Dunn v. Dubuque Glass Co.

Citations: 870 F. Supp. 2d 654; 2012 U.S. Dist. LEXIS 60822; 2012 WL 1564700Docket: No. 11-CV-1001-LRR

Court: District Court, N.D. Iowa; May 1, 2012; Federal District Court

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The court addresses two motions for summary judgment: one from the International Union of Painters and Allied Trades District Council 81 and Glaziers Local Union No. 581, and another from Dubuque Glass Company, Inc. Plaintiffs Charles D. Dunn and Peter M. Hurm allege that Dubuque Glass failed to pay agreed-upon sector and overtime wages, violating the Fair Labor Standards Act (FLSA) and the Iowa Wage Payment Collection Law (IWPCL). They also claim the Union breached its duty of fair representation under the Labor Management Relations Act (LMRA) and that Dubuque Glass violated Iowa law by not providing employment records. 

The procedural history reveals that the case originated in Iowa District Court but was removed to federal court due to federal question jurisdiction. The court confirms its jurisdiction over Counts I and III based on federal law while maintaining supplemental jurisdiction over the state law claims in Counts II and IV, as they share a common factual basis with the federal claims. The motions are fully submitted and await a decision.

Summary judgment is warranted when the moving party demonstrates there is no genuine dispute regarding any material fact and is entitled to judgment as a matter of law, as per Federal Rule of Civil Procedure 56(a). A genuine dispute exists if reasonable evidence could lead a jury to a different verdict, while a material fact influences the case's outcome. Self-serving claims do not create a genuine issue of material fact. The non-moving party must provide sufficient evidence to support its claims beyond mere speculation. Courts review the evidence favorably for the non-moving party, granting it all reasonable inferences.

In the relevant factual background, the uncontested material facts indicate that Dunn, a citizen of Iowa, worked as a journeyman glazier for Dubuque Glass from August 27, 2007, to April 6, 2010, and was a union member. Hurm, also a citizen of Iowa, was employed as a journeyman glazier for Dubuque Glass from August 2009 to April 13, 2010, and was likewise a union member. Dubuque Glass is identified as an Iowa corporation located in Dubuque County, Iowa, and the Union is a local affiliate of a labor organization under 29 U.S.C. § 185(a).

The Plaintiffs’ employment terms were governed by a collective bargaining agreement (Agreement) between Dubuque Glass and the Union. Dunn and Hurm received copies of the Agreement, which specified hourly wage rates for different geographic sectors and mandated overtime pay at one and a half times the regular rate for hours exceeding eight per day or forty per week. The Agreement included a grievance procedure for disputes, requiring informal discussions within ten days of an issue and a written grievance within ten days if unresolved. If still unsettled, the grievance could be referred to arbitration within thirty days of the employer's response. Timely presentation of grievances was essential, as delays could waive the right to contest them.

Dunn raised concerns about insufficient wages for his work in various sectors and believed he was underpaid. He communicated these concerns to Dubuque Glass representatives and his Union agent, but did not receive follow-up or resolution. After receiving a paycheck in November 2009 that he believed omitted overtime wages, Dunn again contacted the Union agent, who assured him the matter would be investigated. However, Dunn eventually felt unsupported and did not pursue further action. He never requested the Union to file a grievance on his behalf regarding his sector or overtime pay, nor did the Union initiate any grievance without a named grievant. Dunn did not file a grievance with Dubuque Glass during his employment concerning these pay issues.

Hurm believed that his paychecks from Dubuque Glass in 2009 and 2010 did not fully account for his overtime hours and applicable geographic sector wages. Despite multiple attempts to contact Grafton about his overtime concerns, Hurm never managed to reach him or leave a message. At the end of 2009, Hurm suspected he was underpaid for work in sectors outside his own but did not formally raise this issue with Grafton, assuming Dunn was handling it. Hurm would have filed a grievance if he had known Dunn hadn’t done so. Throughout his employment, Hurm did not request the Union to file a grievance, nor did the Union file one on his behalf. Hurm also did not file any grievances regarding his sector pay or overtime pay. Employees received detailed paychecks that indicated hourly rates and earnings, making them aware of potential underpayment.

After Hurm was laid off in April 2010, Dunn sought Hurm’s employment records from Dubuque Glass but was denied. In May 2010, Plaintiffs contacted Grafton for records, leading to Dunn asking Grafton about hiring a lawyer, who advised that it would be prudent. On July 7, 2010, attorney Jason Lehman requested wage and benefit breakdowns from Grafton, who complied. On September 2, 2010, attorney Erik Fisk inquired if the Union could assist with claims against Dubuque Glass, but Grafton stated that the Union could not help as the grievance was untimely. Fisk sent a letter the following day asking Grafton to reconsider and also requested personnel records under Iowa law. Dubuque Glass did not provide these records until the current litigation.

Regarding legal claims, Plaintiffs assert that Dubuque Glass's failure to pay the correct sector rate violated the Fair Labor Standards Act (FLSA). While unpaid overtime claims are valid under the FLSA, claims for incorrect sector wage compensation are not. Plaintiffs must demonstrate that they engaged in compensable activity for wages below the statutory minimum to establish a minimum wage violation. Since the sector rates of $23.67 and $21.28 per hour exceed the minimum wage of $7.25, even if Dubuque Glass paid the lower sector wage, it would not constitute an FLSA violation. Consequently, Plaintiffs have not stated a valid claim for sector wages under the FLSA.

Plaintiffs' sector wage claims arise under the Labor Management Relations Act (LMRA) §301, 29 U.S.C. 185, alleging a breach of hourly wage terms specified in their Agreement. The LMRA allows federal actions for violations of contracts between employers and labor organizations in commerce. Plaintiffs assert that the Union breached its duty of fair representation under the LMRA. The court has determined that these claims are appropriately classified as §301 claims for breach of the Agreement, referencing case law that emphasizes the distinction between claims under the LMRA and the Fair Labor Standards Act (FLSA), which is intended for individual workers' protections rather than collective bargaining disputes. The court noted that Plaintiffs' claims do not involve minimum wage standards under the FLSA, thus categorizing them under the LMRA.

In response to the Union's motion, which asserts that it did not breach its duty of fair representation and that the claim is barred by the statute of limitations for hybrid actions, Plaintiffs contend they adequately exhausted the Union's grievance procedure and argue that further attempts would have been futile. However, they did not address the Union's statute of limitations argument.

The statute of limitations for a hybrid claim against an employer for violating LMRA §301 and against a union for breaching the duty of fair representation is six months, as established in DelCostello v. Int’l Bhd. of Teamsters. A hybrid claim arises when an employee has a cause of action against both entities, with the claims being interdependent. The limitations period begins when a claimant knows, or should know, of the alleged violation, as clarified in Alcorn v. Burlington N. R.R. Co. 

Plaintiffs’ sector wages claims are categorized as LMRA §301 claims, requiring proof that the employer violated the collective-bargaining agreement and that the union failed in its duty of fair representation. As such, to recover, Plaintiffs must show that Dubuque Glass breached the agreement and that the Union did not adequately represent them. 

Dunn first raised concerns about wage discrepancies in November 2009, and by the end of that year, he was aware that the Union would not assist him further. Similarly, Hurm became aware of paycheck issues in late 2009 and had no contact with the Union for approximately three months before his employment ended in April 2010. The Plaintiffs filed their Complaint on December 21, 2010. For their claims to be timely, they must have accrued after June 21, 2010. However, both Dunn and Hurm were aware of the Union's inaction regarding their grievances well before this date, indicating that their claims against the Union for breach of the duty of fair representation are time-barred by the six-month statute of limitations.

Plaintiffs' overtime wage claims against the Union are not constrained by the six-month statute of limitations but rather the two-year FLSA statute, making them timely since they filed the Complaint on December 21, 2010, and claims accrued in late 2009. However, the merits of these claims for breach of the duty of fair representation do not succeed. A union must fairly represent all workers under a collective bargaining agreement, with a breach occurring only if the union's actions are arbitrary, discriminatory, or made in bad faith. Mere negligence or poor judgment is insufficient for a breach claim. 

The Union's conduct, represented by agent Grafton, did not demonstrate irrationality or bad faith; he communicated with Dunn about investigating wage concerns but did not receive any requests for grievances until after the filing period had expired. Grafton cited the Agreement's ten-day grievance requirement when declining to assist after a letter from Plaintiffs’ attorney. No evidence of fraud or deceit was presented, and while Grafton’s initial lack of follow-up could be seen as negligence, it does not rise to the level of a breach. Consequently, the court will grant the Union's motion and dismiss Count III of the Complaint.

Dubuque Glass seeks summary judgment on multiple grounds, including that Plaintiffs did not exhaust administrative remedies, their state law claims are preempted by federal law, and they cannot demonstrate any violation of the Fair Labor Standards Act (FLSA) or the Labor Management Relations Act (LMRA). Additionally, Dubuque Glass requests judgment on its Counterclaim against the Plaintiffs. In contrast, Plaintiffs maintain that their FLSA claims for overtime wages are not preempted and they have valid claims for unpaid sector wages. They argue that any grievance would have been futile, they have a valid claim under Iowa law for failure to provide employee records, and Dubuque Glass failed to support its Counterclaim with facts or legal authority.

The court will evaluate the arguments related to each count of Plaintiffs' Complaint. In Count I, Plaintiffs allege violations of the FLSA for unpaid sector and overtime wages. Dubuque Glass contends that the grievance procedure outlined in the Agreement governs these claims and that any grievance filed by the Plaintiffs is now untimely. The court treats the sector wage claims as LMRA claims for breach of the Agreement, which are subject to a six-month statute of limitations per the DelCostello ruling. Consequently, the court will grant Dubuque Glass's motion to dismiss the sector wage claims under Count I. However, the court recognizes that Plaintiffs' claims for overtime wages are properly brought under the FLSA, which mandates compensation at a rate of at least one and a half times the regular rate for hours worked beyond forty in a week. The court notes that while arbitral decisions generally take precedence in claims rooted in collective-bargaining agreements, statutory rights under the FLSA may impose different considerations.

FLSA rights cannot be waived or contracted away, as this would undermine the statute's intent and legislative goals. Plaintiffs assert their right to overtime wages under the FLSA, independent of any contractual agreement, and contest that they did not receive appropriate overtime pay for hours worked beyond the standard forty-hour week. They present evidence, including time sheets, to support their claim of unpaid overtime, establishing a genuine issue of material fact. Consequently, the court will not dismiss Plaintiffs' FLSA overtime wage claims as they are not barred by the statute of limitations.

In Count II, Plaintiffs allege violations of the Iowa Wage Payment Collection Law (IWPCL) by Dubuque Glass for failing to pay overtime and sector wages. Dubuque Glass contends that these state law claims are preempted by federal law and that Plaintiffs cannot demonstrate any violation or harm. Plaintiffs counter that their IWPCL claims are based on rights separate from the Agreement and do not necessitate its interpretation. They further argue that if preemption were applicable, pursuing a grievance would have been futile or the failure to follow the grievance procedure would be excused. 

The IWPCL mandates that employers pay all wages due. The Labor Management Relations Act (LMRA) asserts that federal labor law governs disputes involving labor contracts, which preempts conflicting local laws. To evaluate whether §301 preemption applies, the court examines the claim itself using a two-step approach: first, determining if the state-law claim is based on a provision of the collective bargaining agreement, and second, assessing whether the claim requires interpretation of that agreement.

Plaintiffs argue that their rights under the Iowa Wage Payment Collection Law (IWPCL) are independent of the collective bargaining agreement, asserting that their claims for sector wages are not preempted by federal law since the agreement is only referenced to determine damages. In Dyke v. Hormel Foods, the court ruled that IWPCL claims for unpaid wages were not preempted as they could be resolved without interpreting the collective bargaining agreement. However, Dubuque Glass contends that the agreement establishes the right to sector wages, thereby satisfying both prongs of the preemption test.

The court distinguishes the present case from Dyke, noting that Plaintiffs are not claiming unpaid hours but rather assert that they were not paid the correct geographic sector amounts as outlined in the agreement. Consequently, the right to these sector wages is defined by the agreement, fulfilling the first prong of the preemption test. Additionally, determining entitlement to specific sector wages necessitates interpreting the agreement’s provisions, thus satisfying the second prong of the preemption test. As a result, Plaintiffs’ IWPCL sector wages claims are preempted by the Labor Management Relations Act (LMRA), leading to the dismissal of these claims.

In contrast, Plaintiffs’ claims for overtime wages are found to be independent of the collective bargaining agreement. The court determines that these claims do not require interpretation of the agreement, as it is only relevant for damages. Therefore, the LMRA preemption does not apply to the overtime wage claims. A genuine issue of material fact exists regarding whether Plaintiffs received appropriate overtime compensation, resulting in the denial of Dubuque Glass's motion to dismiss these claims.

Count IV asserts that Dubuque Glass violated Iowa Code sections 91A.6 and 91B.1 by not providing Plaintiffs access to their personnel files. Plaintiffs claim the obligation to furnish these records continues post-termination, while Defendants argue that Plaintiffs were no longer "employees" as defined by Iowa law at the time of their request, thus negating any duty to provide the records. Iowa Code section 91B.1 grants employees access to their personnel files, and section 91A.2 defines an employee as a natural person employed for wages. Section 91A.6 requires employers to provide a written statement of earnings and deductions within ten working days of a request by an employee. Plaintiffs cite section 91A.14, which establishes that rights and obligations persist after the employer-employee relationship ends, and argue this applies to section 91B.1.

The court references Muller v. Hotsy Corp., where it concluded that the plaintiff was not considered an "employee" when he requested his personnel file, leading to the determination that the statute did not apply. The Muller court also found the issue moot since the employer provided the files through discovery without causing damages to the employee. The current court agrees with Muller’s reasoning, stating that since Plaintiffs were not employees at the time of their request, Dubuque Glass had no obligation to provide the records. Additionally, as the records were later supplied through discovery and no damages occurred from the initial refusal, the matter is deemed moot. Consequently, the court will grant Dubuque Glass's motion to dismiss Count IV.

In relation to Dubuque Glass's Counterclaim, the company seeks relief as stated in its motion. Plaintiffs argue that Dubuque Glass has not provided sufficient facts or legal authority to warrant summary judgment on the Counterclaim, leading to its denial. Since Dubuque Glass failed to demonstrate entitlement to summary judgment, the court denies its motion in this regard.

1. The Union Motion for Summary Judgment is granted, resulting in the dismissal of Plaintiffs’ claims related to the Union’s duty of fair representation (Count III).

2. The Dubuque Glass Motion is granted in part and denied in part. Plaintiffs’ sector wages claims in Counts I and II, as well as their claims for employment records (Count IV), are dismissed. However, Plaintiffs’ overtime wages claims in Counts I and II will proceed to trial.

3. The Dubuque Glass Counterclaim also survives summary judgment and will go to trial. 

4. The court analyzes the identical legal claims across individual Counts I through IV together. 

5. The issue of unpaid travel time is not addressed, as it was not alleged in the Complaint.

6. Even if considered as FLSA claims, the six-month statute of limitations would apply, as established in Martin v. Lake Cnty. Sewer Co. Inc. 

7. Plaintiffs' exhaustion arguments are deemed irrelevant to the statute of limitations and merits of the case, and their claims fail regardless of any exhaustion of contractual remedies due to the Union's refusal to pursue an untimely grievance. 

8. The court does not address Plaintiffs’ exhaustion defenses as they do not pertain to the controlling issues surrounding Count II.