of collective bargaining agreements. The Supreme Court wrote:
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.
Compromises on a temporary basis, with a view to long range advantages, are natural incidents of negotiation. Differences in wages, hours and conditions of employment reflect countless variables.
Ford Motor Co., 345 U.S. at 338.
The Supreme Court has continued to sustain the broad degree of discretion afforded to unions when bargaining on behalf of their members. In Air Line Pilots Assoc. Int'l v. O'Neill, 499 U.S. , 113 L. Ed. 2d 51 (1991), the Court held that "the final product of the bargaining process may constitute evidence of a breach of [the duty of fair representation] only if it can be fairly characterized as so outside a 'wide range of reasonableness' that it is wholly 'irrational' or 'arbitrary'." 113 L. Ed. 2d at 65 (citing Ford Motor Co. v. Huffman, 345 U.S. at 338). In O'Neill, the Court reversed the Fifth Circuit's determination that the district court was improvident in granting summary judgment in favor of the union on the basis that the Union had not breached its duty of fair representation. In O'Neill, the pilots union agreed to settle a strike against Continental Airlines and pursuant to the agreement, the striking pilots were offered the option of (1) settling all outstanding claims with the airline and participating with non-striking pilots in the allocation of certain positions, or (2) electing not to return to work and receiving severance pay, or (3) retaining their individual claims against the airline and becoming eligible for work only after the reinstatement of all the settling pilots. The union was sued by certain pilots who insisted that the settlement agreement discriminated against striking pilots, thereby constituting a breach of the union's duty of fair representation.
The Supreme Court rejected the interventionist posture taken by the Fifth Circuit Court of Appeals. The Supreme Court held that the union rationally accepted a compromise between the claims of the two groups of pilots. Justice Stevens, writing for a unanimous Court, stated that the Fifth Circuit's determination that the union could have breached its duty of fair representation by entering into a strike settlement agreement providing less for its members than what they would have received from unilaterally abandoning the strike, "authorizes more judicial review of the substance of negotiated agreements than is consistent with national labor policy." Id. at 64. The Court elaborated on the policy of deference to union stewardship in resolving collective bargain disputes:
. . . Congress did not intend judicial review of a union's performance to permit the Court to substitute its own view of the proper bargain for that reached by the union. Rather, Congress envisioned the relationship between the courts and labor unions as similar to that between the courts and the legislature. Any substantive examination of a union's performance, therefore, must be highly deferential, recognizing the wide latitude that negotiators need for the effective performance of their bargaining responsibilities.
Id. at 64-65 (citations omitted). Consequently, a settlement "is not irrational simply because it turns out in retrospect to have been a bad settlement." Id. at 65 (emphasis in original). See also Groves v. Ring Screw Works, Ferndale Fastener Division, 498 U.S. , 112 L. Ed. 2d 508 (1990) (federal labor law encompasses a policy favoring the peaceful settlement of labor disputes); Medlin v. Boeing Vertol, 620 F.2d 957, 961 (3d Cir. 1980) (absent wholesale irrationality, to violate the duty of fair representation, it is necessary that the union act with bad faith motivation).
With these principles in mind, we turn now to the specifics of this case. As we discuss below, plaintiffs have failed to meet their burden of production in opposing defendants' motion for summary judgment because they have not demonstrated that there is a genuine dispute as to material fact. See Anderson, supra at 262. They have done no more than assert that they have suffered from discrimination at the hands of the union and that the company breached the 1988 agreement by interpreting the term "active payroll" to refer to those employees who were actively working. See Plaintiffs' Response to Defendant Unions' Statement of Material Facts.
Plaintiffs do not dispute that the Union repeatedly sought to broaden eligibility for the $ 5,000.00 lump-sum payment; rather, they are aggrieved by the fact that at the end of the negotiations, they were not entitled to this payment. Snyder Affidavit at P 13. This distinction is significant because it undermines plaintiffs' theory that the Union acted with bad faith motivation and thus, breached its duty of fair representation. Indeed, O'Neill commands that plaintiffs demonstrate that the 1988 memorandum is "so far outside a 'wide range of reasonableness', that it is wholly irrational" or that there be a showing of bad faith. O'Neill, supra at 65. In light of O'Neill, plaintiffs must demonstrate that it is "fully irrational" for working employees to receive a contractual benefit that non-working employees do not receive, or that this distinction provides an inference of bad faith or a discriminatory animus on the part of the union. In order to sustain this hybrid action, it is also necessary that the company breached the collective bargaining agreement by interpreting the phrase "active payroll" to mean only those employees who were working at the time of the payment award.
The court finds that the eligibility restrictions on receipt of the payment constituted reasonable approximations of the 1985 memorandum's proviso that an employee actually be at work in order to benefit from the company's profits. Snyder Affidavit at P 3. Indeed, if pre-employment military service was a legitimate basis for contractual distinctions in Huffman, the court believes that the parties in this suit rightly could distinguish between active and nonactive employment in making a payment award. The record before the court indicates that the Union attempted to maximize the welfare of its members by insisting upon the retention of the superior health care plan as well as by pushing for general wage increases. Simply because some members of the Union are dissatisfied with the deal does not provide grounds for this lawsuit, particularly in the absence of specific facts which indicate that the Union acted arbitrarily or in bad faith, or for discriminatory motives.
To reiterate: "the complete satisfaction of all who are represented is hardly to be expected." Huffman, 383 U.S. at 338. Additionally, even if the court assumes (which it does not) that in negotiating the 1988 memorandum, the Union breached its duty of fair representation, plaintiffs have failed to established that "but for" the Union's conduct, the company would have agreed to give plaintiffs the $ 5,000.00 lump-sum payment. Humphrey v. Moore, 375 U.S. 335, 350-51 (1964); Deboles v. Trans World Airlines, 552 F.2d 1005, 1019 (3d Cir.), cert. denied, 434 U.S. 837 (1977); Wood v. International Brotherhood of Teamsters, etc., 807 F.2d 493, 503 (6th Cir. 1986), cert. denied, 483 U.S. 1006 (1987).
Nor have plaintiffs mustered facts sufficient to preclude summary judgment on the theory that the Union breached its duty of fair representation by failing to process grievances. The Supreme Court in Vaca rejected the proposition that individual union members should be able to compel the processing of grievances, as such an outcome would undermine the union's position as the legal representative of its bargaining unit. If an individual employee "could compel arbitration of grievance regardless of its merit, the settlement machinery provided by the contract would be substantially undermined . . . ." Vaca, 386 U.S. at 191. It is through this settlement process, that frivolous grievances are ended prior to the most costly and time-consuming step in the grievance procedures. Id. at 192-93. See also Findley v. Jones Motor Freight, et al., 639 F.2d 953, 958 (3d Cir. 1981) (mere refusal to grieve a complaint does not establish a breach of duty, even if the complaint was meritorious). Indeed, proof that the Union may have acted negligently or exercised poor judgment is not enough to support a claim of unfair representation. Id. at 959 (citing Bazarte v. United Transportation Union, 429 F.2d 868, 872 (3d Cir. 1970)). Rather, a plaintiff must establish that the Union proceeded in a bad faith or arbitrary manner and that its shortcomings prejudiced the member's cause. Plaintiffs have made no such showing in this case. The record before the court indicates that both the Union and the company understood that the terms of the 1988 memorandum rendered plaintiffs' grievance meritless; that is, plaintiffs sought relief under the terms of an agreement which did not provide for that relief. See, e.g., Findley, supra.
Moreover, only one plaintiff, Mr. DeGennaro, filed a grievance with the Union. The record before the court is devoid of evidence which indicates that the local Union's refusal to grieve DeGennaro's complaint was either irrational or done in bad faith. See Sohyda Affidavit.
See Bazarte v. United Transp. Union, 429 F.2d 868, 872 (3d Cir. 1970) (a union has an obligation to act fairly under the collective bargaining agreement and not to assert or press grievances which it believes in good faith do not warrant such action).
The court therefore concludes that the Union did not breach its duty of fair representation and accordingly, plaintiffs' hybrid action must fail in view of the fact that such suits must demonstrate both a breach of the collective bargaining agreement on the part of the employer and a breach of the duty of fair representation on the part of the Union. DelCostello, 462 U.S. at 165; Findley v. Jones Motor Freight, 639 F.2d 953, 957-58 (3d Cir. 1981).
The court feels constrained, however, to remark that the record also reflects a dearth of evidence in support of the argument that the company breached the collective bargaining agreement. According to the terms of the 1988 memorandum, employees on the "active payroll" as of certain dates were to receive the lump-sum payment. The 1988 memorandum states that "inactive" employees (defined as employees who are on workers compensation, A&S or layoff) are not entitled to the payment unless they returned to work within 1988. As to plaintiff-retirees, i.e. non-employees, the 1988 memorandum contains no suggestion that they are entitled to the lump-sum payment. Nor, for that matter, does the Union owe retirees a duty of fair representation. See Central States Pension Fund v. Central Transport, 472 U.S. 559, 576 n.18 (1985); Allied Chemical and Alkali Workers v. Pittsburgh Plate Glass, 404 U.S. 157, 176-82 (1971). See also United Mine Workers Health and Retirement Fund v. Robinson, 455 U.S. 562, 574-75 (1982) (former members and their families may suffer from discrimination in collective bargaining agreements because the union need not affirmatively represent them or take into account their interests in making bona fide economic decisions on behalf of those whom it does represent). Thus, there is no indication that the Union and the company contravened the clear language of the restoration provision.
It is an axiom of contract law that where contract language is ambiguous (which is not the case here), it must be construed so as to give effect to the intent of the parties who formulated the contract. See Bagsby v. Lewis Bros., Inc., 820 F.2d 799, 802 (6th Cir. 1987) (courts should hesitate to disagree with the interpretation agreed upon by both parties to the agreement); Board of Trustees v. California Coop Creamier, 877 F.2d 1415, 1426 (9th Cir. 1989) (if a provision of a CBA is ambiguous, its interpretation depends on the intent of the parties to the CBA at the time of its execution). Both the company and the Union agree that the meaning of the term "active payroll" excludes plaintiffs and this erects a presumption that no breach of the collective bargaining agreement has occurred and plaintiffs cannot simply rely on assertions to the contrary when faced with a motion for summary judgment. See Plaintiffs' Response to Defendants' Statement of Material Facts at P 13.
Defendants further argue that under the most generous interpretation of the statute of limitations, plaintiffs' claims against the Union are time barred. The court agrees. Actions for breach of the duty of fair representation against a union are controlled by the six-month limitations period of § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b); DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151 (1983); Vadino v. A. Valey Engineers, 903 F.2d 253, 260 (3d Cir. 1990). The Court of Appeals has noted that:
The six-month period begins to run [in a duty of fair representation action] "when the claimant discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged violation."
Hersh v. Allen Products Company, Inc., 789 F.2d 230, 232 (3d Cir. 1986). The record before the court indicates that the six-month limitations period started to run in the spring or summer of 1988 on all claims against the Union and that plaintiffs did not file suit against the Unions until over a year later on September 22, 1989.
The statute of limitations was triggered either on June 23, 1988, when the company paid the lump sum to eligible employees or on August 9, 1988, when employees were informed once again as to the eligibility requirements. Plaintiffs either knew or should have known about the terms of the 1988 memorandum by this time. Indeed, numerous plaintiffs complained in the summer of 1988 about their failure to receive the lump-sum payment. These plaintiffs include Mr. Yanik, Mr. D'Orazio, Mr. Sherman, Mr. Pihiou, Mr. Deems, and Mr. Franell. Mr. Snyder received a letter postmarked July 1, 1988, in which plaintiffs' counsel wrote to the company threatening to institute legal proceedings on behalf of the plaintiffs if the company did not pay them the lump-sum bonus of $ 5,000.00. Snyder Affidavit at P 21. Thus, even if the court assumes that the limitations period commenced towards the end of August, 1988 (marked by the end of the two week time period the Union had in order to file a grievance), and even if the court assumes that that period was tolled on March 17, 1989, when plaintiffs filed their motion for leave to file an amended complaint, that March motion was clearly beyond the six-month limitation period set forth in § 10(b). See Childs v. Pennsylvania Federation Brotherhood of Maintenance Way Employees, 831 F.2d 429, 435 (3d Cir. 1987) (courts may select date of union's refusal to grieve complaint as the date for the accrual of the statutes of limitations in a suit against the union); Grasty v. Amalgamated Cloth & Textile Workers Union, 828 F.2d 123, 133 (3d Cir. 1987) (limitations period commenced when the futility of union appeals became apparent), cert. denied, 484 U.S. 1042 (1988).
Nor, for that matter, does it appear that plaintiffs have a relation back argument pursuant to Fed.R.Civ.P. 15(c), which plaintiffs do not assert themselves, but which the court shall consider on its own. If the March 17, 1989, motion for leave to file an amended complaint and the September 22, 1989, filing of the amended complaint are to relate back to the original October 31, 1988, complaint, the criteria set forth in Fed.R.Civ.P. 15(c) must be satisfied and it does not appear that they are. Although the claim asserted in the amended pleading "arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading", see Fed.R.Civ.P. 15(c)(2), plaintiffs have failed to satisfy the requirements set forth in Fed.R.Civ.P. 15(c)(3). That is, plaintiffs have failed to demonstrate that "but for a mistake concerning the identity of the proper party" the action would have been brought against the party to be brought in by amendment, namely the Union. The October 31, 1988, complaint alleges only arbitrary and bad faith conduct on the part of the company; it makes no allusions as to the Union. Thus, the court finds the seconded amended complaint to be beyond the six-months statute of limitations.
For the foregoing reasons, defendants' motions for summary judgment shall be granted.
An appropriate order will follow.
United States District Judge
Date: June 17, 1992
ORDER OF COURT
AND NOW, this 17th day of June, 1992, for the reasons set forth in the opinion filed this day, IT IS ORDERED that defendant Union's motion for summary judgment (Docket No. 40) be, and the same hereby is, granted;
IT IS FURTHER ORDERED that defendants' McGraw Edison Power System Division, Cooper Industries, Inc., Cooper Power Systems, Inc. motion for summary judgment (Docket No. 48) be, and the same hereby is, granted.
United States District Judge