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MURMAN v. RENOLD POWER TRANSMISSION CORP.

September 26, 1985

THOMAS MURMAN, Plaintiff
v.
RENOLD POWER TRANSMISSION CORPORATION, ATLAS CHAIN COMPANY, INC. and UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, LOCAL UNION NO. 271, Defendants


Nealon


The opinion of the court was delivered by: NEALON

Plaintiff brought this action pursuant to § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a) alleging that defendants, union and employer, violated the collective bargaining agreement by improperly refusing to continue plaintiff's Blue Cross/Blue Shield insurance coverage.

 Cross motions for summary judgment have been filed by all parties and the motions are now ripe for disposition. For the reasons set forth below, the motions for summary judgment filed by Renold Power Transmission Corporation [Renold], Atlas Chain Company, Inc. [Atlas chain] and the United Automobile Aerospace and Agricultural Implement Workers of America, Local Union 271 [Union] will be granted and plaintiff's Motion for Summary Judgment will be denied. *fn1"

 According to the undisputed facts set forth by defendants, plaintiff was originally employed as an assembler in 1956 by Atlas Chain and Precision Products, Inc. and a member of Local Union 271. Plaintiff was injured sometime in March, 1974 and has not worked since April 4, 1974.

 In July, 1974 Atlas Chain and Precision Products Company and Renold, Inc. merged and operated under the name of the former. In February, 1981, the company's name was changed to Renold Power Transmission Corporation [Renold].

 During the merging and name-changing, plaintiff, pursuant to collective bargaining agreements and as a member of the Union, continued to receive all his disability benefits and, specifically, coverage for Blue Cross/Blue Shield was provided.

 In August, 1982, however, Renold announced that it would no longer continue with its chain manufacturing operations and would attempt to locate a buyer. If no purchaser was located, production would cease in March, 1983. Apparently Renold was unable to find a buyer because in March, 1983, the chain operations were closed and all but a skeleton crew were permanently laid-off. Plaintiff had been advised in January, 1983 that his employment status would be terminated on March 1, 1983. An Asset Purchase Agreement dated June 17, 1983, resulted in Renold selling its manufacturing operations to Atlas. *fn2" Atlas was formed for the purpose of acquiring Renold's assets at the West Pittston location in order to continue the operation of the plant pursuant to an Employee Stock Ownership Plan. Later, in October of the same year, Renold and the Union entered into a "Plant Close-Down Agreement" which terminated the existing collective bargaining agreement as of August 15, 1983 between Renold and the Union and which, upon ratification, terminated all employees', including plaintiff's, health insurance coverage. Plaintiff was advised of the ratification meeting but did not attend. Atlas and the Union entered into a collective bargaining agreement substantially the same as the former agreement between Renold and the Union. The Atlas collective bargaining agreement, however, provided that those employees who had contributed $200.00 for the study of the Employee Stock Ownership Plan would retain the seniority they had previously held with Renold. Those who had not contributed would acquire seniority as of their first day of employment with Atlas.

 Although plaintiff had been informed of the Union's wish for a study regarding the ESOP and had been requested to provide a $200.00 contribution, he did not contribute because he had insufficient funds. The letter requesting contribution stated that if the ESOP were successful, those who had contributed would be hired first. Because plaintiff did not contribute, he did not obtain seniority pursuant to the Union-Atlas Collective Bargaining Agreement. Atlas provided health insurance benefits for the former Renold employees who were called back to work. Those employees who were not called back were required to provide their own coverage.

 By letter dated November 9, 1983, plaintiff was informed that he was transferred from group to non-group coverage for health insurance and he would be billed directly in the future by the health insurance carrier for all premiums. After being informed of this, plaintiff did not file a grievance under the collective bargaining agreement, nor did he request anyone in the Union to file a grievance on his behalf.

 II. DISCUSSION

 Defendants contend, inter alia, that plaintiff's failure to exhaust the internal union grievance procedure forecloses his ability to maintain this suit. The court agrees. Because the court finds the exhaustion issue dispositive, the merits of plaintiff's claims are not reached.

 In Clayton v. International Union, Automobile Aerospace & Agricultural Implement Workers of America, 451 U.S. 679, 68 L. Ed. 2d 538, 101 S. Ct. 2088 (1981), the Supreme Court held that only under limited circumstances would exhaustion of internal union procedures be excused. The Court held that "where the internal union procedures cannot result in reactivation of the employee's grievance or an award of the complete relief sought in his § 301(a) suit, exhaustion will not be required with respect to either the suit against the employer or the suit against the union." Id. at 685 (emphasis added).

 In Clayton, plaintiff was dismissed from his employment for violating a plant rule prohibiting certain behavior. Pursuant to the collective bargaining agreement, plaintiff asked his union representative to file a grievance on the ground that just cause did not exist for his dismissal. After investigation, the union decided not to proceed with the grievance by going to arbitration. Plaintiff did not appeal the decision but instead filed an action in federal court pursuant to § 301(a) of the Labor Management Relations Act. 29 U.S.C. § 185(a). The Supreme Court held that plaintiff's failure to exhaust, i.e., appeal the union's refusal to proceed on plaintiff's grievance to ...


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