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Alves v. Valeo Electrical Systems

February 18, 2009

PAUL J. ALVES, ANTHONY L., SCOTT M. BARBATO, DONNA B. BARBIERI, BART J. BARNHOORN, KAREN E. BIEGAS, PAUL L. BLASETTI, JR., MARIO S. BOCCIA, DAVID A. BOSCARINO, DEBORAH M. BRYAN, JOHN J. CARPINO, MICHAEL A. CARPINO, PATRICIA A. CASTRECHINO, DANIEL J. CATHRON, MICHAEL CIARPELLI, DW AYNE CUNNINGHAM, ELAINE CUNNINGHAM, PATRICK V. DESIATO, MICHAEL P. DONOGHUE, DAW N MARIE EHRHARDT, TERRY R. FOLTS, DOUGLAS A. FOSTER, MAUREEN A. FOSTER, SCOTT M. HAYES, SHARON L. HAYES, PAULA KAISER, DANIEL E. KOHLER, CHRISTOPHER M. LARKIN, ROBERT E. LAURINI, MARK W. LEBRITON, JEFFREY S. LICATA, SUN H. LIM, ROSARIO C. LOBRUTTO, LOUIS J. LONGO, JAMES F. MCCABE, II, NICHOLAS MARCHIOLI, JR., EMILIO MUSCIANESE, RONALD J. OESCHGER, GARY S. PALERMO, ANTHONY PALMERI, PATRICK D. PANCIONE, JOSEPH P. PARINA, W ILLIAM B. DECISION AND PENNINGTON, JOSEPH PILATO, MICHAEL A. ORDER REIDOSH, JOHN RISTICH, JUTTA RODRIGUES, JOANN V. ROSS, JAMIE SAIEVA, DARRYL A. SMITH, BORIS TRAJKOVSKI, ANTONINO SORCI, LARRY D. THOMAS, GUY M. VITO, LISA W ALBRIDGE-BOSCARINO, GARY J. W HITEHAIR, VINCENT ZAGARI, PLAINTIFFS,
v.
VALEO ELECTRICAL SYSTEMS, INC., IUE-CW A AUTOMOTIVE CONFERENCE BOARD, AND IUE-CW A LOCAL 509, DEFENDANTS.



The opinion of the court was delivered by: Charles J. Siragusa United States District Judge

INTRODUCTION

This action was brought by Plaintiffs, represented employees of Valeo Electrical Systems, Inc. ("Valeo"), against Defendants, Valeo and IUE-CWA Automotive Conference Board and IUE-CWA Local 509 (collectively "the Union"), alleging violations of Section 9(a) of the National Labor Relations Act, 29 U.S.C. § 159(a) and Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. More specifically, Plaintiffs contend that Defendants collectively breached the implied duty of fair representation in the course of contract negotiations; that Valeo breached the collective bargaining agreement ("CBA") by wrongfully laying off represented employees without regard to seniority; and that the Union failed to grieve Valeo's alleged breach. The matter is before the Court on Valeo's and the Union's motions seeking dismissal of the complaint in its entirety for failure to state a cause of action, pursuant to Federal Rule of Civil Procedure 12(b)(6), and also seeking dismissal of certain causes of action as barred by the statute of limitations. For the reasons stated below, with the exception of Valeo's motion to dismiss the Second cause of action against it, the applications are denied .

FACTUAL BACKGROUND

As is required in deciding the motions, the Court assumes the allegations in the complaint are true and draws all reasonable inferences in favor of the non-moving party. First, all 57 plaintiffs were members of IUE-CW A Local 509 ("Local 509") and were employees of Valeo. (Compl. ¶¶ 5-61.) Both of the unions are labor organizations, and Local 509 along with IUE-CW A Automotive Conference Board ("National") were the bargaining representatives of Plaintiffs, pursuant to a CBA between the Union and Valeo effective from August 14, 2000, through July 31, 2008. (Compl. ¶ 65.) Valeo is a foreign business corporation authorized to do and doing business in the State of New York, with its principal place of business located at 3000 University Drive, Auburn Hills, Michigan and its local place of business maintained at 1555 Lyell Avenue, Rochester, New York 14606. At all times material to this claim VALEO was and is engaged in an industry substantially affecting interstate commerce within the meaning of Section 501 of the NLRA. (Compl. ¶ 62.) The following allegations are reproduced verbatim from the complaint:

66. In or around July 2000, VALEO and the UNION entered into a collective bargaining agreement (hereinafter "2000 Contact") wherein VALEO agreed to keep approximately 1,750 jobs at the Rochester plant through July 31, 2008, at which point the contract would be renegotiated.

67. In 2002, VALEO and the UNION negotiated to reduce VALEO's active workforce by implementing various attrition programs. Additionally, UNION members consented to various concessions from their 2000 Contract, including giving up an annual raise and increasing their share of health insurance costs, among other things.

68. Thereafter, on or around July 26, 2005, VALEO announced that it was closing its Rochester plant as of August 1, 2008. Upon information and belief, LOCAL 509 knew at the time of the 2002 negotiations that VALEO would be closing its plant. Upon further information and belief, LOCAL 509 did not inform its members of VALEO's intentions to close the plant in order to secure the foregoing concessions which would not have been, upon information and belief, approved had the members known the plant would be closing.

69. Thereafter, the UNION and VALEO engaged in negotiations over the effects of the plant closing in 2008.

70. Upon information and belief, VALEO instructed a few LOCAL 509 officials to create a plan to close the plant. Upon further information and belief, VALEO instructed said LOCAL 509 officials to make the plan cost-neutral, in other words, the plan to close the plant could not cost the company more than keeping the plant open.

71. Defendant LOCAL 509 prepared a "Pension proposal," dated August 19, 2005, that included as part of the calculation for retirement eligibility, all employee service that would be earned through July 31, 2008 -the final day that the plant was projected to be open.

72. As a result, the July 31st service date allowed approximately thirty-five (35) additional UNION members and VALEO employees, who would not have earned eligibility by the first of the month (i.e., July 1, 2008) but who would have earned said eligibility by August 1, 2008, to become eligible for full retirement benefits under the CBA, including continued healthcare and sub-pay following his/her attrition, layoff or retirement date.

73. The aforementioned thirty-five (35) individuals are commonly known as a group as the One Tenth people, inasmuch as each is allegedly missing approximately "one tenth" of the employment service time necessary to earn and keep full retirement benefits, some by as little as one day.

74. However, Defendant LOCAL 509 negligently engaged in the collective bargaining negotiations leading to ratification of the 2005 MOA by failing to include said One Tenth persons in the proposed monetary calculation of said Pension proposal that was submitted to management, which was cost-neutral.

75. Upon information and belief, LOCAL 509's calculation of the Pension proposal was cost-neutral because LOCAL 509 stripped approximately 187 members of their retirement health care coverage and sub-pay in order to subsidize approximately 313 other members' full retirement with retirement health care coverage and sub-pay, which included various LOCAL 509 officials.

76. Management accepted the Pension proposal and concluded negotiations.

77. However, despite including One-Tenth members in the Pension proposal, the cost of the One-Tenth members was negligently excluded from the calculation of the proposal and, therefore, the One-Tenth members are now being denied their full retirement benefits by VALEO.

78. One-Tenth members, including many Plaintiffs herein, grieved this decision, however, IUE-CW A UNION acknowledged the error by LOCAL 509, however, on or about August 31, 2006, Defendant IUE-CW A rejected the grievance and refused to go to arbitration because an arbitrator "might be inclined to put the parties back to the bargaining table to negotiate for the additional benefits" for those approximate thirty-five (35) One-Tenth members.

79. Meanwhile, on or around September 17, 2005, the UNION and VALEO reached a tentative memorandum of agreement (hereinafter "tentative MOA") wherein the Defendants agreed to various attrition programs designed to layoff significant numbers of VALEO employees before the 2008 plant closing and which drastically slashed retirement benefits for VALEO employees, including PIaintiffs herein. At the time of the tentative MOA, the UNION had approximately 500 active members.

80. Specifically, prior to the tentative MOA, the CBA provided that each member upon retirement, including Plaintiffs, would receive 95% sub-pay in the event of unemployment, his or her full pension, together with and, most importantly, continued health care benefits for life.

81. In stark contrast, however, the attrition programs provided that many members, including Plaintiffs herein, would receive no sub-pay upon lay-off, a reduced monthly pension upon retirement and receive no healthcare coverage during the course of their retirement.

82. The UNION, did, however, provide that some members would be eligible for a full retirement benefit, including sub-pay upon lay-off and continued healthcare coverage during the course of retirement.

83. Upon information and belief, the UNION arbitrarily created service requirements to allow these members to retire with a full pension. For example, the UNION granted a full pension to all Tier I employees, but selected only a handful of Tier II to be eligible for same - a result which allowed, upon information and belief, at least two UNION officials to achieve full pensions that each otherwise would not have been eligible for.

84. Moreover, and upon information and belief, UNION officials are retiring with a greater pension benefit than they would if they had actually achieved thirty years of service with the plant. Upon further information and belief, the Tier II members selected by the UNION to receive a full retirement will be receiving a pension based on thirty years of service, despite the fact that each Tier 11 member has only twenty-five years of credit.

85. On or around September 21, 2005, the UNION distributed to its members, including Plaintiffs herein, a summary booklet (hereinafter "Booklet") outlining the tentative MOA.

86. The Booklet, in part, specifically states on page 2 that:

The current contract is kept intact until July 31, 2008 . . . The only changes to the agreement are listed on the following pages.

87. The Booklet did not describe or mention any changes to the seniority provisions and requirements of the CBA. Moreover, the actual written tentative MOA was not provided to UNION members, including Plaintiffs herein, until after same had already been voted on.

88. The UNION is a seniority shop and the CBA clearly provides that any reduction in force by VALEO, including layoffs, can only be implemented in order of least senior employees to most senior employees.

89. The UNION, on or around September 25, 2005, four days after distributing the Booklet, held a meeting wherein the tentative MOA was ratified, upon which it officially was adopted as a Memorandum of Agreement (hereinafter "2005 MOA").

90. During the ratification meeting, the UNION informed the One-Tenth members (including many of the Plaintiffs herein) that the disputed coverage (July 31, 2008 service date) would be pushed for by the UNION at a later time, ...


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