Appeal from the United States District Court for the Northern District of Indiana, South Bend Division. No. S 75-129 - Robert A. Grant, Judge.
Cummings, Sprecher, and Wood, Circuit Judges.
Plaintiff-Appellant Gene Battle and twenty-four others (appellants) brought an action against Clark Equipment Company (company) for breach of contract and against International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, and its Local No. 1265 (union), for failure to fairly represent them. Jurisdiction was invoked under Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a).
The district court denied appellants' motion for partial summary judgment, granted the defendants' motions for summary judgment and ordered the dismissal of the company's cross-claim against the union. We affirm.
This dispute arose from actions taken by the company and the union upon the closing of the company's Brown Trailer Division in Michigan City, Indiana. Appellants were employed by the company as production and maintenance workers until January, 1975. In November, 1974, the company announced that it had decided to close its Brown Trailer Division and that the entire work force would be permanently laid off. The union subsequently met with the company to negotiate an agreement in light of the plant closing. It is with respect to these negotiations and the purported ratification of the subsequent agreement that appellants allege a breach of contract against the company, and a breach of the union's duty of fair representation.
On January 5, 1975, a special union meeting was held for the purpose of discussing an amendment to the Supplemental Unemployment Plan (SUB plan), contained in Article XXV of the Collective Bargaining Agreement. The SUB plan provided for regular weekly benefits payable to any qualified employee laid off during the course of employment. During the previous negotiations with the company, the union had requested that the company freeze the SUB plan and, upon ratification of an amendment agreement, distribute the SUB plan's funds on a pro rata seniority basis, along with making other demands of the company not relevant here.*fn1 The company acquiesced in the union's demands. At the January 5, 1975 meeting, union officials spoke in favor of the freeze and pro rata distribution explaining that unless regularly expected SUB plan payments were discontinued, the funds would be depleted through payment of unemployment benefits to those with less seniority who would be laid off in the earlier stages of the company's phase-out of the Brown Trailer Division. Appellants allege they were prevented from fully expressing their views at this meeting. A secret ballot election was conducted which resulted in the change being approved by a vote of 209 to 39.
By its own terms, the amendment agreement was not to become effective until it was executed by authorized representatives of the parties and at least 90% of those employees who had SUB plan credits as of December 29, 1974. To be included within the signatures of such employees were the signatures of 100% of all employees who were on layoff from the company on the date on which the union notified the company in writing that the membership of Local No. 1265 had ratified the amendment agreement. (Amendment Agreement, Section B.) This included the appellants in this action. Upon ratification, the parties met to negotiate the technical language of the amendment agreement and regular SUB plan distributions ceased.
By April, 1975, all but seven or eight workers had signed the amendment agreement. In order to secure their signatures, the company paid these workers (none of whom are appellants in this action) to sign releases. Subsequently, several of the appellants asked to have their names removed from the list. Their requests were denied. In June, 1975, after all signatures had been obtained, the pro rata distribution of the SUB plan fund was made. Appellants allege that their signatures were fraudulently obtained.
After being laid off, the appellants applied for SUB benefits as if there had been no modification of the plan, but no action was taken on their applications. Without seeking further redress from the union or the company, appellants filed this suit in the district court on July 23, 1975.
As against the union, in addition to attacking the fairness of the amendment agreement itself, appellants allege that their signatures were obtained by fraudulent misrepresentations and that there were irregularities in the January 5 meeting, all in violation of the union's duty of fair representation. As against the company, appellants argue that since the SUB plan amendment was improperly executed and ratified, the company's failure to pay them their benefits under the premodification plan constituted a breach of contract. They also argue that the company discontinued payment of SUB benefits before the earliest date on which the amendment could have become effective under its own terms. Lastly, appellants contend that neither the union nor the company had the power to amend the SUB plan because of the existence of a contract clause prohibiting either of them from requesting any modification of the plan during the life of the collective bargaining agreement.*fn2
The district judge granted the union's motion for summary judgment on the ground that the appellants had not exhausted the intra-union remedies open to them or shown that an attempt to do so would have been futile. The judge also found that the appellants had not demonstrated that the union had engaged in any "arbitrary, discriminatory or bad faith conduct" in violation of its duty of fair representation. The court granted the company's motion for summary judgment on the ground that appellants had unjustifiably ...