The opinion of the court was delivered by: PLATT
Plaintiffs Dominick A. Palancia ("Palancia") and John A. Woods ("Woods") contend that their collective bargaining agent, defendant Local Union No. 457 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada ("Local 457"), violated § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1978) [L.M.R.A. § 301], when it allegedly failed to contest their discharge and thereby breached its duty to represent them fairly. Plaintiffs were fired on September 28, 1979 by defendant Roosevelt Raceway, Inc. ("Raceway"), their employer, because they had not bothered to secure a license that is required both by State law and by the terms of their collective bargaining agreement ("agreement"). Consequently, Messrs. Palancia and Woods filed suit seeking, respectively, reinstatement as journeyman plumber and foreman of the Raceway's Plumbing Department, as well as compensatory and punitive damages totaling $2.25 million and $2.5 million. Local 457 and defendants John Murray, its president, and Robert J. Friedberg ("Friedberg"), its business manager, now move for an order granting summary judgment. Fed.R.Civ.P. 56(b).
"Upon review of the entire record," these defendants have met their burden of demonstrating that "there is no genuine issue of material fact." Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444-45 (2d Cir. 1980); Karim v. United States Lines, Inc., 111 L.R.R.M. (BNA) 2496, 2496-97 (E.D.N.Y. Aug. 31, 1982); Fed.R.Civ.P. 56(c). Thus, summary judgment will be granted.
In approximately 1967, Messrs. Palancia and Woods obtained jobs as journeymen plumbers at the Raceway. A member of Local 457 for 30 years, Mr. Woods was promoted to foreman in 1971. Both he and Mr. Palancia were employed continuously by the Raceway from 1967 to 1979.
In September, 1979, the three-year agreement in effect between Local 457 and the Raceway required that, as a "continuing condition precedent" to their employment, all covered employees -- including the plaintiffs -- obtain a license pursuant to New York State Racing and Wagering Board regulations. N.Y. Admin. Code tit. 9, § 4101.24 (1981). Licenses were renewed annually.
Messrs. Palancia and Woods had knowledge of this requirement, for in each of the preceding 12 years they had applied for and received licenses. Woods Affidavit, paras. 3-5. Neither plaintiff claims that he possessed or had requested a valid license by September 26, 1982, the apparent date on which the Raceway's personnel manager and director of industrial relations, Walter E. Penny, learned that the plaintiffs had been working without licenses for more than nine months. Woods Affidavit, paras. 3, 6-7. As a result, Mr. Penny informed defendant Friedberg the next day that the Raceway had decided to discharge the plaintiffs. Woods Affidavit, para. 14. At first, Mr. Friedberg protested. But, after conferring with Murray Goldberg, Esq., Local 457's lawyer, he concluded that the union had no choice but to acquiesce in the Raceway's decision. Deposition of Robert J. Friedberg (March 4, 1981), at 12-16; Deposition of Walter E. Penny (March 4, 1981), at 24-25. Messrs. Palancia and Woods were fired on September 28, 1979. Local 457 did not file a grievance on their behalf.
Our starting point is Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903, 17 L. Ed. 2d 842 (1967), which sets forth a two-step test for determining whether a union or employer is liable under L.M.R.A. § 301. To establish liability, a plaintiff must show both that (1) the employer breached the collective bargaining agreement and that (2) the union's decision not to pursue the employee's grievance was "arbitrary, discriminatory or in bad faith." Id. at 190-92, 87 S. Ct. at 916-18. Clearly, failure to prevail on the first step obviates the need to consider the second. Thus we begin by deciding whether a breach occurred.
Messrs. Palancia and Woods contend that the Raceway violated its agreement with Local 457 by terminating them for failure to obtain a 1979 raceway license. Issued on an annual basis, these licenses are required by N.Y. Admin. Code tit. 9, § 4101.24 (1981), which states in part:
(a) No person shall participate in the affairs of any association or corporation licensed by the New York State Harness Racing Commission to conduct harness race meetings at which pari-mutuel betting is permitted as director, agent or employee of such track licensee, unless such person shall have received an occupational license from the commission.
(c) It shall be the responsibility of each track licensee to prevent any person not holding an occupational license from doing or performing any act or acts at its track.
Originally filed with the Secretary of State on September 5, 1974, this rule was promulgated under the authority of N.Y. Unconsol. Laws § 8010 (McKinney 1979 & Supp. 1981).
Article 14 of the collective bargaining agreement in effect at the time of plaintiffs' termination
tied the Wagering Board's requirements to employment at Roosevelt Raceway in the following language:
Each employee covered by this Agreement shall procure such license or permit as required by any such law, rule or regulation, and in the event any license fee is prescribed therefor, the same shall be paid for by each employee covered by this Agreement as a continuing condition precedent to such employment.
Local 457 maintains that this provision of the agreement, read in light of State regulations, requires the Raceway to discharge employees lacking the requisite license. Whether Article 14 imposes such an absolute duty on the employer is a matter that need not be decided. It will suffice to observe that the "condition precedent" language of this article gives the Raceway the power, at its discretion, to terminate unlicensed employees. Article 5 of the agreement explicitly reserves to management "the right to discharge, suspend and otherwise discipline any employee for just cause." Obviously, "just cause" includes failure to possess a license that the agreement and State regulations require each employee -- as part of his or her own responsibility -- to obtain. Equally as clear, the language quoted from Article 5 reserves to the Raceway the discretion to discharge unlicensed employees, or to discipline them by means of a lesser sanction. In areas traditionally considered the preserve of management, contract ambiguities should be resolved in the employer's favor. Hiring, firing, and discipline constitute one such area. N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45, 57 S. Ct. 615, 628, 81 L. Ed. 893 (1937). Cf., ...