Daugherty et al v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America et al
MEMORANDUM signed by District Judge Kevin H. Sharp on 8/13/2012. (hb)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
JAMES RAY DAUGHERTY, STEVE
DANIEL ALLEN, WILLIAM ORMAN
KNOX, J.C. HOLLINGSWORTH,
DARYLE RYCARDO DOWELL, SR.,
RICKY WILFORD BALTHROP,
SHELIAH RHONDA HUNTER,
WILLIAM ROBERT MAUPIN,
STEVEN EDWARD COUNTER,
ROBERT S. HEATHCOCK, KERRY B. )
STAMPER, DONNA FAY REKART,
JOHNNY LEE BUTLER, TOM BAKER )
JOHNSON, BRENDA COLEMAN,
REBECCA SPICER, DONALD ALLEN )
SPILLERS, DENNIS ALAN BRAZZELL , )
and KENNY WAYNE JOHNSON,
INTERNATIONAL UNION, UNITED
AUTOMOBILE, AEROSPACE AND
WORKERS OF AMERICA (“UAW”)
and UNITED AUTO WORKERS
LOCAL UNION 737 (“LOCAL 737”),
MAGISTRATE JUDGE BROWN
Defendants UAW and Local 737 (collectively, “Defendants” or “Unions”) filed a Second
Motion for Summary Judgment (Docket Entry No. 69), to which Plaintiffs James Ray
Daugherty, Steve Daniel Allen, William Orman Knox, J.C. Hollingsworth, Daryle Rycardo
Dowell, Sr., Ricky Wilford Balthrop, Sheliah Rhonda Hunter, William Robert Maupin, Steven
Edward Counter, Robert S. Heathcock, Kerry B. Stamper, Donna Fay Rekart, Johnny Lee Butler,
Tom Baker Johnson, Brenda Coleman, Rebecca Spicer, Donald Allen Spillers, Dennis Alan
Brazzell, and Kenny Wayne Johnson (collectively, “Plaintiffs”) filed a response1 (Docket Entry
No. 73), and Defendants filed a reply (Docket Entry No. 90). Having obtained prior leave of the
Court, Plaintiffs (Docket Entry No. 95) and Defendants (Docket Entry No. 99) each filed a surreply. For the reasons stated herein, the Court will deny Defendants’ motion.
This action involves the retirement packages offered to and accepted by Plaintiffs,
who previously worked at the Ford Motor Company (“Ford”) glass plant in Nashville and
were members of Local 737.2 Ford sold the facility to Visteon in 2000. Ford, Visteon,
and UAW negotiated a Memorandum of Agreement (“Memorandum”) in 2005 concerning
the restructuring of Visteon. (Docket Entry No. 73-25.) The Memorandum provided for
Visteon’s transfer of certain facilities, including the Nashville glass plant, to a third partyowned, Ford-controlled limited liability company known as Automotive Components
Most of the facilities transferred pursuant to the Memorandum,
including the Nashville glass plant, were designated for restructure and sale. (Id. at 2.)
Plaintiffs filed their response to Defendants’ motion and related materials under seal, claiming
that Defendants had designated some of the underlying documents as confidential. Magistrate
Judge Brown ordered that, absent a showing of cause why the documents should be sealed, the
Clerk should unseal the documents within fourteen days. (Docket Entry No. 86.) The parties
made no such showing of cause. In fact, Defendants filed a statement of non-opposition to
lifting the seal. (Docket Entry No. 88.) However, the Clerk never unsealed the documents.
Therefore, in its Order accompanying this motion, the Court shall also direct the un-sealing of
Plaintiffs’ response and the related materials.
Unless otherwise noted, the facts are drawn from the parties’ statements of material facts
(Docket Entry Nos. 69-1 and 75) and related declarations and exhibits. Although facts are drawn
from submissions made by both parties, on a motion for summary judgment, all inferences are
drawn in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v.
ZenithRadio Corp., 475 U.S 574, 586 (1986); McLean v. 988011 Ontario, Ltd., 224 F.3d 797,
800 (6th Cir. 2000).
However, Charles Browning, Assistant Director of UAW’s National Ford Department, and
Thomas “Butch” Stokes, Local 737’s bargaining chairman, consistently testified that Ford
would consider closing any such plant if there was no suitable buyer. In fact, some of the
plants designated in the Memorandum for restructure and sale were ultimately closed
Ford and UAW representatives came to the Nashville facility in October 2006 to
hold a mandatory meeting with Plaintiffs and the other members of Local 737. The UAW
representatives stated that, if Ford could not sell the plant, it would be closed and all its
employees laid off by September 1, 2007.
UAW representatives Joe Gafa and Jerry
Young explained Ford was making available a onetime buyout package that would allow
retirement-eligible employees at ACH facilities to draw part of their retirement and keep
their health insurance. These packages were represented to be the only ones available,
with no promise of other packages to come later. The representatives further indicated
that Ford could lay off those employees who did not sign up for a package, thus
eliminating their health insurance within a short time and severely affecting their
retirement benefits. While these laid-off employees would receive SUB-pay supplemental
unemployment benefits, the representatives warned that the sheer number of such
employees would quickly deplete the available SUB-pay funds.
could alternatively request a transfer, that option was described as risky because
employees who did not rank highly enough on the seniority list would also be laid off.
Local 737 members were given two weeks to decide whether to sign up for a
retirement package, request a transfer to another facility, or continue working at the
Nashville glass plant. Members who signed up for a buyout package could withdraw their
acceptance at any time before the effective date of the buyout.
testified about various conversations with Local 737 representatives which essentially
reinforced the message of the October 2006 meeting: the plant was at risk of closure and
employees should consider taking the buyouts. All Plaintiffs ultimately accepted the
buyout packages because they were told this package would be the only one, and no other,
better package would be offered subsequently. Plaintiffs left their employment with Ford
between December 2006 and August 2007.3 By contrast, over 60% of the Local 737
bargaining unit, including all of its elected officials, turned down these buyout packages.
During this period of time, prospective buyers toured ACH facilities, such as the
Nashville glass plant. Updates on the sale negotiations were discussed at non-mandatory,
sparsely attended Local 737 monthly membership meetings. In a May 2007 press release,
Ford disclosed that sales negotiations for ACH facilities, including the Nashville glass
plant, were ongoing (Docket Entry No. 99-3.) Glass Products, LLC (later “Zeledyne”)
ultimately purchased the Nashville glass plant and another ACH facility in Tulsa,
Oklahoma. Glass Products, LLC first expressed a written intent to purchase the Nashville
facility on September 6, 2007, and the consummated sale transaction was officially
announced in an April 14, 2008 press release.
In early 2008, Ford made a second retirement package offer to employees of the
Nashville glass plant that included better benefits than the packages Plaintiffs had
accepted. Furthermore, those who accepted the 2008 offer received a higher level of
benefit because they had accumulated more seniority in the interim since Plaintiffs’
Certain employees who accepted the packages in 2006 (including some Plaintiffs)
requested and received extensions of their departure date until various times in the first
half of 2007.
At their depositions, Browning and Stokes testified that certain facts were contrary
to what Plaintiffs and other Local 737 members had been told at the October 2006
mandatory meeting. Specifically, Browning testified the UAW had not been concerned
about the level of the SUB-pay fund and he was not aware of any risk of SUB-pay being
severely depleted. (Docket Entry No. 73-22, at 75-76.) Also, Stokes testified that it was
false to state that laid-off workers who had not accepted the retirement packages were at
risk of shortly losing their health insurance and having their retirement benefit severely
reduced. (Docket Entry No. 73-23, at 68.)
Ford and UAW’s Ford Department periodically negotiate the Master Agreement,
which governs the terms and conditions of employment for UAW-represented employees
in all of Ford’s United States facilities. UAW members vote to ratify each iteration of the
Master Agreement and have access to its terms for their personal review. Appendix M of
the Master Agreement explains the terms of eligibility for the Guaranteed Employment
Numbers (GEN) program. (Docket Entry No. 73-24). Available from 1984 to 2009, the
GEN-pay benefit provided for eligible laid-off employees to continue receiving their full
pay, health insurance, and credit for retirement over the lifetime of the collective
bargaining agreement then in effect.
Ford continued to offer the GEN-pay benefit
throughout the period covered by this lawsuit. Because of the potential cost of the GENpay benefit over a prolonged period of time, Ford stood to save money in the long run by
inducing employees instead to retire or accept a buyout. While the Plaintiffs would have
been subject to the Master Agreement’s provisions on GEN-pay, the employees hired
during the period that Plaintiffs accepted the retirement packages would not have been
eligible for GEN-pay because these new employees worked for Visteon instead of Ford.
Acknowledgment” form. (See Docket Entry No. 73-20.) This form defined “confidential
information” to include specifically (1) disclosure of the name of a potential buyer for an
ACH facility, (2) the fact that discussions with a potential buyer were taking place, and
(3) any information about an actual or potential bid. Signatories could be disciplined for
violating the confidentiality acknowledgment. The form exempted any such information
that was “generally publicly known.”
Stokes testified that he told Local 737
members he had signed the confidentiality acknowledgment.
Plaintiffs filed the original complaint in this action on July 17, 2008. Plaintiffs
subsequently amended the complaint several times, and the operative pleading is now the Third
Amended Complaint of December 18, 2008. (Docket Entry No. 23.) On March 31, 2010,
another department 4 dismissed all of Plaintiffs’ causes of action except a claim for breach
of the duty of fair representation, pursuant to Section 9(a) of the Labor Management
Relations Act. See 29 U.S.C.A. § 159 (1998). (Docket Entry No. 38.) Defendants’ first
motion for summary judgment on the remaining claim was denied without prejudice so
that Plaintiffs might have opportunity to depose Defendants’ representatives. (Docket
Entry No. 66.) In this renewed motion, Defendants contend that Plaintiffs’ section 9(a)
claim is time-barred and fails as a matter of law.
Summary Judgment Standard
A party may obtain summary judgment if the evidence establishes there are not any
genuine issues of material fact for trial and the moving party is entitled to judgment as a matter
of law. See Fed. R. Civ. P. 56(c); Covington v. Knox Cnty. Sch. Sys., 205 F.3d 912, 914 (6th Cir.
The case was reassigned to this Court on June 1, 2011. (Docket Entry No. 64.)
2000). The moving party bears the initial burden of satisfying the Court that the standards of
Rule 56 have been met. See University of Pittsburgh v. Townsend, 542 F.3d 513, 522 (6th Cir.
2008); Martin v. Kelley, 803 F.2d 236, 239 n.4 (6th Cir. 1986). The ultimate question to be
addressed is whether there exists any genuine issue of material fact that is disputed. See
Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986); Covington, 205 F.3d at 914 (citing Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986)). If so, summary judgment is inappropriate.
To defeat a properly supported motion for summary judgment, the nonmoving party must
set forth specific facts showing that there is a genuine issue of material fact for trial. See Fed. R.
Civ. P. 56(e); Celotex, 477 U.S. at 324. The nonmoving party’s burden of providing specific
facts demonstrating that there remains a genuine issue of material fact for trial is triggered once
the moving party shows an absence of evidence to support the nonmoving party’s case. Celotex,
477 U.S. at 325. A genuine issue exists “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. In ruling on a motion for
summary judgment, the Court must construe the evidence in the light most favorable to the
nonmoving party, drawing all justifiable inferences in its favor. See Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Statute of Limitations
The six-month statute of limitations of section 10(b) of the Labor Management Relations
Act governs an action for a union’s alleged breach of the duty of fair representation. See 29
U.S.C.A. § 160(b) (1998); DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 172 (1983);
Bowerman v. Int’l Union, United Auto., Aerospace & Agric. Implement Workers of Am., Local
No. 12, 646 F.3d 360, 366 (6th Cir. 2011). “[T]he limitations period begins to run when the
potential plaintiff ‘knows or should have known of the union’s alleged breach of its duty of fair
representation.’” Ratkosky v. United Transp. Union, 843 F.2d 869, 873 (6th Cir. 1988) (quoting
Dowty v. Pioneer Rural Elec. Co-Op., Inc., 770 F.2d 52, 56 (6th Cir. 1985)).
Plaintiffs claim that their July 17, 2008 complaint is timely because the better packages
were offered beginning in mid-February 2008. Defendants claim that Plaintiffs should have
known earlier, although Defendants’ position has not been consistent regarding the date of
Plaintiffs’ constructive knowledge.
In Defendants’ prior summary judgment motion, for
example, Defendants claimed it was an undisputed fact that Ford did not make its second round
of retirement offers to employees of the Nashville glass plant until January 2008, pursuant to
three-way negotiations among Ford, UAW, and Zeledyne. (Docket Entry No. 39-1, at 7.)
Furthermore, the additional offers were “a direct result of Zeledyne’s offer” to purchase the
Nashville glass plant, and “[t]he UAW had no means to anticipate the details of the proposed
benefit packages until they were negotiated with Ford as part of the purchase process.” (Id.)
The terms of those offers depended on the Ford-Zeledyne sales negotiations, and the completed
purchase was not announced under April 2008. (Id. at 8.) Therefore, Defendants’ prior motion
essentially makes the argument for Plaintiffs as to why the trier of fact, rather than this Court,
must decide whether the action is time-barred. Summary judgment is inappropriate on statute of
Duty of Fair Representation
“A breach of the statutory duty of fair representation occurs only when a union’s conduct
toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith.”
Vaca v. Sipes, 386 U.S. 171, 190 (1967); Bowerman, 646 F.3d at 368. “Under this tripartite
standard, a court should look to each element when determining whether a union violated its
duty.” Merritt v. Int’l Ass’n of Machinists & Aerospace Workers, 613 F.3d 609, 619 (6th Cir.
2010) (citing Air Line Pilots Int’l v. O’Neill, 499 U.S. 65, 77 (1991)); cf. Black v. Ryder/P.I.E.
Nationwide, Inc., 15 F.3d 573, 584 (6th Cir. 1994) (“Thus, the three named factors are three
separate and distinct possible routes by which a union may be found to have breached its duty.”).
“A union’s actions are arbitrary ‘only if, in light of the factual and legal landscape at the
time of the union’s actions, the union’s behavior is so far outside a wide range of reasonableness
as to be irrational.’”
Bowerman, 646 F.3d at 368 (quoting O’Neill, 499 U.S. at 67).
Discretionary judgments are not arbitrary merely because they subsequently turn out to be
wrong. Id. (citing Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 45-46 (1998)). A showing
of discriminatory action “‘carries with it the need to adduce substantial evidence of
discrimination that is intentional, severe, and unrelated to legitimate union objectives.’” Merritt,
613 F.3d at 619 (quoting Amalgamated Ass’n of Street, Ry. & Motor Coach Employees of Am. v.
Lockridge, 403 U.S. 274, 301 (1971)). Finally, “‘[t]o show bad faith, a plaintiff must show
evidence of fraud, deceitful action, or dishonest conduct.’” Hayes v. UPS, 327 F. App’x 579,
585 (6th Cir. 2009) (quoting Summers v. Keebler Co., 133 F. App’x 249, 253 (6th Cir. 2005)
(citing Humphrey v. Moore, 375 U.S. 335, 348 (1964))). With respect to each of these three
prongs, mere negligence is insufficient to establish a claim for breach. United Steelworkers of
Am., AFL-CIO-CLC v. Rawson, 495 U.S. 362, 372-73 (1990); Mains v. LTV Steel Co., 89 F.
App’x 911, 918 (6th Cir. 2003).
Applied to this case, Plaintiffs’ response relies heavily on information Plaintiffs obtained
during the recent deposition discovery period. In particular, Plaintiffs make much of the GENpay benefit and Defendants’ failure to disclose Plaintiffs’ potential eligibility for it. According
to Plaintiffs’ theory, Defendants must have known that Ford would somehow come up with
better buyout or retirement packages because Ford emphatically did not want the expense of
GEN-pay. Plaintiffs have overstated the legal significance of GEN-pay, however. Eligibility for
GEN-pay benefits is clearly set forth in Appendix M of the Master Agreement, an agreement
ratified by UAW members (including the Plaintiffs) and readily accessible for Plaintiffs’ review.
If Plaintiffs believed the union’s presentation in the October 2006 meeting knowingly and
deliberately contradicted the Master Agreement’s terms concerning GEN-pay, they should have
filed suit within the six-month statute of limitations, instead of waiting a year and nine months to
initiate this litigation. Furthermore, the record before the Court belies the assumption that the
Unions must have known subsequent packages were coming. Instead, the consistent, unrebutted
testimony of Defendants’ representatives reflects that, while the Memorandum said the Nashville
glass plant would be restructured and sold, Ford was prepared to close the facility if a buyer did
not materialize. Nor does the record indicate that, at the time of the October 2006 meeting (or
even prior to the effective dates of the buyout packages that Plaintiffs accepted), Defendants ever
knew the Nashville glass plant would find any buyer, much less a buyer that would offer more
generous retirement packages. At most, the Unions negligently predicted the worst-case scenario
and guessed wrong about the future of the Nashville glass plant, and such a mistake in judgment
is not cognizable. Bowerman, 646 F.3d at 368 (citing Marquez, 525 U.S. at 45-46).
Relatedly, Plaintiffs rely too much on the confidentiality acknowledgment forms that,
under penalty of disciplinary action, prohibited the Unions’ officials from disclosing information
about potential bids or buyers for ACH-held facilities. While the scope of these agreements
included the fact of discussions with a potential buyer, the agreements exempted “generally
publicly known” information.
Ford made ongoing negotiations about the purchase of the
Nashville glass plant generally publicly known through at least one press release (see Docket
Entry No. 99-3).
Furthermore, within the confines of the facility, potential buyers were
discussed at Local 737 membership meetings that Plaintiffs chose not to attend. Compliance
with the confidentiality acknowledgment forms did not give rise to a breach of the duty of fair
Plaintiffs’ claim will survive summary judgment, however, because of a material dispute
of fact whether Defendants acted in bad faith through knowingly inaccurate statements about the
solvency of the SUB-pay fund and the longevity of health insurance coverage for Local 737
members who declined the October 2006 buyout packages. For purposes of summary judgment
only, Defendants have admitted saying that employees who did not accept the buyout packages
risked the rapid depletion of SUB-pay funds and the swift elimination of their health insurance
coverage. Browning and Stokes both testified to the contrary, i.e., the SUB-pay fund was
adequately capitalized, and employees would not immediately lose their health insurance.
Consistent with the Sixth Circuit’s rule that dishonest conduct establishes bad faith, Hayes, 327
F. App’x at 585, other circuits have held that misrepresentation or concealment by union
representatives can establish a union’s breach of its duty of fair representation. See, e.g.,
Aguinaga v. United Food & Comm. Workers Int’l Union, 993 F.2d 1463, 1470-71 (10th Cir.
1993); Thomas v. Bakery, Confectionary & Tobacco Workers Union Local No. 433, 826 F.2d
755, 759 (8th Cir. 1987); Acri v. Int’l Ass’n of Machinists & Aerospace Workers, 781 F.2d 1393,
1397 (9th Cir. 1986).
At trial, Defendants may be able to prevail by showing that their representatives did not
make these statements or made them with mere negligence of their inaccuracy. Alternatively,
Defendants may be able to show the statements were accurate. In any event, because of the
factual disputes surrounding the statements and their accuracy, the Court cannot resolve the duty
of fair representation claim on summary judgment.
For all of the reasons stated, Defendants’ Second Motion for Summary Judgment (Docket
Entry No. 69) will be denied. The Clerk will be directed to unseal the documents that Plaintiffs
filed with their response.
An appropriate Order shall be entered.
KEVIN H. SHARP
UNITED STATES DISTRICT JUDGE