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Flowers v. Local 2602 of United Steel Workers of America

UNITED STATES COURT OF APPEALS, SECOND CIRCUIT


decided: February 1, 1982.

DONALD C. FLOWERS AND KING E. JONES, APPELLANTS,
v.
LOCAL 2602 OF THE UNITED STEEL WORKERS OF AMERICA, AND UNITED STEEL WORKERS OF AMERICA, INTERNATIONAL, AND BETHLEHEM STEEL CORPORATION, APPELLEES .

After appellant employees were discharged by appellee employer, appellants filed grievances contesting their discharges and were represented by appellee union at arbitration hearings which resulted in decisions upholding the discharges. Eleven months later, appellants filed suit under section 301(a) of the Labor Management Relations Act in the United States District Court for the Western District of New York, John T. Elfvin, Judge. The district court granted judgment for the defendants on the ground that the actions were barred by New York's 90-day statute of limitations for actions to vacate arbitrations. This court reversed, holding that under Mitchell v. United Parcel Service, Inc., 624 F.2d 394 (2d Cir. 1980), New York's 6-year limitations period for breach-of-contracts claims applied. The Supreme Court vacated this court's judgment and remanded for reconsideration in light of United Parcel Service, Inc. v. Mitchell, 49 U.S.L.W. 4378 (U.S. Apr. 20, 1981). Judgment dismissing the complaint against Bethlehem Steel Corporation affirmed; judgment dismissing the complaint against Local 2602 of the United Steel Workers of America and United Steel Workers of America, International reversed.

Before Lumbard and Oakes, Circuit Judges.*fn*

Author: Oakes

On May 4, 1981 the Supreme Court vacated this court's judgment, made by summary order, in favor of appellants Flowers and Jones, and remanded this action for further consideration in light of United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S. Ct. 1559, 67 L. Ed. 2d 732 (1981).

Flowers and Jones, craft welders at the Bethlehem Steel Corporation, commenced this action against both their employer and their union under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, alleging that Bethlehem Steel breached its collective bargaining contract by wrongfully discharging the employees and that Local 2602 subsequently breached its duty of fair representation in an arbitration hearing. The complaint in this action was filed approximately eleven months after the employees, represented by the union, had lost in arbitration on the wrongful-discharge claim. The district court dismissed the complaint for failure to comply with New York's ninety-day statute of limitations for suits to vacate or modify an arbitration award. N.Y.Civ.Prac.Law § 7511(a) (McKinney). We reversed on the basis of the decision in Mitchell v. United Parcel Service, Inc., 624 F.2d 394 (2d Cir. 1980), which held on similar facts that the lower court should have applied New York's six-year limitations period for actions alleging breach of contract. N.Y.Civ.Prac.Law § 213(2) (McKinney).

The employer in Mitchell petitioned for review of the court of appeals' decision, although the union did not do so. The Supreme Court characterized the claim against the employer for wrongful discharge as in essence an action to set aside an arbitration award. Accordingly, the Court reversed and stated that the appropriate standard to apply was the ninety-day limitations period for actions to vacate an arbitration award. But as Justice Stevens emphasized in his opinion, concurring in part and dissenting in part, the Court's reasoning as to the claim against the employer did not necessarily determine which statute of limitations governed the employee's claim against the union for lack of fair representation. Thus, on remand in Flowers we must reverse under Mitchell as to the employer Bethlehem Steel Corporation and we hereby do so. But we still must resolve whether the broad language of Mitchell applies to the duty of fair representation claim as well as to the breach of contract claim. If we conclude that it does not, we must also determine which statute of limitations applies. We have read with interest the parties' briefs on these questions.

We believe Justice Stevens to be correct that the claim against the union for unfair representation may not be "characterized as an action to vacate an arbitration award." 451 U.S. at 73, 101 S. Ct. at 1569. If the employee prevails against the union, the arbitration award is unaffected since the arbitration "Joint Panel" did not address any dispute between the employee and the union. Moreover, the claim that the union breached its duty of fair representation, as Justice Stevens pointed out in his footnote 3,*fn1 could not be resolved in the arbitration proceeding because it arose out of the conduct of that proceeding itself. Conceptually, then, we agree that the claim against the union is not governed by the statute of limitations for actions to vacate arbitrations.

What makes the case difficult is that having Justice Stevens' opinion before it, the seven-person majority in Mitchell did not specifically limit the applicability of its decision to an employee's claim against his employer. The Court's reasoning arguably may require applying the same time limit to causes of action against the union since the Court found, quoting Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 570-71, 96 S. Ct. 1048, 1059, 47 L. Ed. 2d 231 (1976), that "to prevail against either the company or the Union, petitioners must not only show that their discharge was contrary to the contract but must also carry the burden of demonstrating breach of duty by the Union.... The grievance process cannot be expected to be error-free." See 451 U.S. at 62, 101 S. Ct. at 1563. This language suggests that the Court would apply to the unfair-representation claim the same ninety-day limitations period as it applied to the claim against the employer.

Other statements in the Mitchell opinion indicate, however, that a different statute of limitations applies to the claim against the union. The Court's observation that the unfair-representation claim is "more a creature of "labor law' as it has developed since the enactment of § 301 than it is of general contract law," coupled with references to International Union, UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 707, 86 S. Ct. 1107, 1114, 16 L. Ed. 2d 192 (1966), and to 29 U.S.C. § 160(b) (1976) (six-month period under NLRA), 451 U.S. at 62, 101 S. Ct. at 1563, suggest that the federal labor law statute should apply, as Justice Stewart's Mitchell concurrence indicated, id. at 63, 101 S. Ct. at 1564. At the same time, the Court observed that efforts to characterize Hines actions as actions for breach of contract, actions upon a statute, personal injury actions, or malpractice actions "all suffer from the same flaw ...: they overlook the fact that an arbitration award stands between the employee and any relief which may be awarded against the company," id. at 62 n.4, 101 S. Ct. at 1564 (emphasis added).*fn2 This language may be taken to imply agreement with Justice Stevens' view that claims against the union, which are not the subject of the prior arbitration, cannot be characterized as actions to vacate an arbitration award. On the other hand, this language may be interpreted as a refutation of Justice Stevens' view.

The question then becomes whether we are bound to follow the somewhat equivocal dicta expressed by a majority of the Court with reference to a matter which was not specifically before it, or whether we can follow what we think is the more persuasive reasoning expressed in a solitary dissenting opinion. We have struggled with this difficult question. Though we are pressed by the dicta of the majority, we are persuaded by Justice Stevens' analysis. Accordingly, we hold that the arbitration award statute of limitations does not apply.

The question remains whether to apply the three-year statute of limitations for malpractice actions, N.Y.Civ.Prac.Law § 214(6), or the six-month limitations period of section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b) (1976). We are persuaded by Justice Stevens' view*fn3 that section 10(b) is inapplicable both because it relates only to administrative procedures established by Congress to resolve unfair labor practices (see Justice Stewart's concurrence*fn4) and because it was adopted by Congress six years before the duty of fair representation was recognized. Indeed, not until Vaca v. Sipes, 386 U.S. 171, 17 L. Ed. 2d 842, 87 S. Ct. 903 (1967), did the Court clearly hold the duty judicially enforceable. On the other hand, an action for breach of the union's duty fairly to represent its members at arbitration proceedings is closely analogous to an action for attorney malpractice. See Mitchell, 451 U.S. at 61, 101 S. Ct. at 1563 ("Our present task is to determine which limitations period is the "most appropriate one provided by state law' "). We conclude, therefore, that the three-year nonmedical malpractice statute of limitations applies to the employees' action against the union for breach of its duty of fair representation. This would make the action against the union timely commenced.

Judgment dismissing the complaint against Bethlehem Steel Corporation affirmed; judgment dismissing the complaint against Local 2602 of the United Steel Workers of America and United Steel Workers of America, International reversed.


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