International Union of Operating Engineers Local 324, AFL-CIO et al v. US Ecology, Inc.
Filing
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MEMORANDUM AND ORDER GRANTING DEFENDANTS MOTION TO DISMISS (Doc. 4) Signed by District Judge Avern Cohn. (MVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GREGORY McKAY BROWN,
Plaintiff,
vs.
Case No. 18-11623
EQ INDUSTRIAL SERVICES, INC.,
d/b/a US ECOLOGY,
HON. AVERN COHN
Defendant.
_____________________________/
MEMORANDUM AND ORDER
GRANTING DEFENDANT’S MOTION TO DISMISS (Doc. 4)
I. Introduction
This is an employment case. It began when Local 324 (the Union) and Gregory
McKay Brown (Brown) sued defendant EQ Industrial Services, Inc. d/b/a US Ecology
(EQIS) claiming race discrimination under 42 U.S.C. § 1981 and Michigan’s ElliotLarsen Civil Rights Act, M.C.L. § 37.1101. Brown contends that EQIS discriminated
against him based on his race when it rejected his applications for promotion in January
2015 and November 2015. As will be explained, following a hearing, stipulations, and
supplemental briefing, the matter is before the Court on EQIS’s motion to dismiss the
Third Amended Complaint. For the reasons that follow, the motion will be granted
because Brown’s claims are time barred.
II. Background
A. Factual
1.
Brown is a current employee of EQIS. He began working for one of its many
predecessors of EQIS on or about November 27, 1989. For much of his employment,
Brown has worked in the part of the company known as Household Hazardous Waster
Department/Program.
On November 26, 2003, Brown executed an Application for Employment with a
predecessor of EQIS. See EQIS Ex. 2, Application. Directly above Brown’s signature,
the application contains a 180-day contractual limitations period, which states, in
relevant part:
I acknowledge that the term “the Company” as used
below means EQ – The Environment Quality Company
and any related companies to which I may transfer or be
assigned including, but not limited to, Michigan
Recovery Systems, Inc., Wayne Disposal, Inc. and E.Q.
Industrial Services, Inc.
***
I agree not to commence any action or suit relating to my
employment with the Company more than 180 days after
the date of termination of such employment or after the
date of the facts giving rise to the claim, whichever is
earlier, and to waive any statute of limitations to the
contrary.
Also on November 26, 2003, Brown also signed a Dispute Resolution
Agreement. See EQIS Ex. 4, Dispute Resolution Agreement. This agreement provides
in relevant part:
EQ encourages the prompt and inexpensive resolution of
disputes with applicants and current and former
employees. Therefore, EQ asks its applicants and
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employees to agree to this Dispute Resolution Agreement
for all claims and disputes (including claims or disputes
alleging illegal discrimination) they may have
concerning, arising from or relating to their application
for and/or employment with EQ, except as specifically
noted below. Your signature will acknowledge your
agreement.
***
3. If the claim or dispute is not resolved to my
satisfaction by EQ’s Director of Human
Resources, I will submit it to final and binding
arbitration…I acknowledge and agree that I and/or
EQ may move for the entry of judgment on any
arbitration award in the appropriate circuit court or
other court of competent jurisdiction.
4. EQ, as used in this Agreement, means The
Environmental Quality Company, EQ-Industrial
Services, Inc., EQ-Resource Recovery, Inc.,
Wayne Disposal, Inc., EQ-Northeast, Inc., and any
related company by which I may be employed.
The following language immediately precedes Plaintiff Brown’s signature:
I understand and agree that I signed this Dispute
Resolution Agreement I may not file a lawsuit in any
court against EQ concerning, arising from or relating
to my application to or employment with EQ and will,
instead, be limited to the procedure set forth above,
including final and binding arbitration. I believe this
is in my best interest and in the best interest of EQ
because it is likely to result in the relatively speedy
and inexpensive resolution of any claim or dispute
that may exist or arise.
(Emphasis in original.)
2.
In January 2015, Brown applied for the position of Manager of the Household
Hazardous Waste Management Department. Three months later, in April, he learned
he was not selected for that promotion. The position became available again in
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November 2015, and that Brown re-applied for the position at that time. About five
months later, in April 2016, EQIS selected an alternative candidate, an “Asian-Indian
female” for the position.
B. Procedural
On May 23, 2018, the Union and Brown filed a Complaint. (Doc. 1). In lieu of
filing an answer, EQIS moved to dismiss the Complaint on the grounds that the Union
was not a real party in interest, or otherwise lacked standing, and for the reason that all
of the claims against it are barred by the 180 day contractual limitations period
contained within the Application for Employment. In the alternative, EQIS argued that
the claims against EQIS should be dismissed in light of the binding arbitration provision
contained within the Dispute Resolution Agreement. (Doc. 4).
The Union and Brown then filed a Motion for Leave to File Second Amended
Complaint, pursuant to which they sought to amend the Complaint to add two exhibits.
The exhibits which McKay Brown and former Plaintiff Union attached to the proposed
Second Amended Complaint consisted of a 2015 employee handbook and a Letter of
Agreement dated December 19, 2018, which they claimed may be of assistance to
the Court in resolving EQIS’ Pending Motion to Dismiss Amended Complaint, or in
the Alternative Compel Arbitration. (Doc. 14). EQIS opposed the Motion on the
grounds that the proposed Second Amended Complaint remained subject to dismissal
because it brought only the same time-barred claims, which even if not time-barred,
were required to be arbitrated. (Doc.16)
In March 2019, the Court held a hearing on EQIS’ Motion to Dismiss and
Plaintiffs’ Motion for Leave to File Second Amended Complaint. The Court granted
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Plaintiffs’ motion (Doc. 20). The Court also granted EQIS’s motion in part, dismissing
the Union. (Doc. but taking the remaining issues presented in the motion under
advisement. The Court later entered an order dismissing the Union. (Doc. 21).
Brown then filed a Second Amended Complaint. (Doc. 22). The parties later
stipulated to permit Brown to amend his Second Amended Complaint to add a new
exhibit and to replace Exhibit A of the Second Amended Complaint (a Letter of
Agreement dated December 19, 2018) with a copy of a Represented Associates
Handbook Acknowledgment of Receipt dated March 5, 2014. See Doc. 23. The Court
then entered an order allowing Brown to file a Third Amended Complaint which also
permitted EQIS to file a supplemental brief in further support of its motion to dismiss.
(Doc. 25). EQIS has filed the supplemental brief. (Doc. 26).
III. Motion to Dismiss
A motion brought pursuant to Fed. R. Civ. P. 12(b)(1) tests whether the Court
has subject-matter jurisdiction of a claim. A motion for judgment on the pleadings under
Fed. R. Civ. P. 12(c) is evaluated under the same standards as a Rule 12(b)(6) motion
to dismiss for failure to state a claim for which relief can be granted. Scheid v. Fanny
Farmer Candy Shops, 859 F.2d 434, 436 n.1 (6th Cir. 1988).
In assessing a Rule 12(b)(6) motion, the district court must construe the
complaint in the light most favorable to the plaintiff and accept all well-pleaded factual
allegations as true. Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 512 (6th Cir. 2001).
The factual allegations of the complaint must be enough to raise a right to relief above
the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Further,
a court is “not bound to accept as true a legal conclusion couched as a factual
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allegation.” Id.
“In deciding a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), th[e] Court
may only consider ‘the facts alleged in the pleadings, documents attached as exhibits or
incorporated by reference in the pleadings, and matters of which the [Court] may take
judicial notice.’” Murray v. Geithner, 624 F. Supp. 2d 667, 671 (E.D. Mich. 2009) (citing
2 James Wm. Moore et al., Moore's Federal Practice 12.342 (3d ed. 2000). Here, the
Court has considered the exhibits attached to the pleadings and the parties’ papers.
IV. Analysis
A. Brown’s Employment Application
EQIS says that Brown’s claims must be dismissed because they were filed
outside of the 180 days period of limitations in his employment application. Because
Brown’s pleadings do not identify a specific date on which Plaintiff Brown alleged he
learned he had not been selected for promotion, EQIS calculated the 180 day limitation
period as running from the last day of April 2015 - when he was not promoted the first
time - and the last day of April 2016 - when he learned that another candidate was
selected for the second position he applied for. Brown did not file suit until May 23,
2018, which is well beyond 180 days.
Limitations periods are procedural tools “for the protection of defendants.”
Badgett v. FedEx, 378 F. Supp. 2d 613, 625 (M.D.N.C. 2005)(citing Order of United
Commercial Travelers v. Wolfe, 331 U.S. 586, 608 (1947)). “Among the basic policies
served by statutes of limitations is preventing plaintiffs from sleeping on their rights and
prohibiting the prosecution of stale claims.” Wright v. Heyne, 349 F.3d 321, 330 (6th
Cir. 2003); see Del. State Coll. v. Ricks, 449 U.S. 250, 256-57 (1980)(“The limitations
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periods…protect employers from the burden of defending claims arising from
employment decisions that are long past.”); Mo. Kan. & Tex. R.R. Co. v. Harriman
Bros., 227 U.S. 657, 672 (1913)(“The policy of statutes of limitation is to encourage
promptness in the bringing of actions.”).
Additionally, the Michigan Supreme Court has held that “an unambiguous
contractual provision providing for a shortened period of limitations is to be enforced as
written unless the provision would violate law or public policy.” Rory v. Continental Ins.
Co., 703 N.W.2d 23 (Mich. 2005). Courts have enforced contractual limitation
provisions similar to those signed by Brown in this case. See, e.g., Timko v. Oakwood
Custom Coating, Inc., 244 Mich. App. 234, 244 (2001)(enforcing a 180-day statute of
limitations period that was located in an employment application where the employer
provided the employee with “consideration to support enforcement of the terms of the
application, specifically employment and wages.”); Clark v. DaimlerChrysler Corp.,706
N.W.2d 471 (Mich. Ct. App. 2005) (finding 180-day contractual; limitation period in an
employment application enforceable)
Significantly, the Sixth Circuit has held that parties may contract for shorter
limitations periods to bar various state and federal claims, including claims brought
under Section 1981 and Michigan’s ELCRA. See, e.g.,Davis v. Landscape Forms, Inc.,
640 Fed. Appx. 445, 450 (6th Cir. 2016)(holding that shortened statutes of limitations
apply to claims brought pursuant to Section 1981 and rejecting plaintiff’s argument that
such a shortened statute of limitations violated the four year provision in Section 1981);
Boaz v. FedEx Customer Info. Servs., 725 F.3d 603, 606 (6th Cir. 2013)(noting that the
parties can agree to contractually shorten the statute of limitations for Title VII claims);
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Oswald v. BAE Industries, Inc., 483 Fed. Appx. 30, 34-35 (6th Cir. 2012)(enforcing a
contractually shortened statute of limitations); Steward v. New Chrysler, 415 F. App’x
632, 638 (6th Cir. 2011)(limiting claims brought under the ADA and Michigan’s civil
rights statutes to those falling within the six-month contractual limitations period); Rice v.
Jefferson Pilot Fin. Ins. Co., 578 F.3d 450, 454 (6th Cir. 2009)(enforcing shortened
statute of limitations as to federal claims); Bates v. 84 Lumber Co., L.P., 205 Fed. Appx.
317, 322-23 (6th Cir. 2006)(“parties may contract for shorter limitations periods” than
that provided by state and federal law); Thurman v. DaimlerChrysler, Inc., 397 F.3d 352,
357-59 (6th Cir. 2004) (enforcing six-month contractual limitations period for federal and
state discrimination claims); Myers v. Western-Southern Life Ins., 849 F.2d 259, 262
(6th Cir. 1988) (barring disability discrimination claims based on the contractual
limitations provision). As to Section 1981 particularly, courts have enforced a shortened
contractual limitations period. See Njang v. Whitestone Grp., Inc., 187 F. Supp. 3d 172,
178 (D.C. Cir. 2016) (six month statute of limitation applied to § 1981 claims).
Brown, however, relies on cases involving the Fair Labor Standards Act and
Family Medical Leave Act which do not permit shortened limitations periods. This
reliance is misplaced. The Sixth Circuit has distinguished FLSA and FMLA claims from
other employment related claims and, as noted in decisions above, have permitted
shortened periods in other statutes. See Boaz v. FedEx Customer Serv., Info, Svcs,
Inc., 725 F.3d 603, 6060 (noting that shortened periods are not enforceable as to the
FLSA and Equal Pay Act but are as to Title VII).
Here, as noted above, Brown signed an Application for Employment which
contains a truncated 180 day limitations period that is clearly and unambiguously set
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forth in the Application. “Because there are no statutes explicitly prohibiting the
contractual modification of limitations periods in the employment context, the contract
provision is not contrary to law.” Clark, 706 N.W.2d at 471. Moreover, “Michigan has
no general policy or statutory enactment prohibiting the contractual modification of the
periods of limitations provided by statute.” Id. Accordingly, Brown’s agreement to a
shortened period of limitations is enforceable and he was required to file suit on or
before October 27, 2015 and October 27, 2016, 180 days from the date of the
employment actions complained of, which occurred no later than April 30, 2015 (when
Brown learned he was not promoted for the first position he applied for) and April 30,
2016 (when Brown learned the second position he applied for was filled with another
candidate).
B. The Handbook and Handbook Receipt
Brown argues that a 2015 employee handbook and a 2014 Handbook Receipt
override and supersede the valid and enforceable contractual agreements between him
and EQIS pursuant to which he agreed to a shortened statute of limitations and to
binding arbitration. This argument does not carry the day, as explained below.
The handbook clearly states that “it is not intended to create, nor should it be
considered as creating an express or implied, contract, a promise of specific treatment
in any specific circumstance, a guarantee of employment for any term or a warranty of
any benefits.” The Handbook Receipt similarly states that “EQ may change, rescind, or
add to any policies, benefits, practices or procedures…” This language demonstrates
that EQIS did not intend to be bound to any provision contained in the Handbook or
Handbook Receipt. Because EQIS could unilaterally amend any provision in the
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Handbook and Handbook Receipt, they cannot be mutual or binding, i.e. they are not
contracts. See Mohamed v. Brenner Oil Co., No. 341899, 2019 WL 845852, at *3
(Mich. Ct. App. Feb. 21, 2019).
Brown, however, says that “the handbook expressly provides that it ‘defines the
company’s responsibilities and obligations to associates and vice versa’ and that it
“supersedes all prior versions”, and that the Handbook Receipt expressly provides that
the “Handbook supersedes any and all prior related policies of EQ or any of its past or
present related entities.” Neither the Handbook or Handbook Receipt contain any
language expressly stating that those documents are intended to supersede any prior
contractual agreements entered into between the parties.
In sum, there is no basis upon which to hold that a handbook or handbook
receipt, which make no reference to the contractual agreements at issue in this case,
somehow supersede them.
C. The Presence of the Union
Brown suggests that the employment application and arbitration agreement were
executed at a time in which Brown was part of a bargaining unit represented by the
Union. Brown has contended that in 2003, despite the presence of the Union, a
predecessor to EQIS began approaching bargaining unit employees such as Brown and
had them execute these separate employment agreements. Indeed, the Union was a
party to the case initially precisely because it believed the shortened statute of
limitations and arbitration agreements were illegal.
Section 7 of the NLRA provides in pertinent part as follows: “employees shall
have the right to self-organization, to form, join or assist labor organizations, to bargain
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collectively through representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or other mutual aid or
protection.” The Act provides that “it shall be an unfair labor practice for an employer -(1) to interfere with, refrain, or coerce employees in the exercise of the
rights guaranteed in section 157 of this title.” 29 U.S.C.§ 158(a)(1). The Act further
precludes an employer from discriminating “in regard to hire or tenure of employment or
any term or condition of employment” to discourage union membership. Id. at
§ 158(a)(3).
However, whether or not EQIS or a predecessor violated the NLRA is not at
issue for the Court. The Supreme Court has held that when an activity is arguably
subject to these provisions, state and federal courts must defer to the exclusive
jurisdiction of the National Labor Relations Board (NLRB). San Diego Bldg. Trades
Council, Millmen's Union, Local 2020 v. Garmon, 359 U.S. 236, 245 (1959).
Indeed, the Union is well aware of the role of the NLRB. During the pendency of
this case, the Union filed an unfair labor practice (“ULP”) charge with the NLRB. On
February 5, 2019 the Regional Director of the NLRB issued a “Decision to Partially
Dismiss” wherein it dismissed “the portions of the charge alleging that…the Employer
has maintained…and unilaterally implemented and attempted to enforce a mandatory
arbitration policy and a condition of employment requiring employees to file all claims
relating to employment within 180 days of the event, and that these actions were taken
without notice to or bargaining with the Union”, and “that such policy was the result of
the Employer directly dealing with the employees at a time when they were represented
for purposes of collective bargaining by the Union…” See EQIS’s Ex. 3. The Union
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appealed the decision to partially dismiss. On March 19, 2019, the NLRB affirmed the
Regional Director’s decision. See EQIS’s Ex. 4. Significantly, the NLRB decision
provides:
The Charging Party Union contends on appeal that it was unaware of
the alleged unlawful, unilateral changes made by the Employer…requiring
employees to execute the Employer’s job application agreeing to a 180-days
statute of limitations policy for filing work related claims from the date of the
occurrence or termination of employment, and/or…requiring employees to
execute the Employer’s dispute resolution agreement requiring arbitration of all
job-related claims…The Union’s contention of the alleged “secret nature of the
Employer’s policies herein” as a means of obstructing its actual
knowledge or constructive knowledge of the existence of either [the
180 day statute of limitations or the dispute resolution] policy prior to
August 2018 is contrary to the evidence. For one, the investigation
disclosed that in 2008 affiant witness presented by the Union on appeal
signed his own job application with the Employer inclusive of the
identical 180-day limitations period language, while additionally
executing a signed dispute resolution agreement limiting the forum for
addressing work-related matters to arbitration. Additionally, these
documents were regularly maintained in all employee personnel files,
including the ones reviewed by the Union in 2016. Under the
circumstances, the evidence supports a finding that the Union had
knowledge or constructive knowledge of the implementation and use
of the policies herein more than six months before the charge was filed and
served, and therefore, these allegations are barred from further processing under
Section 10(b) of the Act.
Thus, to the extent that Brown is attempting to have this Court resolve the issue of
whether EQIS’s actions in seeking to enforce the shortened statement of limitations to
which Brown agreed somehow constitute impermissible direct dealing or a violation of
the NLRA, that issue is not properly before this Court. Rather, the issue was properly
before the NLRB, who found against the Union.
Brown also contends that the statute of limitations is not enforceable because of
the presence of the Union. This argument does not carry the day. The Sixth Circuit has
held that a shortened statute of limitations agreements in a union environment are
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enforceable. In Thurman v. DaimlerChrysler, Inc., 397 F.3d 352, 356-358 (6th Cir.
2004) the Sixth Circuit rejected the arguments that the collective bargaining agreement
superseded the employment application and that the shortened statute of limitations
was a mandatory subject of bargaining. The court stated in relevant part:
We conclude that the collective bargaining agreement does not
supersede the employment application’s six-month statute of
limitations. Individual employment contracts are not inevitably
superseded by any subsequent collective agreement covering an
individual employee…there is no provision in the collective bargaining
agreement limiting the right of the employer to enter into abbreviated
limitations periods with individual employees. We also note that the
Thurmans have not pointed to any authority holding that statutes of
limitation are a mandatory subject of bargaining…
Thurman at 355-356. See also See Yeargin v. Chrysler Group, LLC, 2013 WL 593474
(E.D. Mich. Feb. 15, 2013)(citing Thurman and holding that shortened statute of
limitations applied when signed by employee who was included in collective bargaining
unit).
Here, the employment application is a contract which binds Brown. Because it is
clear that he did not file suit within 180 days of the alleged wrongs, Brown’s claims are
untimely and must be dismissed.
D. Arbitration.
EQIS alternatively argues that the case should be dismissed or stayed pending
arbitration, relying on the Dispute Resolution Agreement Brown signed on November
26, 2003 in which he agreed that any claims concerning, arising from or related to
his employment must be submitted to binding arbitration. While the Court agrees that
arbitration is favored as a general principle, the fact that Brown chose to file suit rather
than pursue arbitration forecloses the ability to send the case to arbitration. This is
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because Brown filed suit too late. As such, the Court will not address EQIS’s alternative
argument. The Court expresses no opinion on whether Brown may now seek
arbitration.
V. Conclusion
For the reasons stated above, EQIS’s motion to dismiss is GRANTED. This case
is DISMISSED.
SO ORDERED.
S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE
Dated: 5/6/2019
Detroit, Michigan
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