Allied Sales Drivers and Warehousemen, Local No. 289, International Brotherhood of Teamsters v. Sara Lee Bakery Group, Sara Lee Corporation
MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED: 1. Plaintiff's Motion for Summary Judgment 13 is DENIED. 2. Defendant's Motion for Summary Judgment 19 is GRANTED. Plaintiff's Complaint is DISMISSED with prejudice. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Chief Judge Michael J. Davis on 10/31/12. (GRR) Modified date filed and closed per chambers on 11/1/2012 (LJG).
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
ALLIED SALES DRIVERS AND
WAREHOUSEMEN, LOCAL NO. 289,
MEMORANDUM OF LAW & ORDER
Civil File No. 11-1745 (MJD/LIB)
SARA LEE BAKERY GROUP,
SARA LEE CORPORATION,
James T. Hansing, Hansing Law Office, Counsel for Plaintiff.
Cynthia A. Bremer, Anthony B. Byergo, Jody A. Ward-Rannow, and Nicholas J.
Walker, Ogletree, Deakins, Nash, Smoak & Stewart, PC, Counsel for Defendant.
This matter is before the Court on Plaintiff’s Motion for Summary
Judgment [Docket No. 13] and Defendant’s Motion for Summary Judgment
[Docket No. 19]. The Court heard oral argument on October 12, 2012. Because,
under the doctrine of res judicata, a previous federal judgment forecloses this
current lawsuit, the Court denies Plaintiff’s motion and grants Defendant’s
Defendant Sara Lee Bakery Group, Sara Lee Corporation 1 (“Sara Lee”) and
Plaintiff Allied Sales Drivers and Warehousemen, Local No. 289, International
Brotherhood of Teamsters (“Union”) have been parties to a collective bargaining
relationship for a number of years. The two most recent collective bargaining
agreements were in effect from December 11, 2005 through December 6, 2008 and
from December 7, 2008 through December 3, 2011. (DeBuck Decl., Exs. 1-2.)
During the time of these two agreements, the Union represented a bargaining
unit consisting of three groups of Sara Lee employees: route sales representatives
(“RSRs”), transport drivers, and shipping employees. (DeBuck Decl. ¶ 5.) RSRs
are generally paid a commission and deliver bakery products to Sara Lee retail or
to institutional customers in step-van vehicles. (Id.)
After this lawsuit was filed, Sara Lee’s bakery operations were purchased, so
the true defendant in this action is Earthgrains Baking Companies, Inc.
However, the parties continue to use the name “Sara Lee” to avoid confusion.
([Docket No. 20] Def.’s Mem. in Support at 1 n.1.)
The collective bargaining agreements contain a mandatory grievancearbitration provision, which applies to any controversy regarding the
agreements. (2005-08 Collective Bargaining Agreement, Art. 16; 2008-11
Collective Bargaining Agreement, Art. 16.)
The Dispute Regarding Aldi
On October 1, 2007, Union president Michael DeBuck learned that Sara Lee
was permitting the discount grocery chain, Aldi, to pick up Sara Lee products at
Sara Lee’s Roseville bakery and deliver them to an Aldi terminal or distribution
center in Faribault, Minnesota. (DeBuck Decl. ¶ 7.) DeBuck believed that this
practice was a violation of the collective bargaining agreement; therefore, on
October 1, 2007, he filed a grievance asserting that this work should have been
assigned to Sara Lee’s transport drivers represented by the Union. (Id. ¶ 7;
DeBuck Decl., Ex. 3.)
The parties convened for an arbitration hearing before Arbitrator Richard
Miller on September 18, 2008. (DeBuck Decl. ¶ 15.) At that hearing, the Union
sought to proceed with regard to the October 1, 2007 grievance regarding
transport drivers and Aldi, an October 22, 2007 amendment to the grievance
regarding transport drivers and Super Valu and Nash Finch, and a February 21,
2008 amendment regarding the RSRs. (DeBuck Decl. ¶ 16.) Sara Lee opposed
the Union’s attempt to proceed on multiple theories. (Id. ¶ 17.) The parties then
agreed not to submit the RSR grievance at that hearing. (Id.) The Arbitrator held
an evidentiary hearing regarding whether the Union could proceed with the
October 22, 2007 amendment concerning Sara Lee’s relationship with Super Valu
and Nash Finch and the transport drivers. (Id.)
The September 2008 Grievance on Behalf of the RSRs
On September 23, 2008, the Union filed a grievance on behalf of the RSRs,
regarding Sara Lee’s practice of permitting Aldi to pick up Sara Lee’s products at
Sara Lee’s Roseville plant and deliver them to an Aldi terminal or distribution
center in Faribault, Minnesota. (DeBuck Decl. ¶ 18; DeBuck Decl., Ex. 10.)
The 2009 Arbitration Award
On November 20, 2008, Arbitrator Miller held that the Union could
proceed on its amended October 27, 2007, grievance as to the violations
regarding Super Valu and Nash Finch and the transport drivers. (DeBuck Decl.
¶ 19; DeBuck Decl., Ex. 11.)
The arbitration occurred on December 8, 2008 before Arbitrator Miller.
(DeBuck Decl., Ex. 12, Feb. 20, 2009 Award at 2.) The formal issues to be decided
Did the Company violate the Collective Bargaining
Agreement by allowing third parties such as Aldi, Super Valu
and Nash Finch to pick up product produced by the Company
and transport the product to their warehouse sites? Or, in the
alternative, does this transport run work belong to bargaining
unit transport drivers?
If so, what is the appropriate remedy?
(DeBuck Decl. ¶ 20; Feb. 20, 2009 Award at 2.)
In the Arbitrator’s February 20, 2009 Award, he denied the Union’s
grievance and held that the collective bargaining agreement permitted Sara Lee
to enter into agreements with Aldi, Nash Finch, and Super Valu to allow them to
pick up and transport Sara Lee’s products. (Feb. 20, 2009 Award at 23.) The
Arbitrator found that, additionally, past practices between the Union and Sara
Lee required denial of the Union’s grievance. (Id. at 24.)
Attempt to Arbitrate the September 2008 Grievance
On March 3, 2009, the Union sent a letter to Sara Lee requesting arbitration
of the Union’s September 23, 2008 grievance on behalf of the RSRs regarding
Aldi. (Def. Ex. 3, Mar. 3, 2009 Letter.) On March 25, 2009, Sara Lee sent a letter
to the Union stating that the previous arbitration had resolved the issue. (Def.
Ex. 4, Mar. 25, 2009 Letter.) As of March 25, 2009, the Union was aware that Sara
Lee was refusing to arbitrate the new grievance. (Def. Ex. 2, DeBuck First Dep.
On April 21, 2009, the Union sent another letter to Sara Lee requesting
arbitration. (Def. Ex. 5, April 21, 2009 Fax.) At that time, the Union knew that
Sara Lee had already taken the position that the September 23, 2008 grievance
was not arbitrable and was refusing to arbitrate. (DeBuck First Dep. 35.)
On May 27, 2009, Sara Lee sent a responsive letter, again refusing to
arbitrate. (Def. Ex. 6, May 27, 2009 Letter.) At that time, the Union was aware
that Sara Lee refused to arbitrate the matter. (DeBuck First Dep. 36-39.)
The First Lawsuit
On May 21, 2010, the Union filed a lawsuit against Sara Lee in this District
to compel arbitration of the September 23, 2008 grievance regarding the RSRs
and Aldi. See Allied Sales Drivers & Warehousemen, Local No. 289,
International Brotherhood of Teamsters v. Sara Lee Bakery Group, Civil File No.
January 10, 2011 Grievance
On January 10, 2011, while the case was pending before the Honorable
Joan Ericksen, the Union again grieved the practice of allowing Aldi to pick up
and deliver Sara Lee’s product at the Roseville bakery, rather than having them
delivered by Union-represented RSR’s. (Def. Ex. 9, Jan. 10, 2011 Grievance.)
Specifically, it stated: “Payment due to Route Sales Representatives for product
delivered to Aldi’s from January 3, 2011 to the present and continuing. Violations
of Articles 2, 5, 9, and 10.” (Id.) DeBuck testified that the January 2011 grievance
was the same as the grievance that the Union had filed in September 2008. (See
Def. Ex. 10, DeBuck Second Dep. 36-38, 47-50.) The difference between the two
grievances was that the 2008 grievance sought relief from September 2008 going
forward and the January 2011 grievance sought relief from January 3, 2011 going
Sara Lee immediately denied the January 2011 grievance and refused to
arbitrate. (Compl. ¶ VIII.)
Judge Ericksen’s Decision
On April 15, 2011, Judge Ericksen issued an Order on the parties’ cross
motions for summary judgment. Judge Ericksen granted Sara Lee’s motion and
dismissed the lawsuit. The court held that a 6-month limitations period applied
to the Union’s motion to compel arbitration. Moreover, the court rejected the
Union’s argument that the 6-month limitations period did “not apply because the
underlying alleged violation of the collective bargaining agreements is a
continuing violation.” (Apr. 15, 2011 Order at 3.) It was undisputed that the
Union demanded arbitration of the September 23, 2008 grievance in March 2009,
and Sara Lee refused to arbitrate by, at the latest, May 2009. Thereafter, the
Union waited one year to file the federal lawsuit. The court concluded that the
lawsuit was untimely and dismissed it.
2011 Arbitration Demand
Following dismissal of the federal lawsuit, the Union sent a letter to Sara
Lee demanding arbitration of its January 10, 2011 grievance. Sara Lee notified
the Union that it would not arbitrate the claim on the grounds that Judge
Ericksen had already declared the arbitration demand for this dispute untimely.
On June 30, 2011, the Union filed a Complaint against Sara Lee in this
Court requesting that the Court order Sara Lee to proceed to arbitration of the
January 10, 2011 RSR grievance under Article 16 of the 2008-11 collective
bargaining agreement. The Complaint was brought under Section 301 of the
Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185.
Summary Judgment Standard
Summary judgment is appropriate if, viewing all facts in the light most
favorable to the non-moving party, there is no genuine dispute as to any material
fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The party seeking
summary judgment bears the burden of showing that there is no disputed issue
of material fact. Celotex, 477 U.S. at 323. “A dispute is genuine if the evidence is
such that it could cause a reasonable jury to return a verdict for either party; a
fact is material if its resolution affects the outcome of the case.” Amini v. City of
Minneapolis, 643 F.3d 1068, 1074 (8th Cir. 2011) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 252 (1986)).
“When deciding whether to compel arbitration, this court applies a two
part test: we must first consider whether a valid agreement to arbitrate exists. If
a valid agreement exists, we then consider the scope of the agreement.” United
Steelworkers of Am., AFL-CIO-CLC v. Duluth Clinic, Ltd., 413 F.3d 786, 788 (8th
Cir. 2005) (citations omitted). “An order to arbitrate the particular grievance
should not be denied unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that covers the asserted
dispute.” Id. (citation omitted).
Here, the parties agree that the collective bargaining agreement contains a
valid arbitration provision and that the arbitration provision covers the dispute
regarding whether RSRs are entitled to receive a commission for products picked
up by Aldi. The sole question before the Court is whether this lawsuit to compel
arbitration is barred – by res judicata from Judge Ericksen’s decision, by the
statute of limitations, or by collateral estoppel from the previous arbitration
Res Judicata Based on Judge Ericksen’s Decision
Standard for Res Judicata
“The preclusive effect of a federal-court judgment is determined by federal
common law.” Taylor v. Sturgell, 553 U.S. 880, 891 (2008) (citation omitted).
Under res judicata a final judgment on the merits of an action
precludes the parties or their privies from relitigating issues that
were or could have been raised in that action. To establish that a
claim is barred by res judicata a party must show: (1) the first suit
resulted in a final judgment on the merits; (2) the first suit was based
on proper jurisdiction; (3) both suits involve the same parties (or
those in privity with them); and (4) both suits are based upon the
same claims or causes of action.
Yankton Sioux Tribe v. U.S. Dept. of Health & Human Servs., 533 F.3d 634, 639
(8th Cir. 2008) (citations omitted).
Res Judicata and Labor Disputes
As an initial matter, the Court rejects the Union’s argument that, in labor
disputes, the arbitrator, not the court, should determine whether res judicata
applies. “The question of whether a petition to compel arbitration is timely
under the statute of limitations is an appropriate issue for the court; where the
district court has jurisdiction to hear a claim, it necessarily has jurisdiction to
determine the timeliness of that claim.” United Rubber, Cork, Linoleum, &
Plastic Workers of Am., AFL-CIO, CLU, Local 164 v. Pirelli Armstrong Tire
Corp., 104 F.3d 181, 183 (8th Cir. 1997) (citation omitted). Judge Ericksen held
that the original lawsuit to compel arbitration of the dispute was time barred,
under 29 U.S.C. § 160(b)’s six-month statute of limitations, which was an
appropriate exercise of jurisdiction under Pirelli Armstrong Tire. Now, this
Court is also properly exercising its own jurisdiction to determine the res
judicata effect of Judge Ericksen’s previous ruling on the question of the federal
statute of limitations.
Whether the Disputes Differ
The lawsuit before Judge Ericksen involved the same parties, was based on
proper jurisdiction, and resulted in a final judgment on the merits. See Austin v.
Super Valu Stores, Inc., 31 F.3d 615, 618, 618 n.5 (8th Cir. 1994) (noting that both
federal and Minnesota law “grant preclusive effect to dismissals based on statute
of limitations grounds”). Additionally, the Court concludes that both lawsuits
are based on the same claims or causes of actions.
Both the previous lawsuit and current lawsuit involve the same issue:
whether Sara Lee’s practice of allowing Aldi to pick up Sara Lee’s products at the
Roseville bakery, rather than having them delivered by the RSRs, violates the
collective bargaining agreement, and whether Sara Lee must arbitrate that
dispute with the Union.
As DeBuck’s testimony confirms, the September 2008 grievance that
formed the basis of the case before Judge Ericksen is based on the same facts as
the January 2011 grievance that forms the basis of this lawsuit. Sara Lee began
allowing Aldi to pick up Sara Lee products from the Roseville bakery and take
them to Aldi’s center in Faribault in, at the latest, 2007, and the practice has not
stopped or changed since then. The Union was aware of the practice since, at the
latest, 2007, and, based on Judge Ericksen’s ruling, the Union was aware that
Sara Lee refused to arbitrate the Aldi situation with regard to the RSRs since, at
the latest, 2009. The relief sought in the January 2011 grievance, seeking relief
from January 2011 to the present, is merely a subset of that sought in the 2008
grievance, seeking relief from September 2008 going forward to the present.
Judge Ericksen’s ruling explicitly held that the Union failed to file a timely
complaint to compel arbitration with regard to the same dispute at issue in this
case. Therefore, Judge Ericksen’s April 15, 2011 Order and Judgment bars
relitigation of the dispute under res judicata.
The Union attempts to avoid identity of the claims by asserting a
continuing violation and claiming that each day that Sara Lee refuses to pay
commissions to the RSRs for Aldi pick-ups is a new violation. “[A] cause of
action to compel arbitration under a collective bargaining agreement accrues
when one party clearly articulates its refusal to arbitrate the dispute.” Bass v.
City of Sioux Falls, 232 F.3d 615, 617-18 (8th Cir. 1999) (citation omitted). In
Judge Ericksen’s 2011 decision, the court explicitly rejected the Union’s argument
that its grievance regarding the RSRs and Aldi was not time barred “because the
underlying alleged violation of the collective bargaining agreements is a
continuing violation.” (Apr. 15, 2011 Order at 3.) Therefore, the issue of whether
the violation was continuing and spanning both the 2005-8 and 2008-11 collective
bargaining agreements has already been decided on these same facts, so Judge
Ericksen’s decision on the statute of limitations is res judicata.
Moreover, the Eighth Circuit holds that a continuing violation theory does
not apply to an unfair labor practice violation under the 6-month statute of
limitations applicable in this case, 29 U.S.C. §160(b), once the employer gives
“clear and unequivocal notice” that the unfair labor practice has occurred.
N.L.R.B. v. Jerry Durham Drywall, 974 F.2d 1000, 1004 (8th Cir. 1992).
In Jerry Durham Drywall, the Eighth Circuit explained how, in a 1980 case,
the NLRB had applied a continuing violation theory based on an employer’s
continuous failure to make trust fund payments. Id. (citing Farmingdale Iron
Works, Inc., 249 NLRB 98 (1980), enforcement granted by 661 F.2d 910 (2d Cir.
1981)). The Eighth Circuit noted that, in Farmingdale, “the Board held that the
violations, based on the company’s failures to make trust fund payments, were
‘separate and distinct’ violations that could be litigated even though there had
been similar failures to make payments prior to the 10(b) period.” Id. (citing
Farmingdale Iron Works, Inc., 249 NLRB at 99). The Eighth Circuit explained
that the continuing violation theory was only applicable in Farmingdale because,
in that case, the employer “‘did not convey a clear and unequivocal intention to
repudiate’ the collective-bargaining agreement until a date within the six-month
limitation period.” Id. (quoting Farmingdale Iron Works, Inc., 249 NLRB at 9899). The Eighth Circuit then held:
When there is notice of a clear and unequivocal repudiation, the
continuing violation theory no longer applies and a party is required
to file its unfair labor practice charge within six months of receipt of
such notice. Because the Union had clear and unequivocal notice of
Durham’s repudiation, the continuing violations theory does not
Jerry Durham Drywall, 974 F.2d at 1005 (citation omitted).
Applying Jerry Durham Drywall here, the Union cannot allege a
continuing violation, with each new day of Aldi pick-ups as a new violation,
because, by May 2009, the Union was aware of Sara Lee’s unequivocal position
that it would let Aldi pick up and not pay RSR commissions and that it would
not arbitrate that issue. In 2009, the Union had clear and unequivocal notice of
Sara Lee’s alleged violation, and there could be no continuing violation past that
point. Therefore, res judicata applies, and, additionally, the six-month statute of
limitations bars this current lawsuit.
Finally, the Court rejects Sara Lee’s request for attorneys’ fees. “Under the
bad faith exception, a trial court may award attorney’s fees to a prevailing party
when it finds the losing party has acted in bad faith, vexatiously, wantonly, or
for oppressive reasons.” Hoover v. Armco, Inc., 915 F.2d 355, 357 (8th Cir. 1990))
(citation omitted). Here, there is no evidence that the Union acted in bad faith in
bringing this claim.
Accordingly, based upon the files, records, and proceedings herein, IT IS
Plaintiff’s Motion for Summary Judgment [Docket No. 13] is
Defendant’s Motion for Summary Judgment [Docket No. 19]
is GRANTED. Plaintiff’s Complaint is DISMISSED with
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: October 31, 2012
s/ Michael J. Davis
Michael J. Davis
United States District Court
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