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GOLD v. LOCAL UNION NO. 888

March 12, 1991

LEONARD GOLD, PLAINTIFF,
v.
LOCAL UNION NO. 888, U.F.C.W., A.F. L.-C.I.O., UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, AFL-CIO AND CLC, AND JOHN HANCOCK, MUTUAL LIFE INSURANCE COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Kimba M. Wood, District Judge.

Defendant, John Hancock Mutual Life Insurance Company ("the Company"), moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure on plaintiff's claim that the union breached its duty of fair representation.*fn1 The United Food and Commercial Workers International Union, and Local Union No. 888, UFCW-AFL-CIO (collectively "the union") move to dismiss the Company's cross-claim.

Facts

The facts underlying this motion are undisputed, except where noted. The Company discharged plaintiff, Leonard Gold, an employee for 29 years, because of accusations that Gold had stolen money from an elderly policyholder. The Company first learned of these allegations on March 4, 1986 when a Mr. Frankel, plaintiff's superior and a district manager for the Company, received a phone call from Christine Abate, asking if Frankel would meet with her to discuss a complaint she had about the way plaintiff Gold handled policies for a friend of hers, Mrs. Carolyn Bush. Several days later, Frankel met with Abate and Bush. At the meeting, Abate claimed that even though Bush's premiums amounted to only $39.64 per month, Gold came over to Bush's house each month and had her sign over her entire $70 pension check. According to Abate's allegations, Gold gave Bush neither change nor a receipt for the transaction. When questioned by Frankel, Bush confirmed these allegations.

Later that day, Frankel informed Gold of the allegations, but did not meet with him. Gold then went to speak with Bush. Abate was not present. While Gold was in her house, Bush called Frankel and told him that Gold was innocent of any wrongdoing, and that everything was fine between her and Gold. Gold returned to the office late that afternoon and told Frankel that he was innocent, and that the problem with Bush could be attributed to her senility. Gold also gave Frankel a note allegedly signed by Bush exonerating Gold.

The next day, Frankel spoke again with Bush's friend, Abate, who told Frankel that when plaintiff visited Bush on March 6, 1986, he told her that there had been a mistake with her account and gave her $360 in cash. Abate also maintained that Bush gave Gold the note exonerating him. only after he told her that unless she did so he would go to jail. One week later, the Company received at its Boston headquarters a letter signed by Bush (although not drafted by her) repeating Abate's allegations that Gold had taken Bush's entire pension check every month without giving her change or receipts and adding the allegations regarding Gold's visit and his payment to her of $360. Soon thereafter, the Company suspended Gold with pay, pending the outcome of an investigation.

After completing his investigation, Frankel wrote to Edward Ciavolino, a Company vice-president, summarizing the allegations against Gold and his findings. In this letter, Frankel stated that Gold had admitted to him that he had given Bush some money (Gold denies making this admission), but that Gold had declined to indicate how much money he gave to Bush. Ciavolino asked the Company's Department of Special Activities to conduct its own investigation into the allegations made by Abate and Bush. During the course of his investigation, the Company investigator spoke with Bush, Abate, Gold, and Frankel. His report credited Bush and Abate's allegations, even though the investigator noted that Gold consistently maintained his innocence. Following receipt of the investigator's report, the Company decided to terminate Gold's employment. Frankel informed Gold of the Company's decision, telling him it simply did not believe his claim of innocence.

On April 30, the union formally submitted a grievance on Gold's behalf. The Local Union represented Gold through the first three steps of the grievance process, at which it was unsuccessful in persuading the Company to reverse its earlier decision to terminate Gold's employment. At the fourth step meeting (the last before arbitration), Andre Henault of the International Union took over the task of representing Gold. In preparing for the fourth step meeting, Henault reviewed a report of the third step meeting prepared by a union official familiar with Gold's case, but did not speak with that official, nor did he speak with anyone else involved in the case. After the meeting, Company officials again denied Gold's grievance, and the union filed a notice of intent to submit Gold's grievance to arbitration.

Sometime after the first fourth step meeting, Henault learned of a settlement offer made by the Company. He asked that the Company convene another fourth step meeting to discuss Gold's case, and that this time the discussions include the settlement offer. The second fourth step meeting took place nearly ten months after the first. At that meeting, Company officials again refused to overturn the termination decision, and told union officials that any settlement offer that may have been extended had been withdrawn. Henault did not take part in the discussion of Gold's case at this meeting, however, because Henault arrived after the participants had already moved on to other matters on the agenda for that day.

Following this second fourth step meeting, the union took another look at Gold's case and withdrew its previously filed notice of intent to arbitrate. In November of 1987, plaintiff filed this action.

I. Motion of Defendant John Hancock for Summary Judgment

Plaintiff alleges that the Company breached the collective bargaining agreement by terminating plaintiff's employment without good cause and that the union's failure to adequately investigate Gold's grievance and take it to arbitration constitutes a breach of the duty of fair representation. Plaintiff has standing to bring such an action against the Company based on a breach of the collective bargaining agreement only if the union has breached its fair duty of representation. Vaca v. Sipes, 386 U.S. 171, 186, 87 S.Ct. 903, 914, 17 L.Ed.2d 842 (1967). The Supreme Court has made clear that as part of this duty a union "may not arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion." Id. at 191, 87 S.Ct. at 917. Yet, a union member has no absolute right to have his or her grievance taken to arbitration. Id. In Barr v. United Parcel Service, Inc., 868 F.2d 36, 43 (2d Cir.), cert. denied, ___ U.S. ___, 110 S.Ct. 499, 107 L.Ed.2d 502 (1989), the Second Circuit recently set forth a two part test for duty of fair representation claims: "The union's conduct must, first, have been `arbitrary, discriminatory or in bad faith,' and second, it must have `seriously undermined the arbitral process.' [citations omitted]." Several courts have held that the failure to fairly and adequately pursue an investigation of a grievance may satisfy this test and constitute a breach of the duty of fair representation, for this failure may undermine the integrity of the arbitral process. See Hines v. Anchor Motor Freight. Inc., 424 U.S. 554, 567, 96 S.Ct. 1048, 1057, 47 L.Ed.2d 231 (1976); Tenorio v. NLRB, 680 F.2d 598, 601 (9th Cir. 1982); Lapir v. Maimonides Medical Center, 750 F. Supp. 1171 (E.D.N.Y. 1990). In addition, several decisions in this circuit have fleshed out the meaning of the term "arbitrary" as used in Barr and the decisions upon which it relied. Thus, the Second Circuit stated that evidence of "an irrational decision" by the union may be sufficient to constitute a breach of its duty even in the absence of bad faith. The court held that "bad faith or hostile discrimination, is certainly a sufficient condition to evidence an irrational decision, but it is not a necessary condition. It is also sufficient that a distinction be arbitrary or not based on some rational consideration." Jones v. Trans World Airlines, Inc., 495 F.2d 790, 798 (2d Cir. 1974); Caputo v. National Ass'n. of Letter Carriers, 730 F. Supp. 1221 (E.D.N Y 1990).

Defendants argue that plaintiff cannot meet the burden imposed on him by the law, stating that he "is incapable of establishing that, in processing his grievance and deciding not to take it to arbitration, the Union acted in an arbitrary manner or in bad faith." Defendants' Memorandum of Law in Support of Joint Motion for Summary Judgment ("Def. Mem.") at 2. The crux of plaintiff's response is that the union's decision not to arbitrate, made without an independent and adequate investigation, is per se arbitrary and thus a breach of the duty of fair representation.

To survive a motion for summary judgment, a plaintiff alleging a breach of the duty of fair representation must "set forth concrete, specific facts from which one can infer a union's hostility, discrimination, bad faith, dishonesty or arbitrary exercise of discretion." Spielmann v. Anchor Motor Freight, 551 F. Supp. 817 (S.D.N.Y. 1982); Helmer v. Briody, 721 F. Supp. 498 (S.D.N. Y. 1989). Applying this set of standards to the facts of this case, the question facing the court is whether Gold has alleged sufficiently concrete facts from which this court could reasonably infer that the union handled plaintiff's grievance in an arbitrary fashion and whether or not the union based its actions on some "rational consideration."

A review of the union's handling of Gold's case in light of this standard reveals sufficiently concrete facts from which one can infer that the union represented Gold in an arbitrary and perfunctory manner, particularly at the two critical fourth step meetings. The fourth step of the grievance procedure represents the grievant's last chance for convincing his employer to reconsider its termination decision. The next step is arbitration before an impartial arbitrator. Yet, in spite of the importance of a fourth step meeting for the grievant, Andre Henault, the union official charged with representing Gold at the two fourth step meetings, arrived at the second meeting only after discussion of Gold's case had passed. Following this meeting, the union reviewed Gold's case, presumably intending to rethink its decision to proceed to arbitration. In making this decision, Henault reviewed Gold's case file, but did not conduct any investigation of his own and did not speak with those union officials most familiar with the case and most supportive of Gold's claims of innocence. Indeed, Henault conducted no additional investigation whatsoever of Gold's grievance beyond reading the file. Based on this review of the evidence, and ...


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