United Food and Commercial Workers International Union Local 911 v. United Food and Commercial Workers International Union

Citations: 301 F.3d 468; 170 L.R.R.M. (BNA) 2842; 2002 U.S. App. LEXIS 17343; 2002 WL 1926139Docket: 00-4544

Court: Court of Appeals for the Sixth Circuit; August 22, 2002; Federal Appellate Court

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United Food and Commercial Workers (UFCW) International Union Local 911 and its members appeal the dismissal of their complaint against the UFCW International Union and its officers for alleged violations of the Labor-Management Relations Act (LMRA) and the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The dispute arose after Local 911, representing about 12,000 workers in northwestern Ohio, faced challenges in negotiations with Meijer, a retail chain, after their collective bargaining agreement expired. 

After rejecting Meijer's final offer, Local 911 attempted to boycott, which was overruled by the International Union. Eventually, they ratified a new agreement with Meijer that was deemed an improvement over prior offers. Subsequently, the International Union assigned a new Meijer store in Bowling Green, Ohio, to a different local union, Local 1059, despite Local 911's jurisdictional claims. Local 911 appealed this decision under the UFCW Constitution, but the appeal was denied.

In November 1999, Local 911 filed a lawsuit alleging due process violations, infringement of free speech and assembly rights, and breach of the UFCW Constitution. A first amended complaint included a claim of breach of fiduciary duty. Local 911 sought declaratory judgments, injunctions, restoration of jurisdiction over the Bowling Green store, and damages exceeding one million dollars. The court affirmed part of the district court's decision regarding the LMRA claim but reversed part concerning the LMRDA claims, remanding for further proceedings.

On March 28, 2000, the International Union filed a motion to dismiss Local 911's complaint, citing improper venue and failure to state a claim. The district court granted the motion on October 31, 2000, leading to a timely appeal. The appellate court reviews the dismissal de novo, accepting all well-pleaded factual allegations as true while disregarding legal conclusions or unwarranted inferences. A dismissal is affirmed only if no set of facts consistent with the allegations would allow for relief.

The Labor-Management Reporting and Disclosure Act (LMRDA) was established to address abuses of power by union leadership and to protect union members' rights, particularly regarding freedom of expression without fear of sanctions, which could jeopardize their membership and livelihood. However, the LMRDA's protections, while significant, do not equate to constitutional protections. Under Section 101(a)(5) of the LMRDA, a union member cannot be fined, suspended, expelled, or disciplined without written specific charges, a reasonable time to prepare a defense, and a full hearing.

In "Breininger v. Sheet Metal Workers Int'l Ass'n," the Supreme Court clarified that "discipline" under the LMRDA refers specifically to actions taken by a union to enforce its rules and not to any actions that merely deter the exercise of protected rights. Local 911 claims that its members faced discipline when a union officer assigned the Meijer store in Bowling Green to Local 1059, alleging this decision was retaliatory due to Local 911's aggressive stance in negotiations for a collective bargaining agreement with Meijer regarding Toledo stores.

Local 911's wording is scrutinized concerning the Breininger Court's ruling that the LMRDA's specified disciplinary actions (fines, expulsion, suspension) indicate a formal disciplinary process rather than arbitrary retaliation from individual union officers. The Breininger Court clarified that discipline cannot be limited to traditional penalties and that unions cannot bypass LMRDA provisions by inventing new forms of punishment. The denial of jurisdiction is viewed as closer to ad hoc retaliation than authorized union punishment, justifying the district court's dismissal of Local 911's claim. Furthermore, Local 911's 101(a)(5) claim falters since the alleged punishment lacked a formal union disciplinary process, similar to a precedent where no official union discipline was imposed. Dority's actions against Local 911 were not disciplinary, as he did not impose fines, suspensions, or expulsions.

Regarding Section 101(a)(2) of the LMRDA, which ensures union members' rights to freely meet and express opinions, Local 911 contends that the International Union violated these rights by imposing unreasonable restrictions on boycotting and retaliating through punitive removal of jurisdiction. However, the claim is misunderstood; the LMRDA's intent was to enhance union democracy, allowing members to discuss policies and criticize leadership without fear of retaliation, particularly during election campaigns. Ultimately, Section 101(a)(2) supports the right to assemble and express views on union matters within a meeting context.

Title I of the Labor-Management Reporting and Disclosure Act (LMRDA) protects union members who criticize union leadership or seek office. In *Black v. Ryder/P.I.E. Nationwide, Inc.*, a Teamsters member successfully claimed retaliation after being disciplined for protesting union corruption. However, in the case involving Local 911, the allegations do not support claims of union democracy violations. The restrictions on protests were due to Local 911's failure to secure prior authorization as required by the UFCW Constitution, which was not shown to be unreasonable. The motivation for the proposed boycott was related to Meijer's employment practices rather than any union authorization issue. Local 911's assertion of a "chilling effect" on free speech lacks a strong connection to jurisdictional assignments. The UFCW Constitution grants significant discretion to the International President regarding jurisdiction, which Local 911 acknowledges. Consequently, the dismissal of Local 911's claim under Section 101(a)(2) was affirmed.

Section 501 of the LMRDA allows actions against union officials for breaching fiduciary duties, primarily to prevent self-dealing and misuse of union funds. The statute does not permit broad judicial oversight of union activities unless there is clear evidence of misconduct. Violations typically involve unreasonable actions affecting financial aspects, but can also pertain to nonfinancial violations that harm democratic rights. Local 911's first Section 501 claim alleges that Dority misused union funds by offering "lost dues" from a store without servicing obligations, intending to persuade Local 911 to accept a jurisdiction assignment that resulted in a less favorable contract for its members. However, the district court noted that there was no indication that any funds were actually transferred to Local 911.

Local 911's claims against Dority for misuse of union funds were dismissed by the district court, which is deemed correct. Local 911 contends that Dority's alleged "attempted payoff" contradicts the International Union's goal of enhancing member status; however, no injury to the International Union or its members was demonstrated as a result of Dority's actions. Local 911's allegations further suggest that Dority has compromised the International Union's autonomy by aligning too closely with Meijer, which allegedly influences union policy decisions. Specifically, Local 911 argues that Dority undermined its interests by assigning the Bowling Green store to Local 1059, which would negotiate less aggressively than Local 911. The key argument centers on Local 911's claim that it would have organized the Bowling Green employees and secured a better contract if not for Dority's actions, which are seen as violating fiduciary duty. Although the scenario appears improbable, it is the only basis for asserting a breach of duty. The dispute primarily involves differing strategic approaches to bargaining. However, the facts suggest that Dority acted unreasonably in denying Local 911 jurisdiction over the Bowling Green store, leading to the reversal of the district court's dismissal of the breach of fiduciary duty claim regarding this assignment.

Dority's action of sending a copy of the October 8 letter to Meijer did not infringe on Local 911's democratic rights, as it merely instructed Local 911 to seek authorization before taking economic action, without prohibiting future actions. The district court's dismissal of the breach of fiduciary duty claim regarding the letter is affirmed.

Under Section 301 of the Labor Management Relations Act (LMRA), Local 911 claims that Dority and the International Union breached the UFCW Constitution by assigning the Meijer store in Bowling Green to Local 1059 instead of Local 911, which Local 911 argues favored the employer. Courts typically defer to union officials' interpretations of their constitutions unless they are deemed unfair or unreasonable. The district court found that Dority's jurisdiction assignment was within reasonable bounds and not made in bad faith.

Local 911's claim cites violations of Articles 2, 23, and 31 of the UFCW Constitution, asserting that Dority's decision undermined the union's objectives of improving workers' conditions and bargaining power. Conversely, the International Union argues that assigning the jurisdiction to Local 1059 was justified to ensure better working conditions and representation for the workers involved.

The International Union asserts that assigning the Bowling Green store to Local 1059's jurisdiction supports the goals of organizing future employees and gaining exclusive bargaining representation. Local 911's claim, under Section 301 for breach of contract, involves the International Union and Local 911 as parties to the UFCW Constitution. The International Union argues that assigning the store to Local 911 would breach its duty to potential members, though this duty could also be seen as prospective. Local 911 contends that the International Union violated Article 2 of the UFCW Constitution by harming current members, independent of potential impacts on future members, making its breach of contract claim viable.

Article 23 outlines procedures for collective bargaining and requires prior authorization from the International Executive Committee for strikes or economic actions. Local 911 argues that Article 23 permits the International Union to refuse strike benefits but not to deny jurisdiction for lack of authorization, although this interpretation may be overly broad. The claim based on Article 23 fails since the prior ruling determined that the jurisdictional decision was not disciplinary.

Local 911 also alleges a violation of Article 31(A), which mandates that the International President consult with the International Secretary-Treasurer when determining local union jurisdictions. The focus has been on the discretion of the International President, but the requirement for consultation is crucial. Local 911 claims that the decision was made without such consultation, while Dority asserts that he did consult Hansen. Since Local 911's allegation is accepted as true at this stage, the district court's dismissal of this claim is reversed.

The court affirms some aspects of the district court's decision while reversing others, remanding the case for further proceedings.

The Honorable Charles R. Simpson III presides over the case related to Local 911 and its claims against the International Union, referencing the Turner v. Air Transport Lodge decision, which affirms the strong free speech rights of union members, though it acknowledges limitations for reasonable rules. Local 911 alleges financial improprieties by the International Union but focuses its appeal solely on claims against Dority, as the dismissal of the claim against Region 4 is not contested. A letter from a Meijer executive indicated that the company preferred to work with another local union, which may have influenced Dority's decisions regarding union representation at the Bowling Green store. There were potential avenues for union recognition, either through an NLRB election or card check recognition, but Dority believed recognition for Local 911 was unlikely. Gelios argues that Meijer is withholding recognition to negotiate for benefits. The dissent suggests that Local 911's issues pertain to jurisdiction rather than rights, but Local 911 contends that Meijer’s influence undermined its democratic representation. The court accepts Local 911's allegations as true at this stage and must determine if relief can be granted based on whether Dority's jurisdiction assignment to Local 1059 was unreasonable or improper, remanding the case for further proceedings.

Charles R. Simpson, III, District Judge, expresses partial concurrence and dissent regarding the majority opinion, specifically opposing Section II.A.3. He cites the case of Corea v. Welo, emphasizing that the primary aim of 29 U.S.C. 501(a) is to prevent union officials from breaching their fiduciary duties through self-dealing or misuse of funds, rather than to serve as a judicial oversight mechanism for union activities. Simpson clarifies that federal courts should not act as a 'super review' board for internal union disputes unless there is evidence of misconduct. The current case involves a jurisdictional conflict between Local 911 and its national organization concerning representation rights at a Meijer store in Bowling Green, Ohio, which he characterizes as an economic issue rather than a significant loss of democratic rights necessary for a 501 action. He critiques the majority's reversal of the 501 claim as requiring the district court to engage in unnecessary review of Local 911's jurisdiction, which contradicts established Sixth Circuit precedent. Consequently, he advocates for affirming the district court's dismissal of the 501 claim.