Court Opinion

ID: 8981627
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:30:34.213217+00
Date Added: 2024-06-11T17:10:42.354029
License: Public Domain

DAVID A. NELSON, Circuit Judge,
dissenting.
I do not believe that the evidence presented at trial was sufficient to support a finding that the union violated its duty of fair representation in negotiating the 1986 collective bargaining agreement. Without reaching any of the other issues raised on appeal, therefore, I would reverse the judgment entered by the district court and direct the entry of judgment in favor of the union.
I
It is undisputed that when the Traverse City agreement was negotiated in 1980, there was full employment at both of Super Foods’ warehouse facilities in Vassar and Saginaw; there were no major layoffs at either facility. The company’s chief negotiator testified, moreover, that “we visualized that when we combined [the operations] ... most people would still be working and therefore it was proper to dovetail their seniority.” That, presumably, is why the Traverse City agreement began with a reference to “the work [being] transferred to Bridgeport,” and concluded with a sentence saying that “[i]f there is a complete closing [of the Saginaw facility] resulting from a complete transfer of Saginaw warehouse work to the Bridgeport facility, there will be a combined dovetailing.” (Emphasis supplied.)
Four years later a very different situation existed. Although the Vassar operations had apparently been transferred to Bridgeport in their entirety, and although the Saginaw facility was still in operation, some of the operations conducted at Saginaw had been terminated altogether instead of being transferred to Bridgeport. One segment of the business was abandoned, and the jobs associated with the discontinued operations were simply abolished.
Faced with this new and disturbing situation, Mr. Hillard, the Local 337 business representative who had agreed to have the Traverse City agreement incorporated in the local’s 1983 collective bargaining agreement and who was responsible for administering the agreement, sought guidance from his international union. Mr. Hillard wanted to know how the agreement should be applied if the condition on which a complete dovetailing depended — “a complete transfer of Saginaw warehouse work to the Bridgeport facility” — could no longer be fulfilled. One possibility, as Mr. Hillard testified, would be to follow the practice that was common elsewhere in the freight and warehousing industry:
“If you have a job, [and] your job goes someplace else, you follow the work. You have a right to follow the work.
If you don’t have a job you don’t have a right to go over and take anybody’s job away from them.”
Under date of November 9, 1984, Mr. Hillard received a reply from an international union official named Jorgensen. Mr. Jorgensen could speak to the issue with some authority, because it was he who had proposed the language adopted at Traverse City in 1980. Mr. Jorgensen advised Mr. Hillard that only those Saginaw employees who were needed to perform work actually being transferred from Saginaw to Bridgeport could retain their seniority.
Based on information supplied by the company,1 Mr. Jorgensen told Mr. Hillard that
*1305“Of the 37 members presently working at the Saginaw, Michigan operation, 28 would have the right to dovetail into the seniority list of the Bridgeport, Michigan operation, filling the 28 jobs available.
The remaining 9 presently employed, and 17 additional [laid-off employees] on the seniority list, would be eligible for recall according to seniority as jobs become available in the future, and would be placed at the bottom of the seniority list at that time.”
Mr. Hillard was obviously caught between a rock and a hard place. If he interpreted the Traverse City agreement in the way the redundant Saginaw employees wanted it interpreted, up to 26 men who had been working at Bridgeport for some time would find themselves out of work. Their discomfiture at losing their jobs would hardly be assuaged by the knowledge that they were being replaced by Saginaw employees whose job functions had been abolished, rather than being transferred to Bridgeport, and 17 of whom had already been laid off indefinitely.2 If Mr. Hillard interpreted the Traverse City agreement as its author said it ought to be interpreted, on the other hand, 26 Saginaw people were going to be unhappy with him. Very unhappy, as it turned out.
“I was caught in the middle,” Mr. Hillard testified. “There were two competing groups, two people wanting one job. It was an impossible situation.” The accuracy of this assessment seems incontestable.
With the support of the elected leadership of Local 337 — a 10,000 member union that was not shown to have any reason for hostility toward either of the relatively small groups that were in direct competition for jobs at Bridgeport — Mr. Hillard chose to follow the interpretation espoused by Mr. Jorgensen of the international union.
The company did not reject the Hil-lard/Jorgensen approach initially, and for the first six months after the Saginaw facility was closed, seniority was handled in accordance with the union’s interpretation of the agreement. The dissatisfied Saginaw employees sued the company and the local unions early in June of 1985, however, and at that point the company performed what Mr. Hillard described as a “flip-flop;” it started applying the contract in accordance with the plaintiffs’ interpretation, rather than the union’s.
The change in the company’s position was announced on June 18, 1985. On the following Sunday afternoon, according to the testimony of plaintiffs McGowan and Ackley, Business Agent Hillard had an exchange of words with the two men in the parking lot of the Bridgeport facility. Messrs. McGowan and Ackley contend that Mr. Hillard expressed himself somewhat indelicately on that occasion; pointing out that the union’s financial resources were far greater than the plaintiffs’, Mr. Hillard supposedly delivered himself of a vulgarity indicating that the union was determined to win the lawsuit that McGowan, Ackley and others had brought against it earlier that month.3
*1306For a considerable time during the negotiations over the 1986 collective bargaining agreement, Mr. Hillard continued to adhere to the position that seniority should be handled in accordance with the ruling made by the international union’s Mr. Jorgensen; that is, that the seniority of Saginaw employees should be preserved where the work they had been performing at the Saginaw facility was moved to Bridgeport, but not otherwise. The Saginaw employees were not eligible for election to the bargaining committee, but they knew what position Mr. Hillard was taking, because he arranged for them to have observers at the negotiations.
The chief negotiator for the company, a Mr. Arnst, testified that while it was highly unusual to have observers at collective bargaining sessions, there was nothing unusual in Mr. Hillard’s adhering to the position adopted by his international union. Mr. Arnst testified further that at no time during the negotiations did he have the feeling that Mr. Hillard was “personally hostile” to the Saginaw people.4
Shortly before illness forced him to drop out of the negotiations, Company Negotiator Arnst proposed a compromise under which the small group of employees who were still actively working at the Saginaw facility when it was closed in January would have their seniority dovetailed with that of the people at Bridgeport. Mr. Hil-lard and the union bargaining committee accepted this compromise, and it was made a part of the new collective bargaining agreement.
In accepting the company’s proposal, the jury concluded, the union violated the duty of fair representation it owed the 17 Saginaw employees who had been on indefinite layoff when the Saginaw facility was closed. On the record before us, and under this court’s decision in Ratkosky v. United Transportation Union, 843 F.2d 869 (6th Cir.1988), it seems to me that the question should not have been submitted to the jury; the union, in my view, was entitled to judgment as a matter of law.
II
When seniority rosters are consolidated in a situation where a business is being down-sized, as the Seventh Circuit pointed out in Zapp v. United Transportation Union, 727 F.2d 617, 620 (7th Cir.1984), “[ijnevitably, at least some workers will be less well off than they were prior to facility or seniority consolidation.... ” It is self-evident that “a union cannot, in a situation of job contraction, easily satisfy all its members.” Id. This is so, the Seventh Circuit explained, “not because of legally cognizable wrongdoing, but because [the disadvantaged employees] had the ill fortune to be part of a declining industry.” Id.5
The plaintiffs in the case at bar likewise had the ill fortune to be part of a shrinking *1307business. Because there were not enough jobs to go around at Bridgeport, some employees who wanted to work there and who felt they had legitimate claims on jobs at the facility were inevitably going to lose out. It was up to the union and the company to decide, through the collective bargaining process, who the individual winners and losers would be in this zero-sum game.
Seniority was clearly a proper subject for bargaining notwithstanding the company’s decision in June of 1985 to apply the soon-to-expire 1983 agreement in a way that differed from the interpretation given it by Local 337 and the international union. “Seniority rights are not vested,” Schick v. NLRB, 409 F.2d 395, 398 (7th Cir.1969), “but ‘derive their scope and significance from union contracts....’” id., quoting Aeronautical Industrial District Lodge 727 v. Campbell, 337 U.S. 521, 526, 69 S.Ct. 1287, 1290, 93 L.Ed. 1513 (1949). “Thus, seniority is a valid subject matter for the collective bargaining process.” Schick, id., citing Humphrey v. Moore, 375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370 (1964).
In negotiating seniority systems, as we declared in Ratkosky v. United Transportation Union, 843 F.2d 869, 876 (6th Cir.1988), “there are a variety of legitimate options, and the courts are careful not to substitute their judgments for those of the authorized labor organizations. Moreover, the fact that a seniority system in a collective bargaining agreement favors one group more than another does not in itself constitute a breach of the union’s duty.” In this connection we quoted the following passage from Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S.Ct. 681, 686, 97 L.Ed. 1048 (1953), a passage that is equally pertinent here:
“Inevitably differences arise in the manner and degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere existence of such differences does not make them invalid. The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.”
In Hardcastle v. Western Greyhound Lines, 303 F.2d 182 (9th Cir.), cert. denied, 371 U.S. 920, 83 S.Ct. 288, 9 L.Ed.2d 229 (1962), which we endorsed in Ratkosky, 843 F.2d at 877, the Ninth Circuit observed that it “is a fact inherent in the democratic process and the principle of majority rule” that portions of an electorate may be dissatisfied with the result of an election. Hardcastle, 303 F.2d at 187. “An essential element, then,” both the Hardcastle and Ratkosky panels read Huffman as teaching, “necessary to raise a limitation upon a union’s discretion in bargaining with respect to seniority rights[,] is a bad faith motive, an intent to hostilely discriminate against a portion of a union’s membership.” Hardcastle, 303 F.2d at 182, as quoted in Ratkosky, 843 F.2d at 877 (emphasis supplied).
As I read the trial record in the case at bar, it simply does not contain proof of the “bad faith motive” that is an “essential” part of the plaintiffs’ case. This is not a case where the union was motivated to discriminate against one faction on racial grounds, as in Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944). It is not a case where the union was motivated to discriminate against one faction because that group had resisted unionization, as in Teamster Local Union No. 42 v. NLRB, 825 F.2d 608 (1st Cir.1987).6 And this is not a case where a motive to discriminate unfairly and in bad faith could be inferred from the fact that the union’s position was “unsupported by any rational argument *1308whatsoever.” See Truck Drivers and Helpers Local Union 568 v. NLRB, 379 F.2d 137, 141 (D.C.Cir.1967). Like the Hil-lard/Jorgensen interpretation of the Traverse City agreement, the bargaining position taken by the union in negotiating the 1986 collective bargaining agreement was supported by an eminently rational argument. If the proper interpretation of the Traverse City agreement is a question of law, moreover, it seems to me that Mr. Jorgensen’s interpretation of his own handiwork is probably the correct one. As I read the Traverse City agreement, it contemplates “a complete transfer of Saginaw warehouse work to the Bridgeport facility,” and not a partial abandonment of Saginaw warehouse work.
The mere fact that Mr. Hillard may have uttered a common obscenity in telling Messrs. McGowan and Ackley that the union was going to win the lawsuit they had recently filed against it could not have told the jury anything about the bona fides of the union position that had prompted the plaintiffs to sue the union in the first place. And the record establishes without contradiction that Teamsters from Saginaw could be no less vulgar in speaking to Mr. Hillard than he allegedly was in speaking to them. (Perhaps the Bridgeport people would have been equally abusive if it had been their ox that was being gored.)
Also unpersuasive, it seems to me, is the circumstance that former Local 486 members were referred to as “Saginaw people” or “former 486 men.” That is what they were, after all; both terms are descriptive, and neither one would seem to be a term of opprobrium. See General Drivers and Helpers Union No. 229, 185 NLRB No. 84 (1970), where the National Labor Relations Board indicated that repeated use of the term “Binghamton men” had no probative value because it was merely “a convenient way of identifying employees who were transferred from the Binghamton unit....”
Given the dearth of evidence pointing to a bad faith motive in this case, I am satisfied that a finding for the plaintiffs could rest only on speculation. And if trial records as thin as this one can support findings of liability on account of union decisions that are essentially legislative in character, one wonders whether lawsuits such as this may not, over time, drive some unions out of existence or otherwise damage the collective bargaining process. See Humphrey v. Moore, 375 U.S. 335, 349-50, 84 S.Ct. 363, 371-72, 11 L.Ed.2d 370 (1964), where, in declaring that a union should not be “neutralized” where two sets of employees differ over an issue, the Supreme Court said that
“Conflict between employees represented by the same union is a recurring fact. To remove or gag the union in these cases would surely weaken the collective bargaining and grievance process.”
To allow recovery here, I believe, is to place union officials like Mr. Hillard and Mr. Jorgensen in a Catch-22 situation. Suppose that Mr. Jorgensen had told Mr. Hillard in 1984 that the Traverse City agreement required complete dovetailing whether or not there was a complete transfer of Saginaw work to Bridgeport. Suppose that Mr. Hillard had taken a comparable position in the collective bargaining negotiations that began late in 1985. If, as a result of that bargaining position, Saginaw men whose work had been abolished were permitted to displace Bridgeport men whose work had not been abolished, it is entirely possible, if not probable, that the hostility of the disadvantaged Bridgeport people toward the union representatives would have equalled or surpassed that manifested by the Saginaw people in the present situation. Throw in a little strong language on both sides, and under the precedent we are setting in this case the Bridgeport people would seem to have a pretty good lawsuit against their union.
It is difficult for me to square that result with the logic of Ratkosky, Huffman, and Humphrey v. Moore. Where any negotiated agreement will necessarily have an adverse effect on one set of employees or another, I believe there must be actual proof of a bad faith motive before the union can be required to respond in damages to the employees whose wishes are *1309not accommodated. Finding no such proof here, I respectfully dissent.

. In September of 1984, when the company advised Mr. Hillard that the Saginaw facility would be closed on January 13, 1985, the company gave the following personnel projections: "Barring deaths, retirements, quits or other losses of seniority, the Saginaw seniority list [as of January 13, 1985] will consist of 54 persons, 37 of whom are actively employed ... and the Bridgeport seniority list will con*1305sist of 180 persons as of the same date. The number of persons estimated as required to perform the Saginaw work transferred to Bridgeport as of January 13 is 28...."

. The company admitted that even if the Saginaw plant were not closed, most of the men who had been laid off there would never be recalled.

. The jury may or may not have believed that the exchange really took place. Mr. Hillard flatly denied it, and his travel records indicated that there was no Sunday in June when he was even in Bridgeport. In response to an interrogatory requiring Mr. McGowan to detail every act of Hillard’s that was claimed to manifest “hostility" toward him, moreover, Mr. McGowan made no mention of the alleged exchange in the Bridgeport parking lot.
Mr. McGowan’s answer to the interrogatory did refer to a union meeting held at the Comfort Inn in Saginaw on December 15, 1985. That meeting was called for the purpose of discussing the union’s position in negotiations with the company over the new contract that was to become effective in March of 1986. The interrogatory answer says that Hillard "stated he was going to take the seniority rights away from former Saginaw employees. If we didn’t like it, we were to sue him. And the union has never lost a case.”
Mr. Hillard readily admitted saying at the December meeting that the disaffected Saginaw people could sue him if they disagreed with the union's position:
*1306"There were people who were making statements from the floor. One was making a statement he was going to break me in half, and another one was making a statement he was going to sue me. So I took the less of the two evils. I said: go ahead, sue me.”
"To say the least,” Hillard explained elsewhere in his testimony, the atmosphere at the December meeting with the Saginaw people was “charged:"
"There was a lot of shouting and yelling, and quite frankly, I was a mother fucker and I was a no good son of a bitch, I was going to be sued, they were going to take away my house, my wife, my car and my first born child. It then went downhill from there."

. Mr. Hillard himself testified that he had no personal relationship with any of the individuals in either of the contending groups. Mr. Hillard was responsible for some 1,500 employees in 30 different companies. The trial record contains no evidence of any improper motive behind Mr. Hillard's desire that the 20-odd jobs at issue should be retained by Bridgeport people, rather than being given to Saginaw people whose jobs had been abolished.

. Notwithstanding the foregoing observations, the Zapp court held that a claim of breach of the duty of fair representation should not be dismissed on the pleadings where the pleadings adequately alleged hostile discrimination against the plaintiffs. 727 F.2d at 627. It is one thing adequately to allege hostile discrimination in the pleadings, of course, and quite another thing to establish hostile discrimination by probative evidence introduced at trial. For reasons to which Zapp alluded, the burden of actually proving hostile discrimination in a down-sizing situation is likely to be a very difficult one.

. It is true that the people from Saginaw had initially belonged to Local 486, while the people who went to Bridgeport first had always belonged to Local 337. These were both Teamster locals, however, and Mr. Jorgensen — the international union official whose interpretation of the Traverse City agreement formed the basis of Mr. Hillard’s bargaining position — could not possibly have had any parochial interest in favoring Local 337 members over individuals who had formerly belonged to another Teamster local.