Opinion ID: 353799
Heading Depth: 1
Heading Rank: 3

Heading: a factual issue exists which precludes summary judgment

Text: 31 In Part II of this opinion we held that the district court has jurisdiction to decide if the November agreement is invalid because of the failure to obtain ratification. The factual basis for the lack of ratification is also the fundament of the unfair representation charge against the Union. We therefore analyze the representation claim with an eye to the factual controversy underlying the claim that the November agreement was not validly executed. 32 Plaintiffs assert that the employer and the Union have conspired to unfairly represent employee interests by entering into the November agreement. This claim rests on the following allegations which are supported by the affidavits filed under Rule 56(e): (1) The notice posted on November 1, 1972, was false and misleading because it stated that the Eastbound Repair Shop would be closed, when in fact it was reopened with more activity and more employees than previously. (2) Other employees with identical skills to those of plaintiffs took plaintiffs' jobs and are discharging the same duties for the Railroad. (3) The plaintiffs were not consulted as to the formation of the November agreement and were never asked to ratify it. (4) The Union violated its constitution which required ratification. (5) All of the defendants knew that similar agreements were submitted to the local membership in 1968 and again in 1969 and were rejected by them. (6) On other occasions, proposed contracts such as the November agreement were always submitted to the local membership for ratification. (7) After the contract was signed, the Union refused to consider the plaintiffs' request to invalidate the agreement. (8) Defendants refused to advise plaintiffs which sections of the collective bargaining contracts authorized the November agreement. (9) The Railroad knew of the Union's violation of its constitution, but did nothing to prevent Union unfair representation. (10) As a result of unfair representation by the Union and the complicity of the employer, plaintiffs now work at a new location with less desirable working conditions and diminished seniority rights. 33 The district court granted summary judgment in favor of both defendants on this issue, holding: that the plaintiffs' failure to exhaust internal union remedies precluded the court from reaching the unfair representation claim; that the Railroad could justifiably rely on the duly designated representatives of the employees to make the November agreement binding and that the Union was authorized under the basic collective bargaining agreement in force to bind the employees. The district court also held that there was no material issue of fact as to the charge of unfair representation and that even if such a claim could be pursued against the Union, no cause of action would exist against the 34 employer. A. The Plaintiffs Have Sufficiently Exhausted Their Internal Union Remedies 35 The primary basis for the district court's grant of summary judgment on the unfair representation charge is that the plaintiffs did not exhaust their internal union remedies. Exhaustion of internal union remedies is a necessary requirement to a complaint against a union for breach of the duty of fair representation. Mills v. Long Island R.R. Co., 515 F.2d 181 (2d Cir. 1975); Gainey v. Brotherhood of Ry. & Steamship Clerks, 275 F.2d 342 (3d Cir. 1960). 36 Plaintiffs' claim for unfair representation is based primarily on charges against the Union both for its initial failure to obtain ratification and its subsequent failure to reconsider and remedy the situation. The district court held that the plaintiffs' failure to utilize the Union's internal appeals procedure 17 precluded it from hearing the claim. Plaintiffs concede that they did not formally comply with the appeals procedure provided by the Union's Constitution. Summary judgment, however, may not be granted on the ground of failure to exhaust remedies in the instant case, for sufficient facts have been set forth to prove either that plaintiffs have already done all that is possible within the Union appeal procedures or that they may be excused from pursuing Union remedies to exhaustion. 37 Plaintiffs claim that they have done all that is possible to protest the Union's action, although they did not undertake formal compliance with the appeals procedure. Jones v. Trans World Airlines, Inc., 495 F.2d 790, 796 (2d Cir. 1974), holds that exhaustion of internal union remedies may be excused when such attempts would be futile. The plaintiffs repeatedly sought redress for harms caused by the Union. They met with officials of the International and the Local, asking the officials to rescind the November agreement. These attempts at relief were rebuffed in each instance. Under these circumstances, requiring plaintiffs to undertake a time-consuming formal appeal would serve no purpose. See Glover v. St. Louis-San Francisco Ry. Co., supra, 393 U.S. at 324, 89 S.Ct. 548. The exhaustion requirement is based on a policy of forcing employees to seek initial relief internally from their union without seeking external help from the courts. When, as here, the Union discloses that its position has become fixed, complaining union members are relieved from the frustrations of futile appeals. Under these conditions, the policy favoring exhaustion is not undermined when the district court takes jurisdiction. We therefore conclude that union members are not foreclosed from judicial relief when the local and international officers notify the members that they are unwilling or unable to offer any relief. See Brennan v. Local Union 122, 564 F.2d 657 (3d Cir. 1977) (no need to attempt to change union by-laws as a remedy even though provided in agreement); Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870 (3d Cir. 1972) (Rosenn, J.) (no need to exhaust when the union has given grievance perfunctory consideration). In the instant case, there are sufficient factual disputes raised by the plaintiffs' complaint and Rule 56(e) affidavits to excuse them from the needless task of exhausting union remedies. 38 Therefore, summary judgment may not be entered for the 39 defendants. B. There Is Sufficient Factual Basis 40 to Make Out an Unfair Representation Claim 41 The essence of plaintiffs' unfair representation claim is that the defendants' November agreement was invalid and that defendants, with knowledge of its invalidity, sought to enforce its provisions. The district court held that the Union had authority to negotiate the contract and that the employer could rely on the Union's authority. Because of this, the district court believed that there was no basis for a charge of unfair representation. The court indicated that the facts alleged in the complaint and supporting affidavits were insufficient to state a cause of action for unfair representation. We first assess the court's treatment of the facial validity of the November agreement, as this is the crux of the unfair representation claim. We then assess its evaluation of whether the complaint and the supporting affidavits state a cause of action for unfair representation. Preliminary to this, however, we must first address that part of the district court's opinion which holds that the employer may not be implicated in an unfair representation suit. 42 The district court held that even if a cause of action could be established for breach of the duty of fair representation, no such cause could lie against the employer. We are constrained to disagree. While it is true that the claim is directed primarily against the Union, the employer is also charged with entering into the agreement with knowledge of the Union's lack of authority. This may constitute a sufficient basis to join the employer in an unfair representation claim. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976) (employer implicated in dismissal of employees based on false allegations); Glover v. St. Louis-San Francisco Ry. Co., supra (case involving charges that the union unfairly represented its black members, employer retained as a defendant). 43 (I)n a suit against a union for hostile discrimination the employer can be joined as a party defendant if it acted from a motive to discriminate or with knowledge that the (union) was discriminating. (Ferro v. Railway Express Agency, Inc., 296 F.2d 847, 851 (2d Cir. 1961)). Where the employer's action is only a consequence of the union's discriminatory conduct, e. g., Cunningham v. Erie Railroad Co., 266 F.2d 411 (2d Cir. 1959), or takes the form of joint discrimination with the union, then plaintiffs should be allowed to join the employer and union in one action. Glover v. St. Louis-San Francisco Ry. Co., 393 U.S. 324, 89 S.Ct. 548, 21 L.Ed.2d 519 (U. S. Jan. 14, 1969). 44 O'Mara v. Erie Lackawanna R.R. Co., 407 F.2d 674, 679 (2d Cir. 1969), aff'd sub nom., Czosek v. O'Mara, 397 U.S. 25, 90 S.Ct. 770, 25 L.Ed.2d 21 (1970). 45 Plaintiffs' complaint and supporting affidavits are replete with allegations and statements of facts which link the employer's action inextricably with that of the Union. The employer is charged by plaintiffs with knowledge of the ratification requirement which is the basis for the unfair representation claim. Although the employer denies this, sufficient factual dispute exists to render impermissible a summary judgment for the Railroad in the unfair representation claim. 46 It is a basic principle of labor law that the employer is required to deal and enter into contracts with the duly designated bargaining representatives of its employees. Virginia Ry. Co. v. System Federation No. 40, 300 U.S. 515, 57 S.Ct. 592, 81 L.Ed. 789 (1937). The duly designated representative of railroad employees has statutory authority under the Railway Labor Act to make agreements binding upon them with respect to wages, rules, and other working conditions. Elgin, Joliet & Eastern R.R. Co. v. Burley,325 U.S. 711, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945). In Kline v. Florida Airlines, Inc., 496 F.2d 919 (5th Cir. 1974), the unilateral failure of a union to follow its own rules was an insufficient basis to invalidate the agreements entered into by the union with the employer. 47 But, an employer has no right to rely on the appearance of authority of the bargaining agent if it has knowledge to the contrary. This is an elementary principle of the law of agency. See O'Mara v. Erie Lackawanna R.R. Co., supra, 407 F.2d at 679. The plaintiffs' allegations and supporting affidavits are laden with facts indicating that the Railroad had notice as to the requirement for ratification of agreements such as that contested here, but without objection actively participated in the execution of the November agreement. We conclude that a substantial factual question exists here as to whether the agreement itself is invalid for failure to obtain ratification. 48 The district court asserts that Rule 3-b-2 of the Basic Collective Bargaining Agreement of 1970 gave authority to the Union to negotiate the November agreement, consequently validating the Union's and employer's action. Rule 3-b-2 provides that: 49 No changes or modifications shall be made in existing seniority districts of a craft or class, nor shall any roster be combined or divided unless otherwise agreed to, in writing, between the Director-Labor Relations (for the Railroad) and the Director of Railroad Division (for the Union). 50 This clause does no more than establish the procedure for undertaking a change in seniority rights. It is subject, as are all other authorizations of power to an agent, to the limitations placed on the power by the principal. A factual question exists here as to whether the plaintiffs' bargaining agent is empowered to bind the employees in the absence of ratification. Therefore, Rule 3-b-2 is subject to whatever agency limitations are found in the arrangement between the employees and the union officials and cannot be a bar to the cause of action for unfair representation. Because plaintiffs have supplied affidavits in support of their allegations that the employer was on notice as to these limitations, the employer may not rely on the apparent authority of the bargaining agent. 51 Facts are alleged which if proved would allow the plaintiffs to establish that the Union had no authority to enter into the November agreement and that the employer was aware of this contractual disability. The question we must answer is whether proof of these facts is sufficient to establish a cause of action against both defendants for unfair representation. 52 The district court characterized plaintiffs' charge of unfair representation as insufficient in raising issues of hostility or partiality on the part of the union officers. Goglowski v. Penn Central Transp. Co., supra, 423 F.Supp. at 906. It held that the plaintiffs alleged nothing more than a disagreement with the interpretation placed upon its Constitution by the Union officers which cannot rise to the dignity of unfair representation. Id. at 905. We disagree. We believe that plaintiffs' complaint and affidavits create an issue of fact sufficient to withstand summary judgment. 53 The statutory duty of fair representation was developed in a series of cases involving alleged racial discrimination by unions certified as exclusive bargaining representatives under the Railway Labor Act. See Tunstall v. Brotherhood Loc. Firemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187 (1944); Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944). It is now clear that unfair representation claims may be brought for any hostile discriminatory union representation, even those not racially based. See Hines v. Anchor Motor Freight, Inc., supra. A breach of the statutory duty of fair representation occurs . . . when a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith. Vaca v. Sipes, 386 U.S. 171, 190, 87 S.Ct. 903, 916, 17 L.Ed.2d 842 (1967). 54 Plaintiffs have set forth far more than a mere disagreement with Union officials over the meaning of the Union's constitution. An affidavit was filed for plaintiffs by John Horon, a member and officer of the defendant Local Union and representative to the International Union from 1955 through 1973, who participated in contract negotiations for eighteen years. He averred that every agreement between the Local and the Railroad and every agreement between the International and the Railroad between 1955 and 1973 was submitted to the local membership for approval. He further averred that agreements similar to the November agreement had been submitted and rejected by the employees in 1968 and 1969. Defendants filed an affidavit by Joseph Hanaberry, an officer of the International Union, who stated his belief that the Union Constitution did not require ratification. This, however, does nothing more than to establish a contested question of fact for the court. 55 The district court held that this prior history of negotiations did not create an issue of fact as to whether the November agreement was a product of unfair representation. We disagree. The existence of prior negotiations points to the unusual nature of the November agreement. When coupled with the contested allegations concerning substitutions of other employees to replace plaintiffs at the same job and the Union's refusal to reassess the November agreement, an inference may be raised as to the Union's intentions. Thus, substantial questions of fact exist which require trial. 18