Court Opinion

ID: 6123
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:13:21+00
Date Added: 2024-06-11T16:46:02.526616
License: Public Domain

United States Court of Appeals,

                                           Fifth Circuit.

                                           No. 91-6231.

  Mauricio GUTIERREZ, Francisco Aguirre, Simon Blanco, Teresa Calzada, Domingo Cortez,
Delfino De La Garza, Co ncepcion Garza, Alfredo Gonzales, Maria Concepcion Guillen, Elena
Herrera, Eliseo Lerma, Vincente Lopez, Maria Martinez, Pedro Ortiz, Anastacio Ramirez, Carolina
Salinas, Virginia Aguirre, Paula Chavez, Jose Garcia Sosa, Maria Guadalupe Garza, Candelaria
Hinojosa, Maria Zapata, and Ofelia Gaona, Plaintiffs-Appellants,

                                                 v.

                          UNITED FOODS, INC., Defendant-Appellee.

                                          Jan. 14, 1994.

Appeal from the United States District Court for the Southern District of Texas.

Before GARWOOD and DeMOSS, Circuit Judges.*

       GARWOOD, Circuit Judge:

       Plaintiffs-appellants union members sued their former employer, defendant-appellee United

Foods, Inc., for allegedly breaching the successors and assigns clause of its collective bargaining

agreement with their union, under which they assert that United Foods was obligated to, but did not,

require the purchaser of the business from United Foods to assume the labor agreement as a condition

of the sale. The court below awarded summary judgment to United Foods on the ground that the

employees lacked standing to bring suit under the Labor-Management Relations Act. We agree with

that decision and now affirm.

                                  Facts and Proceedings Below

       Plaintiffs in this case are twenty-five Mexican-American laborers who worked for United

Foods, Inc., a pro cessor of frozen foods, at its Brownsville Refrigerated Services Division in

Brownsville, Texas (the Brownsville facility). Plaintiffs were represented by Local 408 (previously

Local 171) of the United Food & Commercial Workers International Union (the Union) and were

members of a bargaining unit covering all production and maintenance employees, truck drivers,

   *
    Chief Judge Emeritus John R. Brown sat for oral argument in this case, but died before
issuance of the final decision herein. Accordingly, this decision is rendered by a quorum of the
panel pursuant to 28 U.S.C. § 46(d).
inspectors, and lead men at the Brownsville facility. United Foods and the Union had negotiated a

collective bargaining agreement covering the Brownsville facility, which included a successors and

assigns clause that is the focus of this case:

          "If the Owner or Company hereunder sells, leases or transfers his business or substantially all
          thereof, the successors, lessees or transferees shall be bound fully by the terms of this
          Agreement, and shall be obligated to pay the wages and salaries in effect at the time of the
          sale, lease or transfer, and shall assume all obligations of this Agreement in the place and
          stead of the Owner or Company signatory hereto."1

          On November 26, 1985, United Foods announced its plans to sell the Brownsville facility to

Refrigeration Engineering Company, the parent corporation of Tex-Mex Cold Storage, Inc. (Tex-

Mex), and informed all of its Brownsville employees that their employment with United Foods would

be terminated the following month. Upon learning about United Foods' plans, plaintiffs sought to

have the Union intervene to protect their rights under the collective bargaining agreement. However,

the Union took no action to enforce the agreement.

          As promised, the Brownsville facility was transferred to Tex-Mex on December 18, 1985, and

plaintiffs were discharged from employment. Plaintiffs applied for jobs with Tex-Mex, but were not

hired. However, Tex-Mex did hire other former United Foods employees who were less senior than

plaintiffs, in violation of plaintiffs' seniority rights under the collective bargaining agreement.

          Plaintiffs renewed their efforts to involve the Union and requested that it seek arbitration with

United Foods over the asserted breach of the successors and assigns clause. However, the Union

again took no action. Therefore, plaintiffs brought suit against United Foods2 under section 301 of

the Labor-Management Relations Act (LMRA), 29 U.S.C. § 185,3 alleging that, by failing to require

   1
    The collective bargaining agreement, which had been adopted on March 1, 1982, was due to
expire on March 1, 1986.
   2
    The plaintiffs also filed suit against the Union alleging a breach of the Union's duty of fair
representation. That suit was subsequently settled. No suit was filed against Tex-Mex, for a
successor corporation has no obligation to assume a collective bargaining agreement. See NLRB
v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 92 S. Ct. 1571, 32 L. Ed. 2d 61 (1972).
   3
       Section 301(a) of the LMRA provides:

                  "Suits for violation of contracts between an employer and a labor organization
                  representing employees in an industry affecting commerce as defined in this
                  chapter, or between any such labor organizations, may be brought in any district
Tex-Mex to assume the collective bargaining agreement, United Foods had breached the successors

and assigns clause.4 United Fo ods moved for summary judgment and the district court in a

memorandum opinion granted the motion on the basis of the plaintiffs' lack of standing to bring suit

under section 301.5

                                            Discussion

                                                 I.

        It has long been settled that section 301 permits a union to sue an employer with whom it has

negotiated a collective bargaining agreement for violations of that agreement. See Textile Workers

Union v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957). In Smith v. Evening

News Ass'n, 371 U.S. 195, 83 S. Ct. 267, 9 L. Ed. 2d 246 (1962), the Supreme Court held that section

301 also encompasses suits brought by union members seeking "t o vindicate individual employee

               court of the United States having jurisdiction of the parties, without respect to the
               amount in controversy or without regard to the citizenship of the parties." 29
               U.S.C. § 185(a).
   4
     We express no opinion as to whether this clause in fact created any obligation on the part of
United Foods. In Central States, Southeast & Southwest Areas Pension Fund v. PYA/Monarch of
Texas, Inc., 851 F.2d 780 (5th Cir.1988), this Court was faced with a successorship clause similar
to the one in this case. The clause at issue in Central States provided:

               "This agreement shall be binding upon the parties hereto, their successors,
               administrators, executors and assigns. In the event of a sale of the operation or
               any part thereof is sold, leased, transferred or taken over by sale, transfer, lease,
               assignment or bankruptcy proceedings, such operation shall continue to be subject
               to the terms and conditions of the agreement for the life thereof...." Id. at 781-82.

       Acknowledging that the clause contained "general successorship language," this Court
       nonetheless held that it did not require the employer to compel assumption of the
       collective bargaining agreement by the purchaser. Id. at 782. Lacking more "explicit" or
       "specific" language, the Court deemed the successorship clause to be "toothless." Id. at
       782, 783. But see Glass, Molders, Pottery, Plastics & Allied Workers Int'l Union v.
       Owens-Illinois, Inc., 758 F. Supp. 962, 971 (D.N.J.), aff'd without op., 941 F.2d 1201 (3d
       Cir.1991), cert. denied, --- U.S. ----, 112 S. Ct. 877, 116 L. Ed. 2d 781 (1992) (upholding
       an arbitrator's decision that a successorship clause obligated an employer to require a
       purchaser to assume a labor agreement and noting the tension between this conclusion and
       Central States ).
   5
    United Foods also argued before the district court that the plaintiffs had failed to exhaust the
collective bargaining agreement's grievance procedures or the Union's internal remedies. Granting
summary judgment on the standing issue, the district court did not reach these arguments. Nor do
we.
rights arising from a collective bargaining contract." Id. at 200, 83 S.Ct. at 270.6 Yet Smith is

properly read as establishing the jurisdiction of federal courts over such suits. Smith did not address

the separate question of the scope of employee standing to sue, as the majority acknowledged, see

id. at 201 n. 9, 83 S. Ct. at 270 n. 9, and a dissent emphasized: "[T]he Court studiously refrain[ed]

from saying when, for what kinds of breach, or under what circumstances an individual employee can

bring a § 301 action and when he must step aside for the union to prosecute his claim." Id. at 204,

83 S.Ct. at 272 (opinion of Black, J.).7

        The Supreme Court's sole attempt to articulate the standing requirements for suits brought

by individuals under section 301 occurred in Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96
S. Ct. 1048, 47 L. Ed. 2d 231 (1976). In Hines, the Court sustained an employee's right to sue his

employer for wrongful discharge in violation of a collective bargaining agreement. Individual workers

have standing under section 301, the Hines Court said, when they assert " "uniquely personal' rights

of employees such as wages, hours, overtime pay, and wrongful discharge." Id. at 5, 96 S.Ct. at 1055

(citing Smith ).8 Since Hines, however, the Supreme Court has provided no additional guidance as

to the scope of the personal rights which give rise to standing under section 301. Judicial

development of the Hines doctrine in the Courts of Appeals has been similarly scanty and in this

Circuit non-existent.9

   6
    Accord DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 163, 103 S. Ct. 2281, 2290, 76
L. Ed. 2d 476 (1983) ("It has long been established that an individual employee may bring suit
against his employer for breach of a collective bargaining agreement.") (citing Smith ).
   7
    That section 301 imposes analytically distinct jurisdictional and standing requirements was
reaffirmed recently in Wooddell v. Int'l Bhd. of Elec. Workers, --- U.S. ----, ---- & n. 4, 112 S. Ct.
494, 498 & n. 4, 116 L. Ed. 2d 419 (1991).
   8
    Before bringing such a suit against his employer, however, an employee must exhaust any
grievance or arbitration procedures contained in the collective bargaining agreement, see Republic
Steel Corp. v. Maddox, 379 U.S. 650, 85 S. Ct. 614, 13 L. Ed. 2d 580 (1965), unless the union has
breached its duty of fair representation, see Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903, 17
L. Ed. 2d 842 (1967). Nevertheless, to sue his employer, an employee must still prove that the
union breached its duty of fair representation. A union breaches its duty of fair representation by
acting in a "discriminatory, dishonest, arbitrary, or perfunctory manner." DelCostello, 462 U.S. at
164, 103 S.Ct. at 2290.
   9
   The Hines decision had been anticipated by this Court's decision in Woodward Iron Co. v.
Ware, 261 F.2d 138 (5th Cir.1958), in which Judge Wisdom held that two employees "have
                                                    II.

          Thus, to evaluate the standing of plaintiffs in this case, we must decide whether United Foods'

alleged breach of the successors and assigns clause violated a uniquely personal right of the plaintiffs.

Initially, we consider plaintiffs' suggestion that we should "characterize as personal any right

conferred by the collective bargaining agreement that is not reserved exclusively to the union as a

matter of law." We decline this invitation. Plaintiffs present no authority on behalf of their novel

theory and instead defend it on the ground that it strikes an appropriate balance between the

competing labor law interests in, on the one hand, having unions act as the exclusive representatives

of employee interests and, on the other hand, allowing workers to vindicate their individual rights.

Although we might agree that these are the relevant concerns,10 plaintiffs' theory does not strike a

proper balance. The standing of individual employees to bring suit under section 301 is an exception

to the general rule that only unions can litigate violations of labor agreements. Plaintiffs, however,

have identified only two rights which, under their theory, would be reserved exclusively to unions:

the right to bargain collectively with the employer, see May Dep't Stores Co. v. NLRB, 326 U.S. 376,

66 S. Ct. 203, 90 L. Ed. 145 (1945), and the right to picket an employer's premises, see Emporium

Capwell Co. v. Western Addition Community Org., 420 U.S. 50, 95 S. Ct. 977, 43 L. Ed. 2d 12 (1975).

Thus, under plaint iffs' theory, the exception would all but swallow the rule. This outcome would

contradict the Supreme Court's instruction that individual standing be limited to uniquely personal

rights.

standing in court to sue their employer for damages for unlawful discharge. This right is personal
to them and exists irrespective of the union's suable status and interest in prosecuting employee
claims under collective agreements." Id. at 141.
   10
     As this Court said in Harris v. Chemical Leaman Tank Lines, Inc., 437 F.2d 167 (5th
Cir.1971) (per curiam):

                 "While [Smith ] established that jurisdiction exists in this Court to entertain a suit
                 by an individual employee regarding personal rights under Section 301(a),
                 clarification of standing requirements was left to subsequent cases. The problem is
                 that of "striking a meaningful balance, consistent with existing labor policy,
                 between individual rights and the continued effectiveness of the collective
                 bargaining process.' " Id. at 170 (quoting Local Union No. 12 v. NLRB, 368 F.2d
12, 18 (5th Cir.1966)).
        Setting aside plaintiffs' overbroad theory, we have no trouble concluding that plaintiffs lack

standing in this case. As we conceive of it, our task is to determine whether the right being asserted

by plaintiffs is a uniquely personal right, and therefore amenable to individual enforcement, or a

collective right of all union members, and therefore reserved to the union to enforce. This line

between personal and collective rights is not entirely pellucid. Fortunately, we need not today draw

that line with precision for this is not a marginal case.

        The "right" which United Foods allegedly violated is that of failing to obtain an agreement by

Tex-Mex to assume the collective bargaining agreement and to be bound by its terms.11 This cannot

be fairly described as a personal right, much less a uniquely personal one. The successors and assigns

clause was a promise made by United Foods to ensure the perpetuation of the collective bargaining

agreement should United Foods sell its operation. As such, it represented an obligation from United

Foods to the Union as a collectivity. To be sure, assumption of the collective bargaining agreement

by Tex-Mex would have benefited individual workers to varying degrees. However, the right at

issue—United Foods' duty to honor the successors and assigns clause—is one that ran to all United

Foods employees in equal measure.

        The collective nature of the right is also evident in the following respect. Successful assertion

of the successors and assigns clause would mean that United Foods was obligated to get Tex-Mex

to honor not just plaintiffs' seniority rights but the whole package of benefits and privileges contained

in the collective bargaining agreement. Chief among these is the recognition of the Union as the

workers' representative. Article I, section one of the Agreement stated that "[t]he Company

recognizes the Union as the certified collective bargaining agent for all production and maintenance

employees, t ruck drivers, inspectors and leadmen employed by the Company in Cameron County,

Texas...." Therefore, by saying that United Foods was obligated to require Tex-Mex to assume the

collective bargaining agreement, plaintiffs necessarily are saying that United Foods was obligated to

   11
     At oral argument, plaintiffs' counsel mischaracterized the right at issue by arguing that
plaintiffs are merely asserting their seniority rights under the collective bargaining agreement. The
legal right which United Foods allegedly breached is that of failing to enforce the successors and
assigns clause. That United Foods' inaction caused plaintiffs to be passed over in favor of less
senior workers is a consequence of the right violation, but not the right violation itself.
require Tex-Mex to recognize the Union. Individual union members, however, have no authority to

assert a union's right to recognition. A union must do that for itself.

                                                   III.

        Our conclusion today is supported by Brown v. Sterling Aluminum Products Corp., 365 F.2d
651 (8th Cir.1966), cert. denied, 386 U.S. 957, 87 S. Ct. 1023, 18 L. Ed. 2d 105 (1967), in which

individual employees sued their employer for refusing to bargain over the company's plan to shut

down its plant and relocate it after the collective bargaining agreement had expired. The Eighth

Circuit, however, held that the employees lacked standing because the company's "failure to discuss

these matters according to the contract is a violation of the collective rights of the entire unit and not

of the personal rights of the individual members." Id. at 657. We agree with the principle articulated

by the Brown Court:

        "[W]henever the right sought to be enforced is not uniquely personal to the individual but is
        a right possessed by the bargaining unit as a whole, only the Union as the sole representative
        of that unit would normally have the standing to enforce the right. Thus the individual would
        have no standing to compel discussion of broad collective bargaining principles such as the
        re-negotiation of a new contract or the relocation of a plant, even if such discussion were
        required by the existing collective bargaining agreement." Id.12

It is plain that the successors and assigns clause was, in the words of the Brown court, a "collective

right[ ] of the entire unit" or a right "possessed by the bargaining unit as a whole."

        Plaintiffs attempt to evade the impact of Brown by pointing to that court's broad statement

that individuals can "enforce any contractual rights acquired under the agreem ent and sue for any

breach by the Company that occurred during the term of the agreement." Id. Plaintiffs conveniently

omit, however, the important qualifying language contained in the next sentence: "We believe,

however, that for an individual to bring an action under § 301 he must be seeking to enforce a right

that is personal to him and vested at the time of the suit." Id. (emphasis added) (citation omitted).

Brown simply cannot be read to sanction an employee's standing to sue to enforce a company's

   12
     This same principle was applied in Jensen v. Farrell Lines, Inc., 658 F.2d 27 (2d Cir.1981)
(per curiam), in which employees brought suit to enforce a provision of a purchasing agreement
which obligated their new employer to recognize the union which had represented them
previously. Citing Brown, the Second Circuit denied the employees standing on the ground that
"only [the union] could litigate over the existence of the bargaining relationship." Id. at 29.
alleged breach of a successors and assigns clause.

          Also buttressing our decision is Anderson v. Ideal Basic Industries, 120 L.R.R.M. (BNA) 2039, 1985
WL 56750 (E.D.Tenn.1985), aff'd, 804 F.2d 950 (6th Cir.1986), a factually analogous case. As here,

in Anderson individual union members brought suit under section 301 to enforce a successorship

clause after their employer had sold its operations to another firm and failed to require the purchaser

to accede to the terms of a collective bargaining agreement. One issue in Anderson was whether the

employees had the requisite standing to enforce the successorship clause. It was held that they did

not.

          "The Court further is of the opinion that any obligations created by the successorship clause
          are obligations to the bargaining unit as a whole and are not obligations to the individual
          members.... Individual union members have no authority to bargain with the Company over
          the terms of the Agreement. Rather, the Union has the power and responsibility to enforce
          the successorship clause in bargaining with the Company." Id. at 2044 (citations omitted).

          Plaintiffs attempt to distinguish Anderson on the ground that the successorship clause in that

case obligated the company to bargain with the union, which plaintiffs concede is a collective right.

This is a mistaken reading of Anderson. The successorship clause in Anderson did not impose a duty

to bargain; it was, in fact, quite similar to the clause at issue in this case.13 To be sure, Anderson did

hold that the employees lacked standing to sue their employer for failing to bargain with the union.

However, the duty to bargain had nothing to do with the successorship clause. As the Anderson

court recognized, employers have a dut y to bargain with a union over the effects of a plant shut

down. See First Nat'l Maintenance Corp. v. NLRB, 452 U.S. 666, 677 n. 15, 101 S. Ct. 2573, 2580

n. 15, 69 L. Ed. 2d 318 (1981) (cited in Anderson, 120 L.R.R.M. (BNA) at 2043). This duty is derived not

from any collective bargaining agreement, however, but from §§ 8(d) and 8(a)(5) of the National

   13
        The successorship clause in Anderson provided:

                 "This Agreement shall be binding upon the parties hereto, their successors,
                 administrators, executors and assigns. In the event of the sale or lease by the
                 Company of any plant or terminal covered by this Agreement, or in the event the
                 Company is taken over by sale, lessee assignments, receivership or bankruptcy
                 proceedings, such operation shall continue to be subject to the terms and
                 conditions of this Agreement for the life thereof. The Company shall give notice
                 of the existence of this Agreement to any purchaser, lessee, assignee, etc., of this
                 Agreement. Such notice shall be in writing with a copy to the Union not later than
                 the effective date of sale." 120 L.R.R.M. (BNA) at 2042 n. 2.
Labor Relations Act, 29 U.S.C. §§ 158(d) and 158(a)(5). Thus, Anderson 's holding pertaining to

standing to enforce the successorship clause was entirely distinct from its holding pertaining to

standing to require bargaining.

                                                 IV.

       Plaintiffs direct our attention to several circuit court cases which uphold the standing of

individual employees to sue under section 301. None of these cases, however, articulates a principle

which would support the conclusion that plaintiffs have standing in this case.

        In Schultz v. Owens-Illinois, Inc., 560 F.2d 849 (7th Cir.1977), cert. denied, 434 U.S. 1011,

98 S. Ct. 723, 54 L. Ed. 2d 754 (1978), the Sevent h Circuit held that machine manufacturing shop

employees had standing to sue their employer for failure to institute an apprenticeship program. In

so doing, the Schultz court purported to apply a two-part "test" for determining whether an asserted

right is uniquely personal. According to the Schultz court, a right is uniquely personal if, first, the

"employment benefit is mandatory under the collective bargaining agreement," id. at 854, and second,

if there is a "factual predicate which is unique and personal to a particular employee." Id. In our

opinion, this "test" does nothing to further or clarify the analysis of the issue before us. The first

prong merely asks whether the employee was entitled to some benefit under a collective bargaining

agreement. But this does not tell us whether the entitlement is personal or collective. The second

prong asks whether that right or interest is unique and personal. That, however, merely restates the

question which we are called upon to decide. Thus, from the Schultz "test" we can derive no

principle which would support standing for plaintiffs. On the other hand, Schultz does endorse the

principle upon which we base our decision today. Namely, that a uniquely personal right is not "a

right possessed by the bargaining unit as a whole." Id. at 855; see also id. at 854 ("These plaintiffs

are not seeking to represent the entire work force of 366 employees.").

       In Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 511 (9th Cir.1978), the Ninth

Circuit held that two technicians had standing to sue to recover overtime pay as provided under a

collective bargaining agreement. The Lerwill Court, however, articulated no theory of what rights

are "uniquely personal" and merely took its cue from dicta in Hines that among such rights are
agreements relating to "wages, hours, overtime pay, and wrongful discharge." Hines, 424 U.S. at

562, 96 S.Ct. at 1055 (emphasis added) (quoted in Lerwill with identical emphasis, 582 F.2d at 511).

        Similarly, in Diaz v. Schwerman Trucking Co., 709 F.2d 1371 (11th Cir.1983) (per curiam),

the Eleventh Circuit held that employees could sue to recover the back pay to which they were

entitled under a collective bargaining agreement. As in Lerwill, Diaz reasoned that the case "involves

wages, a matter Hines and Smith expressly held to be a proper subject of an employee's section 301

suit." 709 F.2d at 1374.14

        Finally, plaintiffs cite Santos v. Dist. Council of New York City and Vicinity of United Bhd.

of Carpenters & Joiners, 547 F.2d 197, 199-200 (2d Cir.1977), in which the Second Circuit held that

union members had standing to seek enforcement of an umpire's resolution of an interunion dispute.

Whatever analogical significance this holding may have, we believe that the Santos court confused

standing under Article III with standing under section 301. Santos quoted from Warth v. Seldin, 422
U.S. 490, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975), an Article III standing case concerning a

constitutional challenge to a zoning ordinance. In any event, a more recent decision by the Second

Circuit cited with approval Brown v. Sterling Aluminum Products Corp., a case which squarely

supports our holding. See Jensen v. Farrell Lines, Inc., 658 F.2d 27, 29 (2d Cir.1981) (discussed

supra in note 12).

                                            Conclusion

        For the reasons stated, we conclude that plaintiffs lack standing to bring suit under section

301 because United Foods' alleged breach of the successors and assigns clause did not violate a

uniquely personal right of the plaintiffs. The judgment of the district court is accordingly

        AFFIRMED.

   14
     Diaz characterized this as an issue of subject matter jurisdiction rather than personal
standing. This confusion is understandable since, as noted above, the Supreme Court's Smith
opinion was cast in jurisdictional terms and only later did Hines address standing under section
301. Standing was also involved in Diaz, but the issue was standing under Article III rather than
standing under section 301.