SMOKOWICZ v. GRAPHIC PACKAGING INTERNATIONAL, INC. et al

Filing 18

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 2/27/17. 2/27/17 ENTERED AND COPIES EMAILED.(rf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
MICHAEL D. SMOKOWICZ
v.
GRAPHIC PACKAGING
INTERNATIONAL, INC. et al.

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O’NEILL, J.

CIVIL ACTION
NO. 16-5891

February 27, 2017
MEMORANDUM

Plaintiff, former employee Michael D. Smokowicz, brings a hybrid claim for breach of a
Collective Bargaining Agreement and violation of § 301 of the Labor Management Relations
Act, 29 U.S.C. § 185 et seq., against his former employer, defendant Graphic Packaging
International, Inc., (Count I), and defendant AFL-CIO, CLC Local Union # 807 1 (Count II), for
failure to allow plaintiff to grieve his May 11, 2016 termination. He also brings a separate claim
against Graphic Packaging for breach of his Last Chance Agreement (Count III).
Graphic Packaging filed a motion to dismiss Counts I and III against it, Dkt. No. 10,
plaintiff responded, Dkt. No. 16, and Graphic Packaging replied, Dkt. No. 17. Defendant Union
also filed a motion to dismiss the claim against it (Count II), Dkt. No. 15, to which plaintiff did
not file a separate response. Under Local Rule 7.1(c), I am empowered to grant the Union’s
motion as uncontested. 2 However, because plaintiff’s response to Graphic Packaging’s motion

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The party’s full name is United Steel, Paper, Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Services Workers International Union (USO) AFL-CIO, CLC Local Union
# 807.
2
More than fourteen days have elapsed since defendant Union filed its motion and served
it upon plaintiff’s counsel. See Dkt. No. 15 (served February 2, 2017). Under Local Rule 7.1(c),
any party opposing the motion shall serve a brief in opposition
together with such answer or other response that may be
appropriate, within fourteen (14) days after service of the motion
and supporting brief. In the absence of timely response, the

addresses the legal issues discussed in the Union’s brief, I will consider the merits of both
motions.
After considering the parties’ arguments, I will grant defendants’ motions and dismiss the
complaint. With respect to plaintiff’s hybrid claims in Counts I and II, he has not pleaded
sufficient facts showing that the Union breached its duty of fair representation as required to
state a claim against either defendant. With respect to Count III, he has not stated a claim for
breach of the Last Chance Agreement because he has not alleged facts showing that the
agreement, on its own, gives him a right to continued employment.
BACKGROUND
On May 11, 2016, Graphic Packaging fired plaintiff “on the ostensible basis that he erred
in shipping a pallet of Hershey Reese PB King Size packages” that were mislabeled “with SAP
batch tags identifying it as a 8oz Kraft Cream Cheese.” Compl. ¶ 9. Plaintiff petitioned the
Union to protect his rights under the collective bargaining agreement (CBA), but the Union
refused to do so, advising him that he did not have the right to grieve Graphic Packaging’s action
under the terms of a “Last Chance Agreement” plaintiff had entered into in March 2013. Compl.
¶¶ 11, 18.
The Last Chance Agreement arose from an incident in which Graphic Packaging fired
plaintiff for throwing a coating dolly at a co-worker. Compl. Ex. B. Plaintiff subsequently
entered into the Last Chance Agreement with the Union and Graphic Packaging pursuant to
which he returned to his job under certain conditions, including no back pay, loss of seniority
and completion of a mandated counseling program. Compl. Ex. B. The Last Chance Agreement

motion may be granted as uncontested except as provided under
Fed. R. Civ. P. 56 [governing summary judgment motions].
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also provided that plaintiff “will be terminated for his first failure to meet the any of terms [sic]
or conditions outlined below” and that “[t]his agreement and any subsequent termination
resulting from it will be non-grievable.” Id. Finally, the agreement stated:
Upon reinstatement, and for the remainder of his employment at
the Valley Forge Plant, Mr. Smokowicz must perform all aspects
of his job satisfactorily and meet all established standards of
conduct. Unsatisfactory job performance includes but is not
limited to non-compliance with company plant rules, policies or
procedures, lack of productivity, unsafe acts, insubordination,
negligent reckless behavior, misconduct, etc.
This Last Chance Agreement, establishing terms and conditions to
reinstate and continue Mr. Smokowicz’s employment, will not be
viewed now, or in the future, as having compromised the Valley
Forge plant rules in any way, or any other policy or procedure.
This Last Chance Agreement is non-precedent setting, will not be
referenced in future discussion between the Parties, and is nongrievable.
Compl. Ex. B (emphasis in original).
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) permits a court to dismiss all or part of an action
for “failure to state a claim upon which relief can be granted.” Typically, “a complaint attacked
by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations,” though
plaintiff’s obligation to state the grounds of entitlement to relief “requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “Factual allegations must be enough to raise
a right to relief above the speculative level . . . on the assumption that all of the allegations in the
complaint are true (even if doubtful in fact).” Id. (citations omitted). A well-pleaded complaint
may not be dismissed simply because “it strikes a savvy judge that actual proof of those facts is
improbable, and that a recovery is very remote and unlikely.” Id. at 556. However, a complaint
must provide “enough fact[s] to raise a reasonable expectation that discovery will reveal
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evidence of” the necessary element. Id. at 556. The Court of Appeals has made clear that after
Ashcroft v. Iqbal, 556 U.S. 662 (2009), “conclusory or ‘bare-bones’ allegations will no longer
survive a motion to dismiss: ‘threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.’ To prevent dismissal, all civil complaints must
now set out ‘sufficient factual matter’ to show that the claim is facially plausible.” Fowler v.
UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009), quoting Iqbal, 556 U.S. at 678. The Court
also set forth a two part-analysis for reviewing motions to dismiss in light of Twombly and Iqbal:
First, the factual and legal elements of a claim should be separated.
The District Court must accept all of the complaint’s well-pleaded
facts as true, but may disregard any legal conclusions. Second, a
District Court must then determine whether the facts alleged in the
complaint are sufficient to show that the plaintiff has a “plausible
claim for relief.”
Id. at 210-11, quoting Iqbal, 556 U.S. at 679.
DISCUSSION
I.

Counts I and II: Breach of Collective Bargaining Agreement and § 301
Plaintiff has not alleged facts showing that the Union’s actions were arbitrary,

discriminatory or in bad faith, as he must in order to state a hybrid § 301/fair representation
claim against either Graphic Packaging or the Union. In a hybrid § 301/fair representation claim,
a plaintiff suing either his employer or his union “must not only show that [his] discharge was
contrary to the [CBA] but must also” demonstrate “breach of duty by the Union.” DelCostello v.
Teamsters, 462 U.S. 151, 164–65 (1983). This is so even for a claim against the employer alone.
Id. It furthers the policy that, “[s]ubject to very limited judicial review, [a plaintiff] will be
bound by the result [of the grievance process] according to the finality provisions of the
[collective bargaining] agreement.” Id. at 164. Thus even if, as plaintiff argues, the terms of the
Last Chance Agreement do not eliminate his right under the CBA to have an arbitrator determine
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whether he performed his job unsatisfactorily, see United Steelworkers of America, AFL-CIO v.
Lukens Steel Co., 969 F.2d 1468 (3d Cir. 1992), plaintiff must still allege facts showing breach
of duty by the Union.
Because the grievance proceeding in which a union represents an employee can be
binding, a union has a duty to “serve the interest of all members without hostility or
discrimination toward any, to exercise its discretion with complete good faith and honesty, and to
avoid arbitrary conduct.” Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S.
558, 563 (1990). A union breaches its duty of fair representation if its actions are “arbitrary,
discriminatory, or in bad faith.” Vaca v. Sipes, 386 U.S. 171, 190 (1967); DelCostello, 462 U.S.
at 164. “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.” Air Line Pilots Ass’n v. O’Neill, 499 U.S. 65, 67 (1991) (internal
quotation marks omitted). A union’s actions are in bad faith where “the union and its
representatives harbored animosity towards the employee; and . . . that animosity manifested
itself as a material factor in the union’s handling of the employee’s grievance.” Sterrett v. Giant
Eagle, Inc., No. 14-235, 2015 U.S. Dist. LEXIS 23304, *21–23 (W.D. Pa. Jan. 22, 2015).
A union’s decision not to pursue a grievance it believes in good faith to be
nonmeritorious is not a breach of its duty of fair representation. See Vaca v. Sipes, 386 U.S.
171, 192 (1967) (“[A] union does not breach its duty of fair representation, and thereby open up
a suit by the employee for breach of contract, merely because it settled the grievance short of
arbitration.”).
Rather, a union is obligated to exercise its power as bargaining
agent fairly under the collective bargaining agreement and must
not assert or press grievances that it believes in good faith do not
warrant such action. . . . Accordingly, an employee is subject to
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the union’s discretionary power to settle or even to abandon a
grievance, so long as it does not act arbitrarily, even if the
employee’s claim was meritorious. . . . Thus, proof that a union
acted negligently or exercised poor judgment is not enough to
support a claim that a union breached its duty of fair
representation.
Abramowich v. CSX Transp., Inc., 975 F. Supp. 2d 513, 522 (W.D. Pa. 2013), citing Bazarte v.
United Transp. Union, 429 F.2d 868, 872 (3d Cir. 1970).
Plaintiff has not alleged facts showing that the Union’s decision to abandon his grievance
was based on anything other than its legal conclusion that the Last Chance Agreement precluded
his claim. Rather, his allegations with respect to the Union’s motive are “threadbare recitals of
the elements of a cause of action, supported by mere conclusory statements.” Iqbal, 556 U.S. at
678. He alleges the Union refused to protect his rights under the CBA “in bad faith and in an
arbitrary manner.” Compl. ¶ 11. He further alleges the “Union breached its duty of fair
representation to plaintiff by failing to pursue a grievance on plaintiff’s behalf, and further, by
advising him that he did not have the right to grieve the Employer’s action under the terms of the
Last Chance Agreement.” Compl. ¶ 18. Plaintiff’s allegations do not show, by setting out facts
that go beyond conclusory statements, that the Union’s decision was arbitrary, discriminatory or
in bad faith. As this is required for plaintiff’s § 301/fair representation claims against both the
Union and Graphic Packaging, his employer, I will dismiss both claims with leave to amend to
the extent plaintiff can allege facts that are sufficient to state a claim.
II.

Count III: Breach of the Last Chance Agreement
Plaintiff also has not stated a claim for breach of contract against Graphic Packaging

under the Last Chance Agreement. He alleges the Last Chance Agreement “is an employment
contract separate and independent of the Collective Bargaining Agreement . . . .” Compl. ¶ 21.
In his brief, he argues that “[u]nder the terms of the Last Chance Agreement, Employer was
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empowered to discharge him only under certain conditions, i.e. unsatisfactory job performance.”
Pl.’s Br. at 7. Plaintiff does not state a claim for breach of contract because neither the alleged
terms of the Last Chance Agreement nor the alleged circumstances surrounding the agreement’s
creation suggest that the agreement imposed a duty on Graphic Packaging to continue to employ
him.
To state a claim for breach of contract, a plaintiff must aver facts showing the existence
of a contract, a breach of a duty imposed by the contract and resultant damages. Jenkins v. Cnty.
of Schuylkill, 658 A.2d 380, 383 (Pa. Super. Ct. 1995). Under Pennsylvania law, there is a
presumption that a company does not have a duty to continue to employ a worker. Greene v.
Oliver Realty, Inc., 363 Pa. Super. 534, 553 (Pa. Super. Ct. 1987) (“[A]n employment contract is
presumptively terminable at will.”). This “at-will presumption” is only overcome where “the
parties intended to contract for a definite period.” Id. at 551. The “intention of the parties . . . is
the ultimate guide.” Id. at 552. “[I]n order to ascertain that intention, the court may take into
consideration the surrounding circumstances, the situation of the parties, the objects they
apparently have in view, and the nature of the subject matter of the agreement.” Id. at 552,
quoting Price v. Confair, 79 A.2d 224, 226 (Pa. 1951).
Where a plaintiff does not allege facts raising a reasonable expectation that discovery will
reveal evidence that the defendant breached a duty in the contract, the claim should be dismissed.
See Twombly, 555 U.S. at 556; see also Natale v. Winthrop Res. Corp., No. 7-4648, 2008 U.S.
Dist. LEXIS 54358, *16 (E.D. Pa. July 9, 2008) (dismissing a claim for breach of an
employment contract where “neither the Complaint nor Plaintiff’s Opposition to Defendant’s
Motion to Dismiss suggest that Plaintiff was orally offered a definite term of employment or that
the parties verbally agreed that he would not be an at-will employee”); Smith-Cook v.

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AMTRAK, No. 5-880, 2005 U.S. Dist. LEXIS 27297, *37-38 (E.D. Pa. Nov. 10, 2005) (“A
plaintiff’s bare allegation that her employment relationship is contractual in her response to
defendants’ motion to dismiss is insufficient to rebut the presumption of at-will employment.”).
Considering the Last Chance Agreement as an employment contract separate and
independent of the CBA, as plaintiff argues it should be, neither the terms of the Last Chance
Agreement nor the other allegations in the complaint are sufficient to suggest that the parties to
the Agreement intended to contract for a definite period. The Agreement states that Graphic
Packaging “will, under the following conditions, reinstate” plaintiff, and that plaintiff “will be
returned to work with no back pay.” Compl., Ex. B. There is no language in the Last Chance
Agreement that demonstrates that this “reinstatement” or “return[] to work” had an end date.
Moreover, none of the allegations about the surrounding circumstances, the situation of the
parties or the nature of the subject matter of the Last Chance Agreement suggest that the parties
intended to contract for a definite period. Thus the allegations in the complaint do not show that
the Last Chance Agreement, interpreted on its own, provides anything more than at-will
employment.
The Last Chance Agreement’s numerous specified grounds for plaintiff’s dismissal do
not show that the parties intended to overcome the at-will presumption for two reasons. First,
these conditions do not suggest the parties intended plaintiff’s employment for a definite period,
as required under Pennsylvania law to overcome the at-will presumption. Second, the
circumstances plaintiff alleges surrounded the creation of the Last Chance Agreement show only
that its conditions were meant to limit plaintiff’s rights under the CBA, not to give plaintiff more
rights than he had under the CBA. See Compl. ¶ 8 (explaining that plaintiff, the Union, and
Graphic Packaging entered the agreement “following an incident at the Valley Forge plant); Ex.

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B (describing the incident). Plaintiff alleges no facts showing that the Last Chance Agreement
precludes Graphic Packaging from firing plaintiff for other reasons not listed therein—the
allegations show merely that the company would have to abide by the CBA if it did so.
Thus, accepting as true plaintiff’s allegation that Graphic Packaging fired him because he
mislabeled a shipping package with the wrong batch tag, Compl. ¶ 9, and was motivated by its
aim of replacing him “with less expensive labor who would not be entitled to the salary and
benefits” plaintiff received, Compl. ¶ 23, and even accepting as true plaintiff’s conclusory
allegation that the mislabeling did not fall into one of the Agreement’s triggering conditions,
Compl. ¶ 25, and thus that Graphic Packaging fired him “without just cause,” Compl. ¶ 10,
plaintiff has not stated a claim for breach of the Last Chance Agreement. Rather, his allegations
only show that, to the extent Graphic Packaging owed him a duty not to fire him without just
cause, such duty was imposed under the CBA. See Compl. Ex. B (CBA) at 18 (explaining that
Graphic Packaging reserved the right to discharge employees “because of lack of work” or for
other reasons that are “justifiable”). Plaintiff does not state a claim for breach of the Last Chance
Agreement because his complaint does not show that the Last Chance Agreement, on its own,
gives plaintiff an independent right to more than at-will employment. 3

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Other courts to consider a claim for breach of a Last Chance Agreement have analyzed
whether the agreement was a product of collective bargaining and so preempted by § 301 of the
Labor Management Relations Act. As the Supreme Court explained, “when resolution of a statelaw claim is substantially dependent upon analysis of the terms of an agreement made between
the parties in a labor contract, that claim must either be treated as a § 301 claim . . . or dismissed
as pre-empted by federal labor-contract law.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,
220–221 (1985) (citations omitted) (analyzing a state-law tort action for bad-faith delay in
making disability benefit payments due under a CBA). The plaintiff in Allis-Chalmers Corp.
asserted rights “rooted in contract” and noted that “the bad-faith claim [the plaintiff] brings could
have been pleaded as a contract claim under § 301.” Id. Thus, the “complaint should have been
dismissed for failure to make use of the grievance procedure established in the collectivebargaining agreement . . . or dismissed as pre-empted by § 301.” Id. Applying this reasoning to
a Last Chance Agreement, the District of Massachusetts explained that such agreements are “part
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Additionally, plaintiff’s allegation that Graphic Packaging breach the covenant of good
faith and fair dealing does not keep his breach of contract claim alive. Compl. ¶ 24. “The duty
of ‘good faith’ has been defined as ‘[h]onesty in fact in the conduct or transaction concerned.’”
Somers v. Somers, 613 A.2d 1211, 1213 (Pa. Super. Ct. 1992), citing 13 Pa. Cons. Stat. § 1201.
Examples of a breach of this duty include “evasion of the spirit of the bargain, lack of diligence
and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms,
and interference with or failure to cooperate in the other party’s performance.” Id., citing
Restatement (Second) of Contracts, § 205(d). Although “a covenant of good faith and fair
dealing is implied in every contract,” Pennsylvania law does not recognize a breach of this

and parcel of collective bargaining agreements.” Connolly v. Boston Edison Co., No. 11849PBS, 2001 U.S. Dist. LEXIS 26414, *13–14 (D. Mass. Jan. 5, 2001) (analyzing a breach of
contract claim on summary judgment). The Connolly court held that § 301 “preempts claims of
breach of disciplinary agreements since they are part of the CBA and involve claims [that] are
‘founded directly on rights created by collective bargaining agreements.’” Id. at *14, quoting
Cotter v. DaimlerChrysler Corp., 87 F. Supp. 2d 746, 752 (E.D. Mich. 2000).
In addition to the District of Massachusetts, other courts have interpreted Allis-Chalmers
to require that a claim for breach of a last chance agreement be brought as a § 301/fair
representation claim. See Int’l Union of Operating Eng’rs Local 351 v. Cooper Natural Res.,
Inc., 163 F.3d 916, 919–20 (5th Cir. 1999), cert. denied, 528 U.S. 812 (1999) (holding that the
last chance agreement “formed a binding contract pursuant to the CBA” and must be treated as a
supplement to the CBA); Thomas v. LTV Corp., 39 F.3d 611, 616–18 (5th Cir. 1994) (analyzing
a probation agreement similar to the Last Chance Agreement here and holding that it qualified as
a CBA itself and so was preempted by § 301); Bakers Union Factory No. 326 v. ITT Cont’l
Baking Co., 749 F.2d 350, 354–55 (6th Cir. 1984) (interpreting agreements reached as part of
disciplinary process as formal contractual settlements of labor disputes that should be construed
as part of the CBA); Cotter, 87 F. Supp. 2d at 757 (“The Conditional Release Agreement must be
treated in the same manner as the collective bargaining agreement since it is a negotiated
agreement that supplements the CBA.”).
Although these cases addressed motions for summary judgment, they are relevant here
because a claim that is preempted should be dismissed under Rule 12(b)(6). Farina v. Nokia,
Inc., 625 F.3d 97, 115–134 (3d Cir. 2010) (affirming the district court’s dismissal of a complaint
on preemption grounds). However, as defendants have not raised preemption in their briefs, I
will not rely on that law here.
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covenant as an independent claim. Temple Univ. Hosp., Inc. v. Group Health, Inc., No. 05-102,
2006 U.S. Dist. LEXIS 1548, *16 (E.D. Pa. Jan. 12, 2006).
Plaintiff does not allege any facts supporting his claim for a breach of the duty of good
faith and fair dealing apart from the facts discussed above, which do not suggest bad faith.
Neither does he offer any legal support for his claim under the duty of good faith and fair
dealing. Thus, his breach of contract claim does not survive on the basis of this allegation.
Therefore, I will dismiss Count III with leave to amend to the extent plaintiff can allege
facts sufficient to state a claim.
An appropriate Order follows.

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