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Vadino v. A. Valey Engineers

filed: May 17, 1990; As Amended May 22, 1990.


On Appeal from the United States District Court for the Eastern District of Pennsylvania; D.C. Civil No. 87-0940.

Author: Sloviter

Sloviter and Becker, Circuit Judges, and Lifland, District Judge*fn*

SLOVITER, Circuit Judge .




This appeal in an action filed by an employee against his former employer raises, inter alia, a novel issue of the interrelationship between claims made under the Labor Management Relations Act (LMRA) and the Fair Labor Standards Act (FLSA). In one count, filed under section 301 of the LMRA, 29 U.S.C. § 185 (1982), the employee alleged that the employer breached the provisions of the relevant collective bargaining agreement by paying the employee less than that provided for in the agreement, and that the union, which was not sued, breached its duty of fair representation by failing to process his grievance against the employer. In another count, the employee claimed that the alleged underpayments in his regular rate of pay resulted in corresponding underpayments of overtime wages in violation of the FLSA, 29 U.S.C.A. § 207(a) (West Supp. 1989). The employer, in its motion for summary judgment, interposed a number of discrete defenses including LMRA and FLSA statute of limitations defenses and failure to exhaust remedies to which the employee has responded with claims of tolling, excuse, and futility. Despite the complex legal issues presented, the district court, without explanation, granted the defendant employer's motion for summary judgment on both the LMRA and FLSA claims. This appeal followed.


Facts and Procedural History

Louis Vadino, the plaintiff, is the nephew of Lothar Budike, the President and fifty percent shareholder of A. Valey Engineers, Inc. (A. Valey), formed in 1964, and Valey Service and Maintenance, Inc. (Valey Service), formed in 1977. Although both companies are in the business of heating, ventilation and air conditioning service and maintenance, A. Valey is a union company, while Valey Service is a non-union company.*fn1

In 1978, Budike, at the request of his sister, Vadino's mother, hired Vadino to work for Valey Service, the non-union company. Budike's other company, A. Valey, which has a collective bargaining contract with Steamfitters Local 420 ("Local 420" or "Union"), had a contract to provide heating, air-conditioning and ventilation in the construction of the Gallery Mall in Philadelphia, Pennsylvania. In March 1979, Budike transferred Vadino to the payroll of A. Valey so that he could work on the Gallery project. Under the Local 420 Collective Bargaining Agreement, a journeyman was defined as a refrigeration and air conditioning mechanic with four years of experience in heating, ventilation or air conditioning service and maintenance, and an apprentice as an individual engaged in learning the trade of a journeyman.*fn2 Although Vadino was not qualified to enter Local 420 as a journeyman because he had no prior experience with heating, ventilation or air conditioning service and maintenance, Budike enrolled Vadino and a few former in-house Gallery Mall employees in Local Union 420, and Vadino received a union card indicating that he was "a union member as a metal trades journeyman." App. at 112.*fn3

Vadino worked for A. Valey from March 1979 until June 1985. During this time he was paid an hourly rate higher than an apprentice rate but lower than a journeyman's rate. His overtime wages were calculated on the basis of the hourly rate actually paid. According to Vadino, in 1981 or 1982 he became suspicious that he was being paid less than the journeyman's rate and questioned Budike on a couple of occasions during these years. He was told that A. Valey was not doing well and was reassured that he would eventually be paid the journeyman's rate. Vadino became the union shop steward in December 1984 or January 1985. He claims that shortly thereafter, approximately between January and June of 1985, he learned from the Union, in response to his inquiry, the rate of journeyman wages set forth in the collective bargaining agreement. He took no action with respect to his alleged underpayment until June 1985 when he left A. Valey. Vadino claims that thereafter he contacted Budike on numerous occasions from June 1985 through the end of 1986 regarding the alleged underpayment and that Budike repeatedly promised that he would pay him all back wages due after he received money owed to him from the Gallery Mall.*fn4

After leaving A. Valey in June 1985, Vadino also "tried to get a lawyer to see if [he] had a legal basis of getting his back pay . . . ." App. at 141. The first lawyer he contacted did not handle labor cases. In late 1985, he contacted a second lawyer who told him that he needed a letter from the Union authorizing him to handle Vadino's action. As a result, Vadino contacted George Parsons, the Local 420 business representative, in December 1985 or January 1986. This was the first time Vadino sought any Union assistance with respect to his alleged underpayment of wages.

Vadino contends that Parsons assured him that he did not need a lawyer because the Union would handle his grievance, and that Parsons informed him that he would check the records regarding his rate of pay and would get back to him. Vadino did not hear from Parsons for a month, contacted him, and was told by Parsons that he had contacted Budike and was waiting to hear from him. Vadino then contacted Parsons on three or four subsequent occasions, each one separated by about a month, and was given a variety of excuses as to why Parsons had not contacted him, including that Parsons was busy, had forgotten, and that Budike was on vacation.

Parsons tells a different story. In his deposition, Parsons claims that after his meeting with Vadino, he contacted Budike, who said that Vadino had never repaid a loan made by A. Valey to Vadino. Parsons then contacted Vadino, explained to him Budike's comments, and was told by Vadino to "forget about that." App. at 47. Parsons claims that he was never again contacted by Vadino regarding this matter, and that he did not regard Vadino's contact as the initiation of a formal complaint, but rather as an inquiry.

Although Vadino acknowledges that he never explicitly requested Parsons to begin the formal arbitration process that was mandated in the collective bargaining agreement,*fn5 he believed such a request was implicit in his calls for assistance. In May of 1986, Vadino again sought redress through the services of a lawyer and, ultimately, in June or July of 1986, he contacted his present counsel.

Vadino filed his complaint in federal court against A. Valey on February 19, 1987, which, as amended,*fn6 alleges two causes of action. Count One, brought under section 301 of the LMRA, alleges that A. Valey breached the collective bargaining agreement by paying Vadino less than the journeyman's rate. Vadino also avers that the Union breached its duty of fair representation by "maliciously and in bad faith [refusing] to start . . . a grievance" against A. Valey. App. at 3. Count Two alleges, inter alia, that A. Valey violated the FLSA by paying him less than one and one-half times his "regular rate" of pay for hours worked in excess of 40 hours per week. Vadino contends that his overtime rate should have been one and one-half times the rate that he was entitled to as a journeyman under the collective bargaining agreement, rather than that which he actually received. Vadino seeks total damages in excess of $66,000, as well as interest, costs and attorneys fees.

A. Valey moved for summary judgment on both causes of action. It contended that the section 301 claim was not filed within six months from the date it accrued as required under DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 76 L. Ed. 2d 476, 103 S. Ct. 2281 (1983), and hence was time-barred. It also contended that suit was barred because Vadino had not exhausted either the internal grievance procedures set forth in the Union constitution or the arbitration procedures mandated in the collective bargaining agreement.

A. Valey contended that it was entitled to summary judgment on the FLSA claim on any one of three grounds. First, a grant of summary judgment on the section 301 claim entitled it to a grant of summary judgment on the FLSA claim because the FLSA claim was dependent on the contention under section 301 that Vadino was paid less than the journeyman's rate in breach of the collective bargaining agreement. Second, the FLSA claim was time-barred because it was not commenced within two years after the cause of action accrued as required under the Portal-to-Portal Act, 29 U.S.C. §§ 251-262 (1982). Third, Vadino's overtime wages were properly computed because they were based on the hourly wages Vadino actually earned which constitutes the "regular rate" under the FLSA.

The district court, without giving any explanation of the basis for its order, granted A. Valey's motion for summary judgment.*fn7 Vadino filed this timely appeal. Our review of the district court's grant of summary judgment is plenary. Koshatka v. Philadelphia Newspapers, Inc., 762 F.2d 329, 333 (3d Cir. 1985). In reviewing the district court's order granting the defendant's motion for summary judgment, we must view the underlying facts in the light most favorable to the party opposing summary judgment and accept the non-movant's allegations as ...

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