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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1997
- **Citation:** 522 U.S. 864

## Text

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,

V.

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

ii
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

iV

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

Vv

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

vi

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

l

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.

2

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

3

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...)

4

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

5

"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

6

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.

7

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

8

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

9

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

10

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. ..)

11

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).

3

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.

12

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

13

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,

14

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).

15

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

16

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.

17

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

18

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

19

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

20

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.

21

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...)

22

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

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

la

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.

I.

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

2a

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

3a

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.

4a

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

Sa

estoppel or equitable tolling.
V.

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

6a

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.

Ta

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

8a

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.

9a

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

a
.
i
aw

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.

y

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.

I.

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.

V.

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:

Q

A

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:

Q

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:

A

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:

Q

A

> © 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

Q

A

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:

Q

A

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:

A

Q

7 * © © 6 2» @- S44

>

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:

A

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:

A

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:

Q

> 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

Q

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:

Q

> 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

wr
°

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

aK

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.

xR

Teamster Local 85 CF Air Freight, Inc.
By: (s) By: (s)_
Date: Date:_5/15/89

Ratified April 10, 1989

6la

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_1095%3A1. Public record. Not legal advice.