Erler et al. v Graham Packaging Company, LP

Filing 79

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Defendant District 9, International Association of Machinists and Aerospace Workerss Motion for Summary Judgment (ECF No. 50 ) is GRANTED. IT IS FURTHER ORDERED that Defendant Graham Packaging Company L.P.s Motion for Summary Judgment (ECF No. 55 ) is GRANTED. A separate judgment will accompany this Memorandum and Order. Signed by District Judge Jean C. Hamilton on 8/10/15. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
BRENDA ERLER, et al.
Plaintiffs,
v.
GRAHAM PACKAGING COMPANY
L.P., et al.
Defendants.

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Case No. 4:14-cv-00931-JCH

MEMORANDUM AND ORDER
This matter is before the Court upon Defendant District 9, International Association of
Machinists and Aerospace Workers’s (“Union”) Motion for Summary Judgment (ECF No. 50),
and Defendant Graham Packaging Company, L.P.’s (“Graham”) Motion for Summary Judgment
(ECF No. 55). Both motions have been fully briefed and are ready for disposition.
BACKGROUND
The following facts are essentially undisputed. Plaintiffs were employees at Graham’s
facility in Berkeley, Missouri. At all relevant times, Plaintiffs were members of the collective
bargaining unit represented by the Union. (ECF No. 1, Compl. ¶¶ 1-11.) In 2012, Graham and
the Union entered into a 2012-2015 Collective Bargaining Agreement (hereinafter, the “CBA”).
(ECF No. 1.2, Compl. Ex. 2.) As relevant, the CBA provided that Graham could lay employees
off due to lack of work, and that employees on layoff could be recalled. Id. at 7-9. The CBA
also provided that “[t]he seniority and employment status of an employee shall terminate,” if,
among other reasons, “[t]he employee is not in active employment with [Graham] for a
continuous twelve-month period.” Id. at 6. Article 23 of the CBA, entitled “Plant Closing,”
provided:
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If for any reason this plant should close, each employee will receive one (1) week
of pay (40 hours) at their base rate for each year of service, plus one (1) week for
a partial year. This severance payment will be made as pay continuation. Each
employee shall also be covered under the health insurance plan to the end of the
month in which their severance ends and will require the normal employee
weekly contribution.
Id. at 17. Article 25, entitled “Sole Agreement,” provided, “This Agreement may not be altered
or amended in any way except by the express written consent of the parties hereto.” Id.
Plaintiffs were laid off on various dates between November 2012 and July 2013. In early
October 2013, Graham announced that it was closing the Berkeley facility. (ECF No. 52, Union
SUMF ¶¶ 2, 11.) On October 3, 2013, representatives of Graham and of the Union met to
address the effects of the plant closure.

According to Ann Ballesteros, a Union Business

Representative who attended the October 3 meeting, Graham’s representatives made it clear that
severance pay would not be provided to those on layoff, unless they were recalled. (ECF No.
14.1, Ballesteros Aff. ¶¶ 1, 11.) At the conclusion of the meeting, the parties executed a written
Severance Agreement (hereinafter, the “SA”), which was signed by representatives of Graham
and of the Union, and which covered a variety of topics including severance pay, medical and
dental benefits, vacation pay, and safety incentives. Id. ¶ 12. Regarding severance pay, the SA
provided:
[Graham] will apply a severance pay formula providing for forty (40) hours per
year of credited service at the employees regular base wage rate. (Employees
moved to a lower position due to staffing changes or layoff, will be paid their
severance at the rate of the position they held as of the date of this agreement.)
This amount will be made as a pay continuation or lump sum payment on the
week following the employees’ final paycheck.
(ECF No. 14.4, Ballesteros Aff. Ex. 3.) The SA further provided that “Employees laid off as of
October 3rd that may be asked to accept recall shall be eligible for severance under this
agreement provided they work until the company releases them.” Id. According to Ballesteros,

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“it was clear under the [SA] that laid off employees who were not recalled would not be entitled
to severance pay.” (Ballesteros Aff. ¶ 12.)
On October 28, 2013, Plaintiffs and other employees who were on layoff, and who
therefore would not be entitled to severance pay, filed a grievance, which was drafted by
Ballesteros. (Union SUMF ¶ 13.) The grievance stated: “Company is denying employees who
are laid off with recall the benefit as stated in Article 23 of the Collective Bargaining Agreement.
‘Severance due to plant closing.’” (ECF No. 14.5, Ballesteros Aff. Ex. 4.) On November 12,
2013, during a third-step grievance meeting, the fact that the SA excluded employees who were
on layoff from receiving severance benefits was discussed. (Union SUMF ¶ 15; Ballesteros Aff.
¶¶ 17-18.)

In a November 29, 2013 letter addressed to Ballesteros, Graham denied the

grievance, stating in part that Graham and the Union had reached a severance agreement, and
that “[d]uring [their] discussions it was determined only those employees that were actively
working as of the date of the announcement…would be eligible for severance benefits.” (ECF
No. 14.6, Ballesteros Aff. Ex. 5.)
The Union thereafter utilized a panel of Business Representatives to review the
grievance. Following a December 2013 hearing, the panel issued a decision, which it conveyed
in a December 16, 2013 letter addressed to Ballesteros. The letter stated that the panel had
reviewed the facts and evidence, “including but not limited to the [CBA’s] language regarding
the eligibility of severance pay to laid off members (Article 7 ‘Seniority’, Section 14h, which
states that an employee is not an active employee while in layoff status, and Article 12 [sic]
‘Plant Closing’ referring to pay continuation based on active employees),” and that the panel
found the grievance “lacked merit to proceed to the next step of the grievance procedure.” The

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next step would have been arbitration. (Union SUMF ¶ 19; Ballesteros Aff. ¶¶ 21-22; ECF No.
14.7, Ballesteros Aff. Ex. 6 (emphasis original).)
In May 2014, Plaintiffs filed a complaint in federal court under Section 301 of the Labor
Management Relations Act, 29 U.S.C. § 185, alleging that Graham had breached the terms of the
CBA with the Union regarding severance pay, and that the Union had breached its duty of fair
representation. (Compl. ¶¶ 13-14, 42-53.) In July 2014, the Union moved for dismissal or, in
the alternative, for summary judgment, and Graham moved separately for dismissal. (ECF Nos.
14, 19.) This Court denied Defendants’ motions (ECF No. 34), and as mentioned above,
Defendants have now moved for summary judgment.
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when no genuine issue of material fact exists and the
movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). The substantive law
determines which facts are material, and only disputes over “facts that might affect the outcome
of the suit under the governing law will properly preclude the entry of summary judgment.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). At the summary judgment stage, the
Court must view the facts in the light most favorable to the nonmoving party. Scott v. Harris,
550 U.S. 372, 380 (2007).
The moving party bears the initial responsibility of informing the district court of the
basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party
discharges this burden, the nonmoving party “must set forth specific facts demonstrating that
there is a dispute as to a genuine issue for trial.” Anderson, 477 U.S. at 248 (internal quotations
omitted). “[T]he party opposing summary judgment may not rest on the allegations in its
pleadings; it must set forth specific facts showing that there is a genuine issue for trial.” United

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of Omaha Life Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir 2006) (internal quotations omitted).
An issue of fact is genuine when “a reasonable jury could return a verdict for the nonmoving
party” on the question. Anderson, 477 U.S. at 248. “The mere existence of a scintilla of
evidence in support of the [non-moving party’s] position will be insufficient; there must be
evidence on which the jury could reasonably find for the plaintiff.” Id. at 252.
DISCUSSION
Section 301 confers federal jurisdiction over “[s]uits for violation of contracts between an
employer and a labor organization representing employees in an industry affecting commerce.”
29 U.S.C. § 185; Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 561-62 (1976). To prevail
in a Section 301 hybrid action against a union and an employer, a plaintiff “must prove both that
the union breached its duty of fair representation and that the employer breached the collective
bargaining agreement.” Scott v. United Auto., 242 F.3d 837, 839 (8th Cir. 2001). In other
words, an employee cannot recover against either party unless the employee proves his or her
case against both parties. Id.
A union breaches its duty of fair representation when the union’s conduct is “‘arbitrary,
discriminatory, or in bad faith.’” Smith v. United Parcel Serv., Inc., 96 F.3d 1066, 1068 (8th Cir.
1996) (quoting Vaca v. Sipes, 386 U.S. 171, 190 (1967)). “Mere negligence, poor judgment, or
ineptitude on the part of the union is insufficient to establish a breach of the duty of fair
representation.” Id. (internal quotations omitted). Where a union has acted in good faith, the
union’s action or inaction does not violate the duty of fair representation unless “the union’s
behavior is so far outside a wide range of reasonableness as to be irrational.” Id. at 1068-1069
(internal quotations omitted). To show bad faith, a plaintiff must offer “evidence of fraud,
deceitful action or dishonest conduct.” Id. at 1069 (internal quotations omitted).

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Federal common law governs the construction of a collective bargaining agreement.
Miner v. Local 373, 513 F.3d 854, 861 (8th Cir. 2008) (citing Textile Workers Union v. Lincoln
Mills, 353 U.S. 448, 456 (1957)). Where a collective bargaining agreement is unambiguous on
its face, the interpretation of its express language constitutes a question of law for the court to
decide. See Barrett v. Safeway Stores, Inc., 538 F.2d 1311, 1313 (8th Cir. 1976) (per curiam).
“To prove breach of a collective bargaining agreement, a plaintiff must show 1) the defendant
had a contractual obligation; 2) the defendant breached that obligation; and 3) the damages
sought by the plaintiff foreseeably flowed from the breach.” Brown v. Town & Country Masonry
& Tuckpointing, LLC, No. 4:12-CV-1227-DNN, 2012 WL 6013215, at *3 (E.D. Mo. Dec. 3,
2012) (internal quotations omitted).
Here, the parties spend significant portions of their summary judgment filings disputing
whether Plaintiffs were entitled to severance benefits under Article 23 of the CBA, whether
Graham breached the CBA, and whether the Union breached its duty of fair representation by
failing to proceed to arbitration with Plaintiffs’ grievance. This Court concludes, however, that
this case turns instead on the validity and terms of the subsequently-executed SA. Although
Plaintiffs explicitly state that “[their] claims…do not arise from the execution of a Severance
Agreement,” Defendants contend that the SA is the controlling document, and that under the SA,
Plaintiffs were not entitled to severance benefits unless they were recalled from layoff.
Plaintiffs do not address this argument in their memorandum opposing the Union’s
summary judgment motion.

In their memorandum opposing Graham’s summary judgment

motion, they generally assert that “case law shows that [Graham’s] focus on the October 3, 2013
‘new’ severance agreement does not foreclose its legal obligations under Article 23 of the CBA.”
Plaintiffs cite Zakulski v. Bethlehem Steel Corp., No. CIV-87-173E, 1989 WL 118743, at *5-7

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(W.D.N.Y. Oct. 4, 1989), rev’d in part on reconsideration, 1990 WL 82354 (W.D.N.Y. June 13,
1990), in support of their proposition. In Zakulski, the Court found that a “Memorandum of
Agreement” did not modify a benefit provided to the plaintiff in the existing collective
bargaining agreement. This Court is unpersuaded by Zakulski, however, because, among other
reasons, it is not clear that the SA in the instant case is closely analogous to the Memorandum of
Agreement in Zakulski, and Zakulski did not cite relevant authority in reaching its finding.
This Court concludes that, even if Plaintiffs had been entitled to severance pay under
Article 23 of the CBA, the SA was the controlling document at the time of the plant closure.
Where a union and an employer have executed two collective bargaining agreements which
cover the same subject matter, the latter agreement supersedes the former. See GCIU Emp’r Ret.
Fund v. Chi. Tribune Co., 66 F.3d 862, 866-67 (7th Cir. 1995) (finding later collective
bargaining agreement, which dealt with the same parties and subject matter, superseded earlier
pension subscription agreement) (citing Decca Records, Inc., v. Republic Recording Co., 235
F.2d 360, 363 (6th Cir. 1956)); Ottawa Office Integration Inc. v. FTF Bus. Sys., Inc., 132 F.
Supp. 2d 215, 219 (S.D.N.Y. 2001) (“It is a well settled principle of contract law that a new
agreement between the same parties on the same subject matter supercedes the old agreement”)
(citing NLRB v. Int’l Union of Operating Eng'rs, 323 F.2d 545, 548 (9th Cir.1963)); Marine
Transp. Lines, Inc. v. Int'l Org. of Masters, Mates & Pilots, 696 F. Supp. 1, 17 (S.D.N.Y. 1988)
(“Where two collective bargaining agreements are executed by the same parties and cover the
same subject matter, the latter supercedes the former only as to inconsistent provisions in the
two”; collecting cases), aff'd, 878 F.2d 41 (2d Cir. 1989).
In accordance with Article 25 of the CBA, the SA effectively amended the CBA’s
provision regarding severance pay in the event of a plant closure. The SA complied with the

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CBA’s requirement that modifications be made in writing, and the SA covered the same subject
matter discussed in Article 23 of the CBA. Pursuant to the language of the SA, as well and the
parties’ manifest intent (as described by Ballesteros, who was present during the negotiations),
employees on lay off as of October 3, 2013 were not entitled to severance pay unless they were
recalled.
This Court discerns no reason not to enforce the SA, nor have Plaintiffs provided one.
Therefore, this Court finds that Plaintiffs have failed to raise a genuine dispute regarding whether
Graham breached the collective bargaining agreement in effect at the time of the plant closure-the SA. In view of this conclusion, Plaintiffs’ Section 301 claim fails, and summary judgment in
favor of both Defendants is proper.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant District 9, International Association of
Machinists and Aerospace Workers’s Motion for Summary Judgment (ECF No. 50) is
GRANTED.
IT IS FURTHER ORDERED that Defendant Graham Packaging Company L.P.’s
Motion for Summary Judgment (ECF No. 55) is GRANTED. A separate judgment will
accompany this Memorandum and Order.

Dated this 10th day of August, 2015.

/s/ Jean C. Hamilton
UNITED STATES DISTRICT JUDGE

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