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Knox v. Chicago Transit Authority

Court of Appeals of Illinois, First District, Fourth Division

April 26, 2018

JAMES KNOX, Plaintiff-Appellant,
v.
CHICAGO TRANSIT AUTHORITY, Defendant-Appellee. CHICAGO TRANSIT AUTHORITY, Third-Party Plaintiff,
v.
AMALGATED TRANSIT UNION LOCAL 1241, Third-Party Defendant-Appellee.

          Appeal from the Circuit Court of Cook County No. 14 CH 6475 Honorable Diane J. Larsen Judge Presiding

          JUSTICE McBRIDE delivered the judgment of the court, with opinion. Presiding Justice Burke and Justice Gordon concurred in the judgment and opinion.

          OPINION

          McBRIDE, JUSTICE

         ¶ 1 Plaintiff, James Knox, appeals the circuit court's dismissal of his complaint seeking relief in the form of back pay and benefits related to the reinstatement of his employment at the Chicago Transit Authority (CTA). The trial court dismissed plaintiff's amended complaint, finding that it lacked subject matter jurisdiction over the matter. In this court, plaintiff argues that the dismissal was improper.

         ¶ 2 The record shows that plaintiff was a member of Amalgated Transit Union Local 1241 (Union) and employed by the CTA. Plaintiff was terminated on January 24, 2013, and grieved his termination pursuant to his collective bargaining agreement, which provided that disputes concerning the discharge of a Union employee were to be submitted to arbitration. Before the arbitrator, the CTA maintained that plaintiff had violated a Last Chance Agreement by engaging in misconduct on November 29, 2012, specifically, that he had failed to comply with work orders and falsely represented what he had been doing that day in verbal and written reports. On July 22, 2013, after hearing the evidence related to the alleged misconduct, the arbitrator found that the evidence established plaintiff's misconduct and that the CTA had "good cause for their finding that [plaintiff] had violated the last Chance Agreement." Specifically, the arbitrator noted that plaintiff testified that he began his shift at 2 p.m., and the evidence established that he had not performed the required inventory counts that he had been directed to perform as of 3:30 p.m., when his supervisor arrived and found that the inventory forms were blank and that plaintiff "was wearing gym shoes."

         ¶ 3 Although plaintiff claimed that he had been talking to a coworker for an hour and fifteen minutes, the arbitrator found that the timeline of plaintiff's version of events was inconsistent and concluded that plaintiff had "falsely represented in both verbal and written reports" what he had been doing that afternoon. The arbitrator noted, however, that plaintiff "had been retained on the payroll until January 24[, ] 2013 without having been given any prior indication that he would be disciplined for the November 2012 misconduct." Due to the delay, the arbitrator concluded that plaintiff "was treated arbitrarily, without due process and [wa]s entitled to be offered reinstatement." However, "[c]onsidering his offense, " the arbitrator found that plaintiff was "not entitled to back pay or benefits." (Emphasis omitted.)

         ¶ 4 Following the arbitrator's decision, plaintiff filed a complaint for declaratory judgment and other relief against the CTA in the circuit court on April 15, 2014, seeking an award of back pay and benefits. He alleged that the denial of back pay and benefits violated section 12.6 of the Collective Bargaining Agreement, which provided that, "[a]ny Employee, who, upon investigation, is found to have been discharged or suspended unjustly shall be reinstated and reimbursed for all time lost for such discharge or suspension." Plaintiff sought "a declaration by the Court finding that pursuant to Section 12.6 of the Collective Bargaining Agreement, [p]laintiff is entitled to back pay and benefits." Plaintiff also argued that the collective bargaining agreement "constituted a bi[n]ding and enforceable contract between [p]laintiff and [the CTA]" and that the CTA breached that contract. Plaintiff sought damages equal to his "loss of salary, reimbursement of health insurance costs and reimbursement for moving expenses" as well as "reasonable attorney[ ] fees."

         ¶ 5 The CTA filed a motion to dismiss on June 13, 2014. In that Motion, the CTA contended that plaintiff failed to allege a violation of the collective bargaining agreement, where the CTA and the Union had agreed to final and binding arbitration, and there were no allegations that the CTA had not complied with the arbitration award. The CTA also argued that plaintiff's request for declaratory relief should be dismissed because it "hinges on *** [his] breach of contract claim, and does not allege any independent legal interest to state a claim for declaratory relief." The CTA further argued that plaintiff lacked standing to challenge a breach of the collective bargaining agreement because he is not a party to the agreement and because "Illinois law specifically prohibits individual employees from bringing a suit to overturn the outcome of a grievance procedure or arbitration under a collective bargaining agreement absent exceptional circumstances."

         ¶ 6 Plaintiff filed a response to the CTA's motion to dismiss on August 14, 2014. Plaintiff acknowledged that "it appears to be true, that under most circumstances an individual, unionized employee lacks standing to challenge an arbitration award, which was made pursuant to a [collective bargaining agreement.]" However, plaintiff contended that his case fit into an "exception to th[at] rule" because "the U.S. Supreme Court has found that an employee does in fact have standing to challenge an arbitration decision, where it can be shown that the employee's union failed to fairly represent the employee-thereby leaving the employee with no other recourse other [sic] than to seek relief at the trial level" (citing Vaca v. Sipes, 386 U.S. 171 (1967)). Plaintiff further argued that the Illinois Supreme Court "adopted this reasoning ***, specifically finding that a union employee does have standing to challenge an arbitration decision, where it can be shown that the employees [sic] union did not provide fair and adequate representation during the grievance procedure and arbitration" (citing Stahulak v. City of Chicago, 184 Ill.2d 176 (1998)). Plaintiff contended that his union did not provide him fair representation, and, accordingly, he had standing "to independently challenge [the CTA's] breach of the [collective bargaining agreement]."

         ¶ 7 On October 8, 2014, the trial court struck plaintiff's complaint "for failure to plead allegations raised in Plaintiff's Response to [the CTA]'s Motion to Dismiss, " and granted plaintiff time to file an amended complaint to add those allegations. Plaintiff filed his amended complaint on November 12, 2014, which raised additional allegations regarding the Union's duty of fair representation. Specifically, in the amended complaint, plaintiff alleged that, "despite [p]laintiff's insistence, *** the Union attorney did not bring up the issue of back pay and benefits" during the arbitration hearing. After receiving the decision, plaintiff "informed his Union rep that he wanted the Union to challenge the decision to deny his back-pay and benefits" but "the Union rep informed [p]laintiff that he had no other recourse than to seek outside counsel and that the Union would be taking no further action." Plaintiff further argued that the "failure of the Union to raise the issue of back-pay and benefits at the arbitration hearing and its subsequent refusal to challenge the decision to deny back-pay and benefits, constituted a breach of the Union's duty of fair representation to [p]laintiff."

         ¶ 8 In December 2014, the CTA filed a motion to dismiss plaintiff's amended complaint. In that motion, the CTA contended that plaintiff's claims were barred by collateral estoppel and res judicata because they had been previously litigated to final judgment through the grievance arbitration process. The CTA continued to argue that plaintiff lacked standing to challenge a breach of the collective bargaining agreement, and that the court lacked subject matter jurisdiction over any claim that plaintiff's union breached its duty of fair representation because it is "settled Illinois law that the Illinois Labor Relations Board and not the circuit courts hear such claims" (citing Cessna v. City of Danville, 296 Ill.App.3d 156, 165-66 (1998)). The CTA also contended that plaintiff failed to allege a violation of the collective bargaining agreement where the CTA and the Union had agreed to final and binding arbitration, and there was no allegation that the CTA has not complied with the arbitration award.

         ¶ 9 Plaintiff filed a response to the CTA's motion to dismiss the amended complaint on February 5, 2015. Plaintiff continued to acknowledge that "[u]nder some circumstances an individual, unionized employee may lack standing to challenge an arbitration award, which was made pursuant to a [collective bargaining agreement]" but argued that he had standing "to independently challenge [the CTA's] breach of the [collective bargaining agreement]" based on his allegation that the union did not provide him fair representation.

         ¶ 10 Following briefing, the circuit court held a hearing on the CTA's motion to dismiss on April 3, 2015. The court heard argument from the parties and denied the CTA's motion. The court found that "the amended complaint contained sufficient factual allegations to plead that the union breached its duty of fair representation." On May 1, 2015, the CTA filed a motion for reconsideration, which was denied on August 20, 2015.

         ¶ 11 Thereafter, on September 21, 2015, the CTA filed a "Third-Party Complaint for Implied Indemnification" against the Union, arguing that "[i]f, as the Complaint alleges, [the Union] breached its duty of fair representation to Plaintiff ***, then some or all of Plaintiff's purported damages were caused by [the Union]'s breach of its duty of fair representation." The CTA argued that, if damages were awarded, the Union would be "liable to CTA for any damages that flow from its breach of its duty of fair representation to Plaintiff." The CTA contended that, "pursuant to 735 ILCS 5/2-406, a complete ...


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