limitations was tolled or that the union is equitably estopped.

Plaintiffs simply took no action in response to the union’s

communications. Plaintiffs made no attempt to use the grievanc

hearing in good faith, and really did nothing at all. The union

did not mishandle the grievance hearing on November 8.

Indeed, it did what it said it would do -- see that the procedures

were open for plaintiffs to make their own presentation.

The court therefore concludes that this action, diled in

May 1994, was outside of the statute of limitations. IT IS

THEREFORE ORDERED that summary judgment be entered

in favor of defendants.

Dated: February 28, 1996.

(s)

CHARLES A. LEGGE

UNITED STATES DISTRICT JUDGE

NOT FOR PUBLICATION

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ROD McKINNEY; CF AIR _)

FREIGHT EMPLOYEES _) No. 96-15602

Plaintiffs-Appellants, )

v. ) D.C. No. CV-94-01608-CAL

)

EMERY AIR FREIGHT ) MEMORANDUM*

CORPORATION, )

Defendant-Appellee. )

)

Appeal from the United States District Court

for the Northern District of California

Charles A. Legge, District Judge, Presiding

Argued and Submitted February 12, 1997

San Francisco, California

Before: SCHROEDER and O’SCANNLAIN, Circuit

Judges, and KELLEHER, ** District Judge.

Rod McKinney and other CF Air Freight (“CFAF”)

employees appealed the district court’s summary judgment in

*This disposition is not appropriate for publication and may not

be cited to or by the courts of this circuit except as provided by

Ninth Circuit Rule 36-3.

**Honorable Robert J. Kelleher, Senior United States District

Judge for the Central District of California, sitting by

designation.

favor of Emery Air Freight Corporation, d/b/a Emery Worldwide

(“Emery”). McKinney brought this “hybrid” action pursuant to

section 301 of the Labor Management Relations Act of 1947, 29

U.S.C. § 185(a), alleging Emery’s breach of a collective

bargaining agreement and the International Brotherhood of

Teamsters’ breach of its duty of fair representation following a

CFAF/Emery corporate merger and work force consolidation.

After several years of litigation, the issue of whether Emery is

bound by the terms of a prior collective bargaining agreement

was submitted to a Joint Grievance Committee. Following a

hearing conducted in the absence of plaintiffs, the Committee

decided that Emery was not bound by the contract. This appeal

involves the employees’ claims that the union breached its duty

of fair representation in connection with the grievance

proceeding.

The employees’ principal claim is that the union greached

its duty by refusing to represent them at the grievance hearing.

The district court ruled that this claim was bared by the six-

month statute of limitations, because plaintiffs received notice

that the union would not represent them more than six months

before the complaint was filed in district court. See DelCostello

y. Teamsters, 432 U.S. 151, 172 (1983). Plaintiffs contend on

appeal that the district court erred because when the claim of

breach of duty of fair representation involves a grievance or

arbitration proceeding the claim does not accrue until the

plaintiffs learn the result of the proceeding. The Ninth Circuit

authority relied on by plaintiffs, however, establishes no such

bright line rule. See Galindo v. Stoody Co., 793 F.2d 1502, 1509

(9" Cir. 1986) (where union decides not to bring grievance at all,

cause of action accrues “when the employee learns or should

have learned of the union’s decision”). Kozy v. Wings West

Airlines, 89 F.3d 635 (9" Cir. 1996), is distinguishable because

it involved a union’s allegedly flawed representation at an

10a

arbitration hearing, rather than a failure to represent al all, and

because its ruling was based on jurisdictional requirements not

present here. See id. At 637-40. The district court correctly

concluded this case was most analogous to the Second Circuit’s

decision in Buttry v. General Signal Corp., 68 F.3d 1488 (2d

Cir. 1995), and out circuit law is not inconsistent with that

decision. See Galindo, 793 F.2d at 1509.

Appellants also contend that the union breached its duty

by failing to give them adequate notice of the grievance hearing.

Here again we agree with the district court that the appellants

received ample notice in the July and November letters. The

letters told the appellants that their grievance would be

considered at the upcoming meetings, and instructed them to

call for precise details. They never did, and have offered no

explanation for their failure to do so.

Finally, appellants contend that they have an independent

claim of breach in connection with the role that Archie Murrietta

played in the conduct of the grievance proceeding, and that they

could not have known of this claim until the November 8

hearing. The record shows, hoever, that despite receiving

notice, appellants never appeared at the hearing and did nothing

to protect their interests there. We agree with the district court

that appellants did “nothing at all” to avail themselves of the

grievance process. They should not now be heard to complain

about the manner in which it was conducted.

AFFIRMED

lla

NOT FOR PUBLICATION

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ROD McKINNEY; CF AIR )

FREIGHT EMPLOYEES __) No. 96-15602

Plaintiffs-Appellants, )

v. ) D.C. No. CV-94-01608-CAL

EMERY AIR FREIGHT

CORPORATION,

Defendant-Appellee.

(Northern California)

ORDER

ft ee

Before: SCHROEDER and O’SCANNLAIN, Circuit

Judges, and KELLEHER,* District Judge.

The panel as constituted above has voted to deny the

petition for rehearing and to reject the suggestion for rehearing

en banc.

The full court has been advised of the suggestion for

rehearing en banc and no judge of the court has requested a vote

on the suggestion for rehearing en banc. Fed. R. App. P. 35.

The petition for rehearing is denied and the suggestion

for rehearing en banc is rejected.

*Honorable Robert J. Kelleher, Senior United States District

Judge for the Central District of California, sitting by

designation.

12a

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JAR 2s SS

Rop McKinney and CF Ar

FREIGHT EMPLOYEES,

Plaintiffs-Appellants/ Nos. 90-15600

Cross-Appellees, 90- 15613

5 , D.C. No.

EMERY AIR FREIGHT CORPORATION, CV-89-2649-CAL

d/b/a Emery Wor_pwipe, A CF OPINION

CoMPANY,

Defendant-Appellee/

Cross-Appellant.

Appeal from the United States District Court

for the Northern District of California

Charles A. Legge, District Judge, Presiding

Argued and Submitted

December 11, 1991—San Francisco, California

Filed January 23, 1992

Before: Ruggero J. Aldisert,* Alfred T. Goodwin and

John T. Noonan, Jr., Circuit Judges.

Opinion by Judge Aldisert

*Ruggero J. Aldisert, Senior Judge, United States Court of Appeals for

the Third Circuit, sitting by designation.

13a

692 McKinney v. EMERY AIR FREIGHT Corp.

SUMMARY

Labor/Arbitration

Reversing and remanding a district court grant of parual

Summary judgment, the court of appeals held that whether a

collective bargaining agreement had terminated after consoli-

dation of different workforces was a quesuon to be properly

decided by an arbitrator rather than by the distnct court.

Appellants Rod McKinney and CF Air Freight Employees

brought an action under Sec. 301(a) of the LMRA requesting

a declaration that a CBA was in full force and effect as

between the union and a successor employer, Emery Air

Freight Corporation. Rather than an arbitrator, as specified in

the agreement, the district court decided that it would deter-

mine the vitality of the agreement The district court granted

partial summary judgment for the appellants, concluding that

Emery was bound by the CBA.

[1] A dispute over whether a contract ever existed must be

decided by a court. The issue over whether that contract has

expired, or has been terminated or repudiated is for the arbi-

trator if the breadth of the arbitration clause is not in dispute.

[2] To interpret such an agreement and to determine whether

a contract has been terminated or abrogated, the governing

criteria are not judge-made principles of the common law but

the practices, assumptions, understandings, and aspirauons of

the going industrial concern referred to by the Supreme Court

as “the industial common law.” [3] From the facts and cir-

cumstances of this case, the court concluded that a labor con-

tract between the union and the successor employer did exist

at one ume. What remained to be determined was whether the

contract existed only for limited purposes, and whether the

contract remained in effect after the consolidation of the work

forces. Accordingly, the matter was remanded for a determi-

nauon by an arbitrator whether Emery was bound by a labor

14a

McKinney v. Emery Ar Freicut Corp. 693

agreement covering the subject matter of the appellants’ com-

plaint.

COUNSEL

Christopher W. Katzenbach, San Francisco, California, for the

plainuffs-appellants/cross-appellees.

William J. Emanuel, David J. Hamilton, Morgan, Lewis &

Bockius, Los Angeles, California, for the defendant-appellee/

Cross-appellant.

OPINION

ALDISERT, Circuit Judge:

Several issues have been presented in these consolidated

appeals by former employees of CF Air Freight, Inc. (herein-

after “the McKinney plaintiffs”) at No. 90-15600, and by

Emery Air Freight Corporation at No. 90-15613, but the ques-

tion that controls our decision is whether the district court

erred by not ordering the parties to arbitrate the question

whether a collective bargaining agreement between the Mc-

Kinney plaintiffs’ employer and Local 85 of the Teamsters

Union had been terminated.

The issue arises in an action brought by the McKinney

plainuffs against Emery under Section 301(a) of the Labor

Management Relations Act, 29 U.S.C. § 185(a), requesting a

declaration that the collective bargaining agreement was in

full force and effect, and damages for the breach thereof.

Largely influenced by the parties’ united request that the court

meet the issue, rather than an arbitrator, the district court

decided that it would determine the Vitality of the agreement.

It concluded that Emery was bound by an agreement with

15a

694 McKinney v. EMery Am FREIGHT Corp.

Teamster Local 85, and entered partial summary judgment for

the McKinney plaintiffs on this issue.

The court denied the plaintiffs further relief, holding that

because the core item of claimed damages resulted from an

alleged loss of their seniority status, the plaintiffs’ claims

must proceed through the grievance procedures of the agree-

ment before they can be considered by the court. Accordingly,

the district court entered summary judgment in favor of

Emery on the damages issue. On appeal, the McKinney plain-

uffs contend that the court erred in requiring them to exhaust

the grievance mechanism; Emery argues that the court erred

in concluding that it was bound by the Local 85 agreement.

The district court’s jurisdiction was premised on 29 U.S.C.

§ 185(a). We have appellate jurisdiction under 28 U.S.C.

§ 1291. The appeals were umely filed under Rule 4{A),

F.R.A.P.

The McKinney plainuffs offer at least two reasons why

they should be excused from pursuing the grievance remedies

under the Local 85 agreement: (1) Emery’s refusal to recog-

nize the agreement constituted a repudiation of the contractual

remedy and (2) Local 85 breached its duty of fair representa-

tion. For its part, Emery contends that the Local 85 agreement

was abrogated by the ruling of the Regional Director of the

Nauonal Labor Relations Board that as of April 17, 1989, the

date of the consolidation of the work forces, Local 85 ceased

to be the sole collective bargaining representative of the for-

mer CFAF employees. Since that date, they have been joinuy

represented by Teamster Locals 70, 85 and 287. See Emery

Air Freight Corp. v. International Bhd. of Teamsters, Chauf-

feurs, Warehousemen & Helpers of Am., Local Union No. 85,

No. 32-UC-252 (N.L.R.B. May 14, 1990).

We asked the parties to brief and argue the question

whether the continued existence of the Local 85 collective

16a

McKinney v. EMery AIR FREIGHT Corp. 695

bargaining agreement should have been referred to arbitration.

The agreement contained an arbitration clause covering

“{aJny grievance or controversy” between the parties. We

asked the litigants here to consider two recent cases of this

court holding that disputes over contract terminations are for

arbitrators and not the courts: Camping Constr. Co. v. District

Council of Iron Workers, 915 F.2d 1333, 1338-39 (9th Cir.

1990), cert. denied, _ U.S. _, 111 S. Ct. 1684 (1991), and

Brotherhood of Teamsters & Auto Truck Drivers Local No. 70

v. Interstate Distrib. Co., 832 F.2d 507, 509-12 (9th Cir.

1987). -

After considering the supplemental briefing and hearing

oral argument on this issue, and after evaluating the compli-

cated factual scenario, we are persuaded that the question

whether the May 15, 1989, written instrument constitutes a

binding labor agreement supporting the McKinney plaintiffs’

Claims is a matter properly determined by an arbitrator rather

than by the court. Accordingly, we vacate the judgment of the

district court and remand these proceedings with a direction

that the district court refer the question of the contract’s via-

bility to arbitration.

Il.

We review de novo a district court's grant or denial of sum-

mary judgment. Tzung v. State Farm Fire & Casualty Co.,

873 F.2d 1338. 1339-40 (9th Cir. 1989). Viewing the evi-

dence in the light most favorable to the nonmoving party, we

must determine whether any genuine issues of fact exist and

whether the district court correctly applied the relevant sub-

stantive law. Judie v. Hamilton, 872 F.2d 919, 920 (9th Cir.

1989).

ITI.

The dispute arose after the merger and consolidation of

CFAF and Emery, two shipping companies with a number of

17a

696 McKimney v. Emery AIR FREIGHT Corp.

terminals in the San Francisco area. The plainuffs are Rod

McKinney, a former CFAF employee currently working for

Emery, and CF Air Freight Employees, an organization of

dock workers and truck drivers formerly employed by CFAF.

Before the merger, the McKinney plainuffs worked for

CFAF, where they constituted a single bargaining unit repre-

sented by Teamster Local 85. Workers in the old Emery com-

pany also constituted a single bargaining unit, but they were

jointly represented by Teamster Locals 70, 85 and 287.

In early 1989, CFAF employees were working under an

extended collective bargaining agreement that was due to

expire on March 31, 1989. Negouations between Local 85

and CFAF had produced a final offer from the company,

which the employees had not approved. Meanwhile, Consoli-

dated Freightways, Inc., the parent company of CFAF, pur-

chased all of the outstanding shares of the old Emery

company on March 31, 1989. Consolidated Freightways

merged its two companies—CFAF and the old Emery—on

April 6, 1989, retaining the Emery name as the ttle of the

new company. Realizing that a consolidation of operations

was in the works and that their terminal was likely to be

closed, the CFAF employees voted to accept the final offer on

April 9, 1989, three days after CFAF had ceased to exist.

Emery did indeed plan to close the CFAF terminal. In pur-

suit of this goal, an interim Change of Operations agreement

was signed on April 13, 1989, by Emery and by the local

unions on behalf of Emery employees. The agreement desig-

nated a Change of Operations Committee and set forth guide-

lines concerning senionty and workplace assignments that

would govern the consolidation of the work forces. Consoli-

dauon commenced according to the terms of this agreement.

Loca] 85, however, continued to assist the former CFAF

employees in pursuing a collective bargaining agreement with

the successor company. On May 15, 1989, a Local 85 official

18a

McKinney v. Emery Amr Freicut Corp. 697

and Emery’s corporate counsel signed an instrument on behalf

of “Teamster Local 85” and “CF Air Freight, Inc.” Below the

Local 85 signatory appears the handwritten notation:

“Ratified April 10, 1989." What muddies the factual and legal

waters are two critical circumstances. First, although the con-

tract names “CF Air Freight, Inc.” as one of the parties, CFAF

had ceased corporate existence five weeks before, on April 6,

1989. Second, the Regional Director of the National Labor

Relations Board has ruled that as of April 17, 1989, the date

of the consolidation of the work forces, Teamster Local 85,

the signatory to the instrument, was not the employees’ only

collective bargaining representative: they were represented

jointly by Teamster Locals 70, 85 and 287. Emery Air F reight

Corp., No. 32-UC-252 (N.L.R.B. May 14, 1990).

Eberhard G. H. Schmoller, Emery’s Vice President and

Corporate Counsel. stated in a declaration in support of

Emery’s motion for summary judgment

6. The CFAF driver/dockmen voted to accept the

offer on April 9, 1989, three days after the merger of

the CFAF and Emery corporate entities. They were

given the wage and benefit increases retroactive to

April 1, 1988. In order to confirm in writing the

basis for the wage increase—and especially for the

basis for the pension contribution increase—Local

85 asked Emery (CFAF’s successor-in-interest) to

Sign an agreement consisting of the offer CFAF had

previously made.... The document was signed by

me on behalf of CFAF. I was responsible for making

the decision to sign the agreement on behalf of

Emery/CFAF. The sole motivation in Signing the

agreement was to facilitate the payment of retroac-

tive wage and pension increases.

Schmoller Declaration at 3-4; Supp. E.R. 15 at 3-4.

On May 16, 1989, the Change of Operations Committee

held a formal hearing and set final terms for work force con-

19a

698 McKinney Vv. EMERY Ai FreiGHT Corp.

solidation. A disagreement over seniority was referred to the

National Grievance Committee, which resolved the matter on

August 10, 1989.

The McKinney plaintiffs assert that the consolidation vio-

lated their rights under numerous provisions of the May 15

agreement, and take issue with Emery’s statement that it

signed the agreement solely to facilitate the payment of retro-

active wages and pension increases. They argue that their

seniority with CFAF should have counted as seniority with

Emery, thus giving them precedence over some Emery

employees. Brief for McKinney Plainuffs at 9-10. They also

Summarily assert that Emery breached contract provisions

concerning vacation pay, use of part-time employees, reduc-

tions in benefits and other matters. Jd. at 29.

The McKinney plainuffs contend that they presented their

grievances to Local 85 and were rebuffed, id. at 10-11, and

that Emery “expressed [no] meaningful interest in resolving

this dispute through the contract grievance procedures.” Jd. at

27. Emery denies that the plaintffs have exhausted their con-

tractual remedies.

The McKinney plainuffs filed this lawsuit in July 1989,

seeking a declaratory judgment that the collective bargaining

agreement remains in effect, as well as damages for Emery’s

purported breach thereof.

IV.

[1] We begin the inquiry as to whether the arbitrator or the

court should decide the efficacy of the May 15 written agree-

ment by referring to case law of this court. Precepts laid down

instruct us to distinguish between a dispute over whether a

contract ever existed and a dispute over whether a contract

has expired or has been terminated or repudiated. In the for-

mer case. the issue is for the court; in the latter, the issue is

for the arbitrator if the breadth of the arbitration clause is not

20a

McKinney v. Emery AR FREIGHT Corp. 699

Workers, 915 F.2d 1333, 1340 (9th Cir. 1990), cert. denied,

_ US. _, 111 S. Ct 1684 (1991).

There can be no dispute about the breadth of the arbitration

Clause here. It is unquestionably broad, covering “[a]ny griev-

ance or controversy affecting the mutual relations of the

Employer and the Union.” Agreement of May 15, 1989, at cae

ER 15, Exhibit A, at 44. We have said that “[ajJn agreement

to arbitrate ‘any grievance or controversy affecting the mutual

relations of the [parties]’. . . or any other broad arbitration

Clause, such as ‘any dispute arising out of this Agreement,’

Ordinarily requires us to hold that the parties have provided

for arbitration of disputes regarding termination [of the

conmact]." Camping, 915 F.2d at 1338-39 (quoting

Brotherhood of Teamsters & Auto Truck Drivers Local No. 70

v. Interstate Distrib. Co., 832 F.2d 507, 510 n.2 (9th Cir.

1987)).

The question we must resolve is whether a labor agreement

ever existed between Local 85 and Emery to support the

in dispute. Camping Constr. Co. y. District Council of Iron

)

McKinney plaintiffs’ claims.

We express the precise inquiry for ultimate resolution with

care, because the parties’ unwillingness to recognize the

| requirement that the question of contract termination or repu-

diation be referred to arbitration ignores the limited perime-

| ters of our examination. The McKinney plaintiffs, for

| example, contend that the issue is controlled by John Wiley &

Sons. Inc. v. Livingston, 376 U.S. 543 (1964), but that case

| stands primarily for the proposition that “ ‘whether or not the

| company was bound to arbitrate, as well as what issues it

must arbitrate, is a matter to be determined by the Court on

the basis of the contract entered into by the parties.’ ” Jd. at

547 (quoting Atkinson v. Sinclair Refining Co., 370 U.S. 238.

241 (1962)). That is precisely the issue we are deciding here.

21a

700 McKinney v. EMERY AIR FREIGHT Corp.

For its part, Emery anchors its objection to arbitration on

the theory that this court recognizes a distinction between

agreements “abrogated by operation of federal labor law,”

which it says require a court's decision, and agreements ter-

minated or abrogated “by operation of the contract’s termina-

tion clause or general principles of contract law,” which are

for the arbitrator. First supp. letter brief for Emery at 3 (citing

Camping, 915 F.2d at 1338). We find no basis for this distinc-

tion in either Camping or Interstate Distributor.

Emery has lifted out of context a statement in Camping

directed to a footnote in /nterstate Distributor, 832 F.2d at

511 n.4, recognizing the courts’ authority to decide whether

an employer has repudiated a prehire agreement under Section

8(f) of the National Labor Relations Act. See Camping, 915

F.2d at 1338. In such cases, “(t]he employer's right to repudi-

ate is Created by, and set forth specially in, a federal statute

rather than . .. in the collective bargaining agreement itself or

in a body of common or other law applicable generally to

contract matters.” /nterstate Distrib., 832 F.2d at 511 n.4.

Emery’s attempt to expand this limited exception to encom-

pass the agreement here must fail for three reasons. First, no

statute confers on Emery an absolute right to repudiate the

May 15 agreement. Second, the agreement is a collective bar-

gaining agreement and not a Section 8(f) prehire agreement

Third, we recognized in Camping that the rule requiring the

court to decide the issue of repudiation in prehire agreements

was superseded by Deklewa v. International Ass'n of Bridge,

Structural & Ornamental Iron Workers, Local 3, 282

N.L.R.B. 1375 (1987), for all repudiations occurring after

February 20, 1987. Camping, 915 F.2d at 1337 n.2, 1338-39.

Thus, any post-Deklewa repudiations are subject to the

Interstate Distributor rule that “ “when the collective bargain-

ing agreement contains a customary arbitration clause[,] acts

of repudiation and other acts of termination must be submitted

to arbitration.” Camping, 915 F.2d at 1338 (quoting

Interstate Distrib.. 832 F.2d at 511 n.4).

22a

McKinney v. EMery Ar FREIGHT Corp. 701

Because Emery has introduced an inhibiting conception of

“federal labor law,” it may be well to delineate some funda-

mental precepts utilized in deciding labor disputes. The foun-

dation is grounded in statutes such as the National Labor

Relations Act and the Labor-Management Reporting and Dis-

closure Act, among others. The labor agreement is the method

of implementing our national labor policy, but it is not a run-

of-the-mill commercial contract. Professor Archibald Cox has

quoted Dean Shulman in this respect:

“(The collective-bargaining agreement] is not the

‘typical’ offer and acceptance which normally is the

basis for classroom or text discussions of contract

law. It is not an undertaking to produce a specific

result, indeed, it rarely speaks of an ultimate product.

It is not made by parties who seek each other out to

make a bargain from scratch and then go[ ) [their]

Own way. ... Though cast in an adversary position,

both are dependent upon their common enter-

prise.... They meet in their contract negowations to

fix the terms and conditions of their collaboration in

the future.”

Cox, Reflections Upon Labor Arbitration, 72 Harv. L. Rev.

1482, 1492 (1959) (quoting Address by Dean Schuiman. The

Role of Arbitration in the Collective Bargaining Process,

delivered at the Univ. of Cal.. Mar. 4, 1949, in Collective Bar-

8aining and Arbitration 19, 20-2] (Inst. of Ind. Relations,

Univ. of Cal. 1949)),

[2] “The resulting contact,” says Professor Cox, “is essen-

Wally an instrument of government, not merely an instrument

of exchange.” Jd. To interpret such an agreement and to deter-

mine whether a contact has been terminated or abrogated,

“(t]he governing criteria are not judge-made principles of the

common law but the practices, assumptions, understandings,

and aspirations of the going industrial concern.” Jd. at 1500.

The Supreme Court has described this as “the industrial com-

23a

702 McKiney v. Emery Ai Freicut Corp.

mon law.” In United Steelworkers of Am. v. Warrior & Gulf

Navigation Co., 363 U.S. 574, 581-82 (1960), the Court

stated: “The labor arbitrator’s source of law is not confined to

the express provisions of the contract, as the industrial com-

mon law—the practices of the industry and the shop—is

equally a part of the collective bargaining agreement although

not expressed in it” Commentators have emphasized that

“[uJnquestionably, custom and past practice constitute one of

(oe most significant factors in labor-management arbitration.”

F. Elkouri & E. Elkouri, How Arbitration Works 389 (3d ed.

1973); see also S. Block, Customs and Usages as Factors in

Arbitration Decisions 312-13 (1962), reprinted in R. Aldisert,

The Judicial Process 299 (1976).

All of these components—statutes, case decisions, princi-

ples of contract law, practices, assumptions, understandings,

the common law of the shop and “the industrial common

law”—are part of what is known as the federal labor law.

Moreover, it is the general understanding, indeed it is the key-

stone of the national labor policy announced in the

Steelworkers trilogy,’ that skilled labor arbitrators, rather than

Judges, are better positioned and equipped to identify and to

apply the common law of the shop.

We are satisfied that previous decisions of this court tell us

how to proceed here:

The court must determine whether a contract ever

existed; unless that issue is decided in favor of the

party seeking arbitration, there is no basis for sub-

mitting any question to an arbitrator. . . . [OJnce it

is found that a contract did exist at some time, the

questions of whether that contract has expired, or has

‘United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S.

593 (1960); United Steelworkers of Am. v. Warrior & Gulf Navigation

Co., 363 U.S. 574 (1960); United Steelworkers of Am. v. American Mfg.

Co., 363 U.S. 564 (1960).

24a

McKinney v. Emery Air Freicut Corp. 703

been terminated or repudiated, may well present

arbitrable issues, depending on the language of the

agreed-upon arbitration clause.

Camping, 915 F.2d at 1340; see Republic of Nicaragua v.

Standard Fruit Co., 937 F.2d 469, 478 (9th Cir. 1991). We

now apply these precepts to the facts in this case.

VI.

It is undisputed that Emery is the successor corporation to

both CFAF and the old Emery company; that at the beginning

of 1989, CFAF employees were working under a labor agree-

ment between Local 85 and CFAF that was due to expire on

March 31, 1989; that CFAF had extended a final offer. that

the companies were merged on April 6, 1989; that the

employees had ratified the CFAF offer by April 10, 1989; and

that Local 85 and Emery signed a labor agreement on May 15,

1989. We have Emery’s acknowledgement that it was a party

to the agreement: “When Local 85 accepted the company’s

offer by ratification of the membership, a collective bargain-

ing agreement was created between Emery and Local 85.”

Second supp. letter brief for Emery at 2; see Brief for Emery

at 15. We also have Schmoller’s statement that he signed the

May 15 agreement on behalf of Emery to confirm a retroac-

tive pay increase and to implement increased pension contri-

butions, a statement contradicted by the McKinney plaintiffs.

[3] From this we conclude that a labor contract between

Local 85 and Emery did exist at one time. See Presto Casting

Co. v. NLRB.. 708 F.2d 495, 498 (9th Cir.), cert. denied,

464 U.S. 994 (1983). What remains to be determined is

whether the contract existed only for the limited purposes

described by Schmoller, and whether the contract remained in

effect after the consolidation of the work forces.

We believe that this is a paradigm case to refer to the par-

ticular experuse of arbitrators, who will be able to sift through

25a

704 McKowney v. Emery Am Freicut Corp.

the facts and apply what the Supreme Court has described as

“the industrial common law.” Warrior & Gulf Navigation,

363 U.S. at 581-82.

Vil.

In the view we take of this case, we do not meet the sub-

Stantive issues raised on appeal by the partes. The judgment

of the district court is VACATED and the proceedings

REMANDED with a direction to refer to arbitration the ques-

tion whether Emery is bound by a labor agreement covering

the subject matter of the McKinney plaintiffs’ complaint.

26a

WILLIAM J. EMANUEL

JOHN F. GUEST

MORGAN, LEWIS & BOCKIUS

801 South Grand Avenue

Twenty-Second Floor

Los Angeles, California 90017-3189

(213) 612-2550

Attorney for Defendant

Emery Air Freight Corporation

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROD MCKINNEY; and )

CF AIR FREIGHT ) CASE NO. C 89 2649 CAL

EMPLOYEES, )

Plaintiffs, ) ORDER

VS. )

) DATE: August 21, 1992

EMERY AIR FREIGHT ) TIME: 9:30 a.m.

CORPORATION, d/b/a ) COURTROOM: 10, 19* Floor

EMERY WORLDWIDE, =?)

A CF COMPANY, )

Defendant. )

This matter came before the Court, the Honorable

Charles A. Legge presiding, on August 21, 1992 at 9:30 a.m.,

on plaintiffs’ motion to refer this case to arbitration and

defendant’s and intervenor’s cross-motion to refer the case to

the contractual grievance and arbitration procedure. The Court

is fully advised of the matter and has considered the mandate of

the Court of Appeals as well as all the pleadings, evidence and

27a

arguments submitted by the parties. In light of all the foregoing,

and for the reasons set forth in the record in open court on

August 21, 1992:

IT IS HEREBY ORDERED that plaintiffs’ motion is

denied and defendant’s and intervenor’s motion be and the same

is hereby granted; and the dispute as to whether the parties are

bound by the 1988-1991 collective bargaining agreement

between Teamsters Local 85 and CF Air Freight, Inc. is hereby

referred to the grievance procedure contained in Article 36 of

that agreement.

DATED: August 26, 1992

(s)

HONORABLE CHARLES A. LEGGE

UNITED STATES DISTRICT COURT

JUDGE

28a

Ronald Yank, No. 41200

Lisa Lee Pate, No. 0142083

CARROLL, BURDICK & McDONOUGH

Attorneys at Law

44 Montgomery Street, Suite 400

San Francisco, California 94104

Telephone: (415) 989-5900

Facsimile: (415) 989-0932

Attorneys for Defendant

Western Conference of Teamsters

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ROD MCKINNEY; and )

CF AIR FREIGHT ) No. C-94-1608-CAL (ARB)

EMPLOYEES, )

Plaintiffs, ) DEFENDANT WESTERN

VS. ) CONFERENCE OF

) TEAMSTERS’ AMENDED

EMERY AIR FREIGHT _) ANSWER TO PLAINTIFFS’

CORPORATION, d/b/a ) FIRST SET OF |

EMERY WORLDWIDE, _) INTERROGATORIES

ACF COMPANY; LOCAL )

85, INTERNATIONAL )

BROTHERHOOD OF )

TEAMSTERS, AFL-CIO; )

WESTERN CONFERENCE )

OF TEAMSTERS; and )

INTERNATIONAL )

BROTHERHOOD OF )

TEAMSTERS, AFL-CIO, _)

Defendants. _)

29a

PROUNDING PARTY: PLAINTIFFS

RESPONDING PARTY: DEFENDANT WESTERN

INTERROGARORY NO. 3:

State the date on which you first informed Local 85 of

the specific date of the hearing before the Joint Western Area

Committee in November 1993 in Case No. 11-93-4668,

pertaining to the 1988-1991 Agreement..

ANSWER TO INTERROGATORY NO. 3:

WCT objects to this Interrogatory to the extent it seeks

information unrelated to hearings or proceedings pertaining to

Plaintiffs’ grievance, on the grounds that such information is

neither relevant to the subject matter of this action nor

reasonably calculated to lead to the discovery of admissible

evidence. WCT further objects to this Interrogatory to the

extent that it seeks information which are subject to the

attorney-client privilege and/or the joint defense privilege and/or

are protected attorney-work product.

Without waiving these objections, WCT answers this

interrogatory as follows:

WCT did not inform Local 85 of a specific date of the

hearing before the Joint Western Area Committee in November

1993 in Case No. 11-93-4668. As will all other matters on the

30a

Joint Western Area Committee’s hearing agenda for the

November 1993 meeting, as well as other JWAC quarterly

meetings, the parties who involved in each hearing were notified

only that a particular hearing would occur during the 5-day

week of the quarterly JWAC meeting. Specific hearing times

depended on the availability of individuals involved in the

hearing and were not scheduled in advance.

INTERROGATORY NO. 4:

Give the name of each person who was present during

the Executive Session of the California Trucking Association

Committee of the Joint Western Area Committee in November

1993 in Case No. 11-93-4668.

ANSWER TO INTERROGATORY NO. 4:

The names of the persons who were present during the

Executive Session of the California Trucking Association

Committee of the Joint Western Area Committee in November

1993 in Case No. 11-93-4668 are as follows:

Archie Murrietta, Ben Ploshay, Ray Burkhart, Jim

Goodwin, and Gordon Kirby.

INTERROGATORY NO. 5:

Give the name of each person who voted on the

disposition of Case No. 11-93-4668 during the Executive

Session of the California Trucking Association Committee of

the Joint Western Area Committee.

—_

3la

ANSWER TO INTERROGATORY NO. 5:

The name of each person who voted on the disposition

of Case No. 11-93-4668 during the Executive Session of the

California Trucking Association Committee of the Joint Western

Area Committee in November 1993 are as follows:

Ben Ploshay, Ray Burkhart, Jim Goodwin, and Gordon

Kirby. While Archie Murrietta served as the Chairman at the

Session he did not vote on the disposition of Case No. 11-93-

4668. Only four individuals, two representing the employer,

Gordon Kirby and Ben Ploshay, and two representing the union,

Ray Burkhart and Jim Goodwin, voted on the disposition of

Case No. 11-93-4668

RRR

Dated: February 10, 1995

CARROLL, BURDICK & McDONOUGH

By (s)

Ronald Yank

Lisa Lee Pate

Attorneys for Defendants Western

Conference of Teamsters

32a

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROD McKINNEY; and )

CF AIR FREIGHT )

EMPLOYEES, )

Plaintiffs, ) Case No. C94-1608

vs. ) CAL (ARB)

)

EMERY AIR FREIGHT )

CORP., d/b/a EMERY )

WORLDWIDE, a CF )

COMPANY; LOCAL 85, __)

IBT, WESTERN )

CONFERENCE OF )

TEAMSTERS; and )

INTERNATIONAL )

BROTHERHOOD OF )

TEAMSTERS, AFL-CIO, _)

Defendants. )

)

DEPOSITION OF ROY J. RE

FRIDAY, AUGUST 11, 1995

VOLUME I

(Pages 1-135, inclusive)

C & H COURT REPORTERS

116 MERION TERRACE

MORAGA, CALIFORNIA 94556

ID. No. 68-0290999

(510) 376-6770 (800-254-9991)

FAX (510) 376-6771 PAGER.(800) 408-0754

33a

Page 93, line 18 - page 94, line 6:

Was Mr. Murrietta responding in a calm, quiet sort of

fashion? Die he seem to be agitated in any kind of way?

Archie does not get kind of agitated. He has a good

presence, good control. His response to the drivers

was, “You guys need to get yourself an attorney.”

You recall him saying that?

Yes. I thought it was a peculiar statement to make.

This was after he indicated to them that seniority would

be dovetailed and this is the normal way in which these

were handled?

Yes.

Page 95, line 4-14:

People were expressing their concern that if there was a

certain type of dovetailing, they can end up without

jobs?

Actually, the day of hire that was — of all the dovetail

procedures, that was the most damaging to the CF

people.

34a

It was during this conversaiton that at some point you

recall Mr. Murrietta indicating to the people “You may

want to get a lawyer,” or “You better get a lawyer ,” or

something to that extent?

He says, “You better get a lawyer.”

eke

Page 96, lines 3-7:

Not only that, but also the fact — I mean that was part

of it, but rather that endtailing was a proper subject of

collective bargaining. I made the proposal. Archie

Murmetta said he would not accept that at the bargaining

table.

Page 96, line 20 - page 97, line 5:

> © kD

I understand from what you said before, the language

provided that if CF acquired a company —

Right. The union, or nonunion, that their employees

would endtail to our employees.

The employees of the acquired --

That’s correct.

Would be endtailed to you?

That’s correct.

35a

How did this discussion take place with Mr. Murrieta?

Was it about your proposal?

Yes, it was.

Page 97, line 15 - page 98, line 6:

To the best of your recollection, what did Mr. Murrietta

say to you?

That I could not present that proposal.

Did he indicate why?

At first he said it was illegal, that it is illegal. That is

when we got into the subject of it being — it was a

proper subject of collective bargaining.

After that discussion of legality, did he say anything

further about why you couldn’t present that to the

company?

He called somebody at the Beeson office, so I’m told,

and he excused himself from the meeting and went to

call Duane Beeson’s office, and then came back and

said: “Yeah, you can put it on,” not too much more than

that at that point. He discussed it again later.

36a

Page 98, line 20 - Page 99, line 14:

He stated that he called Beeson’s office.

He indicated that you were right, you could lawfully

make such a proposal?

He was not pleased with it. We kind of got crossways

on that.

He didn’t at that point continue to say to you, “You

can’t make that proposal”?

No, he didn’t.

He backed off?

That’s correct.

Then you went into the meeting with management?

That’s right.

Did you actually present this proposal?

Yes, it had been reduced to writing.

Was there anything at that point said across the table

from the management people?

No. They would take it under submission along with the

rest of the proposals, with the counterproposals.

37a

Page 100, line 1 - 18:

We had not — excuse me — not a caucus. We went to

a break. We exited the room. I went to the men’s

room.

That’s usually where all the business gets done.

Yes.

(Remarks outside the record.)

After a number of hours we thought this might be

necessary. But Mr. Wayne Lashly came in, who is a member of

management and part of the company’s negotiating team. We

had a pretty good rapport over the years prior to the merger,

and he mentioned to Mr. Murrietta, had stated to him, there

would be no — no way these proposals would fly.

This was said after I had exited the room. He said this

unequivocally, he would not accept it. Even though it had been

introduced on the table, he would not allow it to go into play.

Page 107, line 2 - 17:

At that time I asked Mr. Hart, “Would you please

interrupt Mr. Murrietta,” who was controlling the

meeting, “and ask him what the status is of the CF

agreement? Is there really a necessity of negotiating an

agreement with Emery because of the language that they

had in their contract?” Vaguely, basically he said that if

another agreement was in place, that the better

38a

conditions would take place and so on and so forth, and

if we were the company that did the acquiring here, why

don’t we assume the contract that has just been

negotiated and ratified by the CF drivers.

At that time the response — Mr. Terry Hart interrupted

the meeting, and at that time Mr. Murrietta’s response

to him was, “That contract is dead.”

Page 112, line 3 - page 113, line 6:

> DH > © > 0

Were there ever any other discussions that you had or at

any time present heard Mr. Murrietta way anything on

this issue about whether the CR Air-Local 85 agreement

survived?

Mr. Murrietta emphatically stated on several occasions

that he was questioned about the survivability of that

particular agreement and stated that it did not, from day

one.

Okay. You say on several occasions?

Several occasions.

What other occasions?

Any other time.

When were they?

Negotiating sessions, any time a question would come

39a

up with regard — “What about this particular condition

with the CF agreement?” “No, it does not exist.”

Now, did Mr. Murrietta ever indicate the basis of his --

Never. You don’t have to finish that question. He

never once gave me a basis or a reason for stating it.

Let me finish the question so we have it on the record.

Go ahead.

Did Mr. Murrietta ever indicate the basis for his saying

that the contract of CF Air Freight did not survive?

No.

Page 113, line 15 - 25:

> OH F- A

Did you ever pose the question for Terry Hart?

Terry Hart was basically following in what — whatever

statements Archie Murrietta made.

Did you ever ask Mr. Hart --

He didn’t know.

— whether it survived?

He didn’t know why it didn’t survived, but he didn’t

want to get into an argument or discussion with

40a

Murrietta regarding the survivability of the contract.

4la

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROD McKINNEY; and )

CF AIR FREIGHT )

EMPLOYEES, )

Plaintiffs, ) Case No. C94-1608

VS. ) CAL (ARB)

)

EMERY AIR FREIGHT )

CORP., d/b/a EMERY )

WORLDWIDE, a CF )

COMPANY; LOCAL 85, +)

IBT, WESTERN )

CONFERENCE OF )

TEAMSTERS; and )

INTERNATIONAL )

BROTHERHOOD OF )

TEAMSTERS, AFL-CIO, )

Defendants. )

)

DEPOSITION OF THOMAS J. LaGRAVE

TUESDAY, JULY 11, 1995

C & H COURT REPORTERS

116 MERION TERRACE

MORAGA, CALIFORNIA 94556

LD. No. 68-0290999

(510) 376-6770 (800-254-9991)

FAX (510) 376-6771 PAGER (800) 408-0754

42a

Page 18, line 20 - page 19, line 4

What do you recall, as close as you can, and I realize

you are going to have difficulty remembering his exact

words perhaps, but as close as you can recall, what did

Mr. Murrietta say during the course of the time that he

was there? P

Mr. Murrietta’s statement was: “The merger is in the

process of going through. We will go according to

deniority, and if you’re not happy with this or happy

with my dealings, I suggest that you get yourself a good

lawyer.”

Page 87, line 20 - page 88, line 4:

> ODO +> LD >

After you had your conversation with Mr. McKinney,

where you were going to try and get more information

about it, what did you do? |

I went to Pete Rodriguez.

Who is Pete Rodriguez?

He was — at that time was the business agent for 856.

Why did you go to Mr. Rodriguez?

Because I knew that he attends the WAC meetings.

43a

Page 88, line 11 - 19:

Q How long before contacting Mr. Rodriguez had you

heard this rumor that you hearing was --

A Into the end of that week, like Friday. That’s why I

went to his house on Saturday.

Q You hadn’t heard about it until Friday?

A Well, I knew JWAC was being held. Everybody knows

that. That’s the common law of the Teamsters, when

they are being held. But as far as who is on the cases

we have — I have no idea.

Page 93, line 3 - page 95, line 11:

Q When did you speak with Mr. Rodriguez?

A I spoke to him on a Saturday. Saturday afternoon,

about noontime.

Q What did you ask him to do or ask him?

A I went to his home, and I said, “Are you going to the

hearings in San Diego?”

And he says, “Yeah,” 856, he’s a business agent —

steward, excuse me. A business agent, excuse me.

d4a

———

I says, “Do you have an agenda?”

He says, “Yeah, they give us an agenda before we

leave.”

Did you look to see if there was anything for CF?

Yeah. All three. There was nothing for CF Air or Rod

McKinney.

Did you personally look through the agenda?

No. Personally, that’s like me trying to look through

your stuff, so I took him at his word. I mean he’s

reading out of the book.

So then we continued on and had a coke, you know, and

just chitchat. He said, “I’m leaving Sunday morning,” or

“Sunday at noon.” They have a — what they call a

write-in a lot of times for hearings. He says, “I’ll get

down and when we get this add-on,” or write-in,

whatever they call it, “if you’re on there I’ll phone you,”

and he say, “You can come down.”

You know, so he called me and in the meantime I called

Roy Re, and I said, “Pete’s going to call me. If there is

going to be hearing, do you want to go?

He said, “Definitely. We'll jump on a plane and go.”

45a

So he called me Sunday evening, and said, “There is no

write-on,” or “Write-in.” He says, “You are not on it.”

I says “Okay. Thanks for it,” you know, and that was it.

I came home Monday evening from the hearing and on

my machine there was --

From the hearing?

From work, rather. Excuse me. I cam home Monday

evening from work, and on my machine was a message.

All it said was, “Tom, you lost. They had the hearing

this morning at 9:00.”

Who was the message from?

Pete Rodriguez. I says — now, I’m sitting here at 8:00

at night, and I go, “Well, I guess that takes care of that, :

because I don’t know the ins and outs again.

So in the meantime I contacted Roy Re and said, “Pete

called and said we lost.” I said, “They had the hearing

and we weren’t there,” but the company was there, and

Terry Hart represented us.

11:25 A.M. November 8, 1993 11-93-4668

LOCAL 85

and

EMERY WORLDWIDE

CALIFORNIA TRUCKING ASSOCIATION COMMITTEE

ARCHIE MURRIETTA, CHAIRMAN

BEN PLOSHAY, CO-CHAIRMAN

UNION PANEL: EMPLOYER PANEL:

RAY BURKHART GORDON KIRBY

JIM GOODWIN BEN PLOSHAY

APPEARING FOR THE UNION: TERRY HART

APPEARING FOR THE COMPANY: JAMES LA SCALA

Page 27, lines 1-12

THE CHAIRMAN: Next case is 11-93-4668, Local 85 and

Emery Worldwide.

The Union Panel wil! be Burkhart and

Goodwin

MR. PLOSHAY: The Employer Panel will be Kirby and

Ploshay.

THE CHAIRMAN: Appearing for the local union?

MR. HART: Terry Hart.

47a

THE CHAIRMAN:

MR. LA SCALA:

THE CHAIRMAN:

Appearing for the company?

James La Scala.

Local, you are the moving party, go

ahead.

Page 39, line 14 - page 40, line 4

THE CHAIRMAN:

TEE CHAIRMAN:

TEE REPORTER:

Questions by the panel?

(No response)

Hearing none, executive session. Parties

be excused.

(Executive session)

We have a decision.

“T move, Mr. Chairman, that the Local

85 contract did not follow the former CF

Air Freight employees to the Emery

terminals when they were integrated into

the Emery work force, that it did not

continue to control their working

conditions at the Emery terminals, and

that it had no continuing effect after the

work force consolidation.

“The motion was seconded and carried.

48a

“The fee of $200 to the union.”

49a

BEESON, TAYER & BODINE

Attorneys at Law

A Professional Corporation

235 Pine Street, Suite 1200

San Francisco, California 94101-2701

(415) 986-4060

FAX (415) 986-8149

December 8, 1992

Christopher W. Katzenbach, Esq.

Mills Building - Penthouse One

200 Montgomery Street

San Francisco, California 94104

RE: Rod McKinney et al. v. Emery

Air Freigl 1 Local 85

Dear Mr. Katzenbach:

I have asked Teamsters Local 85 to defer submitting the

dispute between the parties to the grievance panel until you let

us know whether the Plaintiffs wish to file a new grievance. In

order to move this case along I think we should have it

scheduled for the first meeting of the Panel after the New year.

I personally have no preference inthis matter but you will recall

in a recent telephone conversation that I told you the Union

would have no objection if you would like to update the issue by

filing a new grievance that would conform generlaly with the

decision of the Ninth Circuit Court of Appeals.

Please let me hear from you so that the case can be

placed on the Agenda for the next meeting of the Panel.

ag truly yours,

Duane B. Beeson

DBB: kmh

cc: John Guest

50a

LAW OFFICES OF

CHRISTOPHER WOLCOTT KATZENBACH

MILLS BUILDING - PENTHOUSE ONE

220 MONTGOMERY STREET

SAN FRANCISCO, CALIFORNIA 94101

TELEPHONE (415) 391-6464

FAX (415) 391-2696

December 18, 1992

Duane B. Beeson, Esq.

Beeson, Tayer & Bodine

235 Pine Street, Ste. 1200

San Francisco, CA 94101-2701

Re: McKinney v. Emery Air Freight

Dear Mr. Beeson:

I am responding to your letter of December 8, 1992.

When we last spoke about this case, you were poing to

contact the union to determine what its position was on this case

and advise me accordingly. I have not heard back from you as

to the union’s position.

Before attempting to redraft the grievances, if necessary,

I would like to know the union’s position. That way, I can

redraft the grievances to accommodate what the union feels are

the issues and appropriate remedies, should that appear in my

clients’ best interests.

I do not think that the grievance need conform

specifically to the matters discussed by the Ninth Circuit, since

the panel can take those matters into account in any event based

on the Court’s written decision.

LAW OFFICES OF

CHRISTOPHER WOLCOTT KATZENBACH

MILLS BUILDING - PENTHOUSE ONE

220 MONTGOMERY STREET

SAN FRANCISCO, CALIFORNIA 94101

TELEPHONE (415) 391-6464

FAX (415) 391-2696

May 5, 1993

Duane B. Beeson, Esq.

Beeson, Tayer & Bodine

235 Pine Street, Ste. 1200

San Francisco, CA 94101-2701

Re: McKinney v, Emery Air Freight

Dear Mr. Beeson:

I have not heard from you or the Union with respect to

the Union’s position in this dispute. As I have explained, the

lack of response from the Union makes it difficult to determine

which issues my clients should be pursuing and which issues are

in dispute in this matter.

Nevertheless, let me briefly state some of the issues

which I believe are to be resolved by arbitration.

First, was the 1988-1991 contract signed only for the

purpose of confirming a retroactive pay increase or did it remain

in effect after the consolidation of Emery and CF? Since the

Union negotiated this agreement, the Union’s position on this

factual issue is critical to the proceedings before any of the

Teamster Joint Boards. Obviously, we need to know if the

52a

Union intends to support the Company’s “limited purpose”

argument or not.

Second, if the 1988-1991 contract was net “ied to the

retroactive pay issue asserted by the company, it is apparent to

us that the company violated the contract in at least the

following ways:

a. The bidding for terminals was not posted and

not by seniority (Art. 34, secs. 2, 8 and 9: see

Art. 6, sec. 2)

b. The CF work was transferred to new terminals

and given, in whole or part, to Emery

employees. This violated the work preservation

provisions of the agreement (Art. 2, secs. 1 and

2; Art. 27, secs. 1 and 2; Art. 38, sec. 1)

C. The CF employees were subjected to inferior

working conditions under the Emery contract

than those contained in the 1988-1991 contract.

d. Loss of seniority rights for the CF drivers.

Third, should the panel find that the 1988-1991 contract

was violated, the precise scope of remedy should include, at a

minimum, restoration of all benefits lost, compensation for

additional expenses in commuting to new terminals, and back

pay lost because the former CF work was transferred to the old

Emery employees. I think, in particular, that it is important to

recognize that the transfer of work issue is independent of the

seniority issue. The 1988-1991 contract protects the CF

drivers’ work from being transferred to other employees,

regardless of the other employees’ seniority in the merged

53a

company. So long as work can be traced as CF work, it belongs

to the CF drivers and no one else.

I would expect, however, that the remedy issues would

be resolved separately from the general issue of liability. In

other words, the panel would first decide liability and then, in a

later proceeding if liability is found, decide the specific damages

whic are owed.

Fourth, as to the seniority issues, there are two matters

to resolve. (1) Since old Emery was benkrupt, we believe that

the standard rule under Teamster contracts is to entail the

Emery employees; that rule should be applied here also. (2)

Since CF was the surviving corporation, it is seniority with CF

that counts for purposes of seniority rights in the new company;

the Emery employees are, in effect, new hires into CF. In our

view, giving the old Emery employees a seniority date based on

service with Emery is, in effect, giving them super-seniority over

the CF employees’ and using seniority as a subterfuge to give

the CF employees’ work to the old Emery employees. I doubt

very much that the Union would have allowed this if the old

Emery employees had been non-union.

Very truly yours,

(s)

Christopher W. Katzenbach

54a

BEESON, TAYER & BODINE

Attorneys at Law

A Professional Corporation

235 Pine Street, Suite 1200

San Francisco, California 94101-2701

(415) 986-4060

FAX (415) 986-8149

July 28, 1993

Christopher W. Katzenbach, Esq.

Katzenbach & Khtikian

1714 Stockton Street, Ste. 300

San Francisco, California 94133-2930

RE: McK Beery Adc Freie

Dear Mr. Katzenbach:

I am informed that Teamsters Local 85 has requested the

above case to be scheduled for the Joint Western Area

Committee’s (WAC) meeting in August, 1993. The purpose

of the hearing will be to take evidence and resolve the question

identified by the Ninth Circuit’s decision as appropriate for

handling under thearbitration provisions of the collective

argaining agreement. As you are aware, Judge Legge upon

remand of the case by the Ninth Circuit has ruled that the Ninth

Circuit’s order contemplates submission of the case pursuant to

the pre-arbitration step of the grievance procedure.

In view of the history of the positions taken by the

parties at various stages of this proceeding, Local 85 does not

believe it appropriate to be the spokesperson at JWAC for Mr.

McKinney and the group he represents. A representative of

55a

Local 85 will attend the hearing and will take appropriate steps

to ensure that Mr. McKinney and/or other members he

represents will have a full opportunity to present their case. It

is my understanding that under the rules of JWAC attorneys are

not permitted to appear at hearings to represent parties to the

case. A Teamster member who is involved in the proceedings

may represent himself, or have representation through another

Teamster member.

Scheduling of this case is being handled by Archie

Murrietta of the Western Conference of Teamsters. Mr.

Murrietta’s address 1616 West Ninth Street, Los Angeles, Calif.

and his telephone number is (213) 365-4780. He should be able

to furnish you with additional details concerning the time and

place of the hearing. Although I assume you will be in

communication with Mr. McKinney, I believe Terry Hart of

Local 85 will also communicate with him about the hearing.

Very truly yours,

(s)

Duane B. Beeson

DBB: kmh

ee: Archie Murrietta/WCT

Terry Hart/Local 85

56a

BEESON, TAYER & BODINE

Attorneys at Law

A Professional Corporation

235 Pine Street, Suite 1200

San Francisco, California 94101-2701

(415) 986-4060

FAX (415) 986-8149

November 2, 1993

FAX/MAIL

Christopher W. Katzenbach, Esq.

Katzenbach & Khtikian

1714 Stockton Street, Ste. 300

San Francisco, California 94133-2930

RE: Mck; Emery Air Freie!

Dear Mr. Katzenbach:

I have learned that the above case is scheduled for the

November meeting of the Joint Western Area Committee

(JWAC). My letter of July 28, 1993, copy of which I am

enclosing for your convenience, states the position of Local 85

in respect to the handling of his matter.

I am not sure that Local 85 has been ablve to

communicate with all of the Plaintiffs represented by you in the

Court case, any by this letter I am requesting that you

communicate with one or more of them so that the

representation of your clients will be effectively presented. al

57a ro

Scheduling of this case is handled by Archie Murrietta of

the Western Conference of Teamsters, whose address is 1616

West 9 Street, Los Angeles, Calif. (Tel: (213) 365-4780). Mr.

Murrietta should be able to answer any questions you have

about procedures.

Very truly yours,

(s)

Duane B. Beeson

DBB: kmh

cc Terry Hart

Archie Murrietta

Enc.

58a

1/11/89 AGREEMENT BETWEEN

CF AIR FREIGHT, INC.

AND

TEAMSTER LOCAL 85

Apni 1, 1988 through March 31, 1991]

THIS AGREEMENT is made and entered into this 1"

day of April, 1988, by and between CF AIRFREIGHT , INC.

Hereinafter referred to as the “Company” or the “Employer,”

and BROTHERHOOD OF TEAMSTERS AND AUTO

TRUCK DRIVERS LOCAL 85, hereinafter referred to as the

“Union.,” and constitutes the sole agreement between the

parties.

ARTICLE I.

SCOPE

Section 3. Transfer of Company Title or Interest

The Employer’s obligations under this Agreement shall

be binding upon its successors, administrators, executors and

assigns. The Employer agrees that the obligations of this

Agreement shall be included in the agreement of sale, transfer or

assignment of the business. In the event an entire operation, or

a portion thereof, or rights only, are sold, leased, transferred or

taken over by sale, transfer, lease, assignment, receivership, or

bankruptcy proceedings, such operation or use of rights shall

continue to be subject to the terms and conditions of this

Agreement for the life thereof. Transactions covered by this

59a

provision include stock sales or exchanges, mergers,

consolidations, spin-offs or any other method by which a

business is transferred.

It is understood by this section that the Employer shall

not sell, lease or transfer such run or runs or rights to a third

party to evade this agreement. In the event the Employer fails

to require the purchaser, transferee, or lessee to assume the

obligations of this Agreement, the Employer shall be liable to

the Local Union and to the employees covered for all damages

sustained as a result of such failure to require the assumption of

the terms of this Agreement until its expiration date, but shall

not be liable after the purchaser, the transferee or lessee has

agreed to assume the obligations of this Agreement. The

obligations set forth above shall not apoply in the event of the

sale, lease or transfer of a portion of the rights comprising less

than all of the Employer’s rights to another company unless the

purpose is to evade this agreement. Corporate reorganizations

by the Employer, occurring during the term of this Agreement,

shall not relieve the Employer or the reorganized employer of

the obligations of this Agreement during its term.

The Employer shall give notice of the existence of this

Agreement to any purchaser, transferee, lessee, assignee, or

other entity involved in the sale, merger, consolidation,

acquisition, transfer, spin-off, lease or other transaction by

which the operation covered by this Agreement or any part

thereof, including rights only, may be transferred. Such notice

shall be in writing with a copy to the Local Union, at the time

the seller, transferror, or lessor makes the purchase and sale

negotiation known to the public or executes a contract or

transaction as herein described, whichever first occurs. The

Local Union shall also be advised of the exact nature of the

transaction, not including financial details.

60a

The term rights shall include routes and runs.

Teamster Local 85 CF Air Freight, Inc.

By: (s) By: (s)_

Date: Date:_5/15/89

Ratified April 10, 1989

6la

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.