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Rupe v. Spector Freight Systems Inc.

decided: May 28, 1982.

MAXIM B. RUPE, PLAINTIFF-APPELLEE, CROSS-APPELLANT,
v.
SPECTOR FREIGHT SYSTEMS, INC., DEFENDANT-APPELLANT, AND TEAMSTERS, CHAUFFEURS & HELPERS UNION, LOCAL 279, DEFENDANT-APPELLEE, CROSS-APPELLEE.



Appeals from the United States District Court for the Central District of Illinois, Springfield Division. No. 80-C-3012 -- J. Waldo Ackerman, Judge.

Before Swygert and PECK,*fn* Senior Circuit Judges, and Eschbach, Circuit Judge.

Author: Eschbach

The dispositive issue in these consolidated appeals pertains to the duty of fair representation which a local union owes to its members. Plaintiff Maxim Rupe (Rupe) instituted this action under § 301 of the Labor-Management Relations Act, 29 U.S.C. § 185, against his former employer, Spector Freight Systems, Inc. (Spector), and his union, Local 279 of the Teamsters, Chauffeurs & Helpers Union (union), claiming that Spector breached the terms of the applicable collective bargaining agreement by failing to promote him to "seniority" employment status and by discharging him without just cause, and accusing the union of breaching its duty of fair representation in processing his grievance against Spector. Rupe sought monetary relief against both Spector and the union and an order of reinstatement as a "seniority" employee at Spector. The case was tried before a jury. At the close of the evidence the district court granted a directed verdict in favor of the union on the basis that Rupe had failed to exhaust his intra-union remedies. The case against Spector was then submitted to the jury, which returned a verdict in favor of Rupe. Rupe was awarded a money judgment against Spector and the district court subsequently ordered Spector to rehire Rupe as a seniority employee. In No. 81-1490 Spector appeals from the judgment entered on the jury verdict, and in No. 81-1590 Rupe cross-appeals from the directed verdict in favor of the union. Because we find that there was insufficient evidence from which the jury could have inferred that the union breached its duty of fair representation, we affirm the judgment in favor of the union and reverse the judgment against Spector.

I.

FACTS

The applicable collective bargaining agreement provided for three employment classifications in Rupe's bargaining unit: "regular" (or "seniority"), "probationary" and "casual." Probationary workers were those who had not worked more than 30 days within 90 calendar days nor a total of 55 days during any twelve month period. After completing the probationary period, employees were classified as "regular" or "seniority" workers, whereupon they began to accrue seniority rights. Casual employees were in a completely different situation. Unlike seniority employees, casual workers were not required to work on a regular basis; they typically telephoned Spector from day to day to learn whether work was available.

In the fall of 1977 Rupe was hired as a casual worker at Spector's Decatur, Illinois freight terminal. Rupe signed a "waiver" of seniority rights in November of 1977. After working a total of 28 days, he was laid-off.

In the latter part of 1977, Waller, who was hired by Spector as a casual employee, filed a grievance challenging Spector's practice of requiring casual employees to waive their rights to accrue seniority. In the grievance proceeding the union contended that because it had not agreed to Spector's practice of hiring persons as casual workers, as required by the collective bargaining agreement,*fn1 the waivers were invalid and Spector could not prevent any employee from accruing seniority. The grievance committee agreed with the union, declaring the waivers invalid, and decided that Spector could not employ persons as casual workers without the union's consent.

In the aftermath of the Waller grievance the union initially took the position that it would not allow any employee to be classified as a casual worker. However, after discovering that a substantial number of employees who had previously signed waivers wished to maintain their "casual" employment status so that they would not be obligated to work on a regular schedule, the union agreed that Spector could permit workers who had previously signed waivers to voluntarily waive their seniority rights. Consequently, the union required Spector to contact all employees who had previously signed waivers and afford them the option of becoming seniority employees or remaining in the casual category, in which case they were required to execute a second waiver.

On January 20, 1978, having been recalled from layoff, Rupe resumed work with Spector and signed a second waiver of his seniority rights. The evidence is contradictory as to whether Rupe executed this second waiver voluntarily or whether a senior Spector employee told him that there would be no work for him if he did not sign.

Toward the end of 1978 Rupe applied to become a "regular" employee at Spector, with the attendant seniority rights. His application for seniority status was not only denied but he also received notice of his termination as a casual worker. After receiving notice of his discharge, Rupe asked the union president, James Hord, to intercede on his behalf. Hord telephoned Spector and was informed that Rupe had been discharged because he did not meet the company's "minimum requirements." When Rupe learned of Spector's response he asked Hord to file a grievance on his behalf. Proceeding upon the understanding that Spector was free to terminate casual employees such as Rupe without cause, Hord replied that he had done all he could to help Rupe and that it would do no good to file a grievance.

Rupe notified the National Labor Relations Board (NLRB) about his discharge and the union's refusal to file a grievance on his behalf and inquired as to how he might file formal charges with the NLRB against Spector and the union. After the NLRB notified Hord of Rupe's dissatisfaction Hord agreed to file Rupe's grievance against Spector.

Rupe met with Hord to prepare the grievance and gave his version of the events leading to his discharge. Hord made a transcription of Rupe's statement, asked Rupe to review it and make any changes necessary to reflect the facts accurately and then prepared and filed the grievance. Rupe never informed Hord about the circumstances surrounding his execution of the second waiver, nor did Hord question him about his execution thereof.

After filing the grievance Hord met with representatives of Spector to discuss Rupe's case. Hord was again informed that Rupe did not meet Spector's minimum requirements, but there was no revelation as to what these requirements were or what facts in Rupe's application caused his discharge. When Hord asked the company representatives why it had taken them over one and one-half years to decide that Rupe did not meet their minimum requirements, he was told that Rupe's application for employment was never processed until he applied for seniority status. Apart from this meeting with company officials and his earlier interview with Rupe, Hord made no further independent investigation into the facts surrounding Rupe's discharge.

Hord accompanied Rupe to the hearing before the grievance committee. Prior to the hearing Rupe had prepared a few notes which Hord read to the committee. After reading Rupe's statement Hord told the committee that he thought Rupe at least deserved a reason for being fired. The committee decided against Rupe, who thereafter instituted this action under § 301.

II.

EXHAUSTION OF INTRA-UNION REMEDIES

The local union's by-laws and the International Union's constitution provide for a complex system of intra-union procedures pursuant to which members may seek redress against union officers for violations of the union by-laws or constitution. The constitution mandates that members exhaust these intra-union remedies before seeking judicial relief against the union for breach of the duty of fair representation. Rupe failed to pursue these intra-union remedies with respect to his claim that the union failed to represent him fairly in the grievance proceeding. The directed verdict in favor of the union was predicated upon a determination that Rupe's failure to exhaust his intra-union remedies precluded him from suing the union under § 301.*fn2 The district court's ruling relied upon prior decisions of this court which have construed the exhaustion requirement rather expansively. See, e.g., Baldini v. Local 1095, UAW, 581 F.2d 145 (7th Cir. 1978).

After the district court entered judgment in this cause the Supreme Court considered the exhaustion requirement in Clayton v. UAW, 451 U.S. 679, 101 S. Ct. 2088, 68 L. Ed. 2d 538 (1981). The Court held that "where an internal union appeals procedure cannot result in reactivation of the employee's grievance or an award of the complete relief sought in his § 301 suit, exhaustion will not be required with respect to either the suit against the employer or the suit against the union." Id. at 685, 101 S. Ct. at 2093. See also Tinsley v. United Parcel Service, 665 F.2d 778 (7th Cir. 1981) (on remand from the Supreme Court for reconsideration in light of Clayton ). In Clayton, as in the instant case, the plaintiff sought reinstatement from his employer as well as monetary relief against both his employer and the union. The Court concluded that Clayton should not be required to exhaust his intra-union remedies since those remedies afforded no basis for reactivating his request for reinstatement and therefore would not afford relief as to all of his § 301 claims. Id., 451 U.S. at 696, 101 S. Ct. at 2099. In this case, as in Clayton, the union has not argued that Rupe could have been reinstated or that his grievance could have been reactivated if he had pursued his claim through the intra-union procedures. Under these circumstances, his failure to exhaust his intra-union remedies does not preclude him from suing the union and his employer under § 301.*fn3

III.

DUTY OF FAIR ...


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