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KAFTANTZIS v. D & L TRANSPORT CO.

January 29, 1982

JOHN KAFTANTZIS, PLAINTIFF,
v.
D & L TRANSPORT CO., AN ILLINOIS CORPORATION, AND AUTOMOBILE MECHANICS UNION, LOCAL 701, DEFENDANTS.



The opinion of the court was delivered by: Marshall, District Judge.

MEMORANDUM OPINION

This case requires us to decide an important question of national labor policy: What is the appropriate statute of limitation for an action brought by an employee against his employer and union which challenges the determination at a contractually authorized grievance proceeding that the employer has not violated its labor contract?

I

Plaintiff alleges the following. Plaintiff is an employee of defendant D & L Transport Co. ("D & L"), and a member of defendant Automobile Mechanics Union, Local 701 ("the union"). On May 23, 1980, plaintiff was laid off from his position as a mechanic at D & L's Gary, Indiana terminal, due to a downturn in D & L's business. On or about February, 1981, plaintiff learned that D & L had not laid off a less senior employee, in violation of the labor contract between D & L and the union. Plaintiff informed the union of this apparent violation of the contract.

On March 2, 1981, plaintiff was returned to his position at D & L's Gary terminal. On March 19, pursuant to the labor contract between D & L and the union, a grievance hearing was held to determine whether plaintiff's layoff was unauthorized and whether monies were owed to plaintiff as a result of the layoff. The hearing resulted in an adjudication adverse to plaintiff.

Plaintiff subsequently asked the union, which apparently had represented him at the grievance hearing, why it had not raised certain points at the hearing, including plaintiff's loss of wages and fringe benefits. Plaintiff received no response to his inquiry. Then, in April of 1981, plaintiff made a demand upon the union to initiate arbitration with D & L, pursuant to the labor contract. Again, plaintiff received no response from the union.

Plaintiff filed the instant complaint in the Circuit Court of Cook County, Illinois on August 26, 1981. The complaint proceeds on the theory that D & L violated plaintiff's contractual rights, and that the union breached its duty of fair representation to plaintiff. D & L filed a timely petition for removal to this court pursuant to 28 U.S.C. § 1441(b)(1976).*fn1 This court's jurisdiction rests on § 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185(a)(1976).

II

D & L has moved to dismiss the complaint on the ground that it is time-barred. Defendant contends the ninety day statute of limitations for actions to vacate arbitration awards contained in Indiana Code 34-4-2-13 (1976) applies to this action.*fn2 Plaintiff claims that the proper statute of limitation is the six month time limit for filing charges of unfair labor practices found in § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b)(1976). Since the instant complaint was filed more than three but less than six months after the grievance adjudication, we are required to choose between these statutes.

The question of whether state arbitration statutes of limitation or § 10(b) should be applied to actions of this type has not been decided in any reported decision. In United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981), the Supreme Court held that an action under § 301 challenging a mediator's decision and a union's subsequent refusal to arbitrate the grievance should be governed by the state statute of limitation for actions seeking to vacate arbitration awards, and not the state period of limitation for actions on contracts. However, the Court reserved the question of whether § 10(b) of the NLRA should be applied in preference to the state statute, noting that the question was not properly before it. See 101 S.Ct. at 1562 n. 2. See also id. at 1565 (Blackmun, J., concurring). However, Justice Stewart did indicate that, in his view, the appropriate statute of limitation was that found in the NLRA. See id. at 1565-68 (Stewart, J., concurring in the judgment). The court of appeals for this circuit has also mentioned but not reached the question of whether § 10(b) should be applied. See Davidson v. Roadway Express, 650 F.2d 902, 904 n. 2 (7th Cir. 1981). We are apparently the first post-Mitchell court to reach this question in a published opinion.*fn3

Congress did not specify which statute of limitation was to govern suits under § 301(a). Therefore, courts must decide which statute of limitation should govern as a matter of federal law, "which courts must fashion from the policy of our national labor laws." International Union, United Automobile, Aerospace & Agricultural Implement Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 701, 86 S.Ct. 1107, 1110, 16 L.Ed.2d 192 (1966) (quoting Textile Workers Union v. Lincoln Mills of Alabama, 353 U.S. 448, 456, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957)). In Hoosier Cardinal, the Court held that, for a breach of contract suit brought by a union against an employer under § 301, the appropriate statutes of limitations are the state statutes for contract actions. However, what the Court said as to why the state statute was appropriate indicates that its holding was limited.

  The present suit is essentially an action for
  damages caused by an alleged breach of an
  employer's obligation embodied in a collective
  bargaining agreement. Whether other § 301
  suits different from the present one might call
  for the application of other rules of timeliness
  we are not required to decide, and we indicate no
  view whatsoever on that question. 383 U.S. at 705
  n. 7.

Unlike Hoosier Cardinal, the instant suit is not simply a private breach of contract action. This much was established by United Parcel:

  [R]espondent's characterization of his action as
  one for "breach of contract" ignores the
  significance of the fact that it was brought in
  the District Court pursuant to ยง 301(a) of the
  LMRA and that the indispensible predicate for such
  an action is not a showing under traditional
  contract law that the discharge was a breach of
  the collective bargaining agreement, but instead ...

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