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Mitchell v. United Parcel Service Inc.

decided: March 3, 1980.

WILLIAM MITCHELL, PLAINTIFF-APPELLANT,
v.
UNITED PARCEL SERVICE, INC., AND DEPARTMENT STORE AND WHOLESALE DRIVERS, WAREHOUSEMEN AND HELPERS, LOCAL UNION #177, DEFENDANTS-APPELLEES



Appeal from a judgment entered in the Eastern District of New York, Charles P. Sifton, District Judge, dismissing appellant's wrongful discharge complaint under § 301 of the Labor Management Relations Act as barred by the applicable New York statute of limitations. Reversed and remanded.

Before Kaufman, Chief Judge, Timbers, Circuit Judge, and Werker, District Judge.*fn*

Author: Timbers

Appellant William Mitchell appeals from a judgment entered in the Eastern District of New York, Charles P. Sifton, District Judge, dismissing his wrongful discharge complaint under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1976), as barred by the 90 day limitation period of § 7511 of the New York Civil Practice Law & Rules. The sole issue on appeal*fn1 is whether the district court erred in applying § 7511 to the instant action. We hold that it did.

I.

Appellant, a member of Local Union # 177 of the Department Store and Wholesale Drivers, Warehousemen and Helpers, was employed as a car washer by United Parcel Service, Inc. (UPS). In January 1977 appellant was discharged by UPS for dishonest acts, including "stealing time" and falsifying time cards. Appellant, who denied the charges against him, requested that his union file a grievance on his behalf contesting the discharge. As a member of Local Union # 177, the terms of appellant's employment, including grounds for discharge and grievance procedures, were governed by the collective bargaining agreement between UPS and Local Union # 177. Pursuant to this agreement, appellant's grievance was submitted to an arbitration panel the Joint Atlantic Area Parcel Grievance Committee for final resolution. Appellant was represented by his union at the hearing before this panel. On February 16, 1977 the arbitration panel denied appellant's grievance and upheld his discharge. According to the collective bargaining agreement, this decision was final and binding.

Seventeen months after the arbitral decision was rendered, appellant commenced an action under LMRA § 301*fn2 against his union and employer, alleging that UPS had breached the collective bargaining agreement by wrongfully discharging him and that Local Union # 177 had breached its statutory duty of fair representation by the manner in which it handled appellant's grievance. The district court granted appellees' motions for summary judgment, dismissing the complaint on the ground that the action was barred by the 90 day limitation period set forth in § 7511.*fn3

II.

There is no federal statute of limitations applicable to § 301 actions. As a result, the Supreme Court has held that "the timeliness of a § 301 suit . . . is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations." International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), AFL-CIO v. Hoosier Cardinal Corp., 383 U.S. 696, 704-05, 16 L. Ed. 2d 192, 86 S. Ct. 1107 (1966).

The district court, reasoning that "(t)he effect of any grant of relief . . . would be to vacate the determination of the arbitrators", held that the appropriate state statute of limitations was the 90 day period for "application(s) to vacate or modify an (arbitration) award". N.Y.Civ.Prac.Law § 7511 (McKinney 1963). We disagree. We hold that the limitation period which should have been applied is New York's six year period for actions alleging breach of contract. N.Y.Civ.Prac.Law § 213(2) (McKinney 1972).

In addressing the question of which New York statute of limitations should be applied in this case, we turn first to our decision in Abrams v. Carrier Corp., 434 F.2d 1234 (2 Cir. 1970), cert. denied, 401 U.S. 1009, 28 L. Ed. 2d 545, 91 S. Ct. 1253 (1971), where we held that:

"when a § 301 suit is brought against an employer alleging breach of the collective bargaining agreement in conjunction with a claim that the union breached its fair representation duty to pursue the employee's grievance, the same period of limitations should be applied to both claims. In the present case, the proper limitation period . . . is the six-year limitation set out in N.Y. CPLR § 213(2) for "an action upon a contractual obligation or liability express or implied.' " Id. at 1252-53 (footnote omitted).

The factual claims underlying the § 301 action in Abrams were the same as those in the instant case, namely, a wrongful discharge by the employer coupled with a bad faith failure by the union to represent the employee adequately in discharge proceedings. The only difference between Abrams and the instant case is that here the employee was terminated after his grievance was rejected at arbitration, whereas in Abrams the grievance was not taken to arbitration. Citing this difference, appellees urge that we apply a different statute of limitations to the § 301 action in this case than the six year statute of limitations which we applied to the § 301 action in Abrams. We do not believe that such a fractionalized approach to § 301 wrongful discharge actions is warranted.

In determining which state statute of limitations to apply to a federal cause of action, courts must characterize the action in the manner that "best effectuates the federal policy at issue." Butler v. Local Union 823, Int'l Brotherhood of Teamsters, etc., 514 F.2d 442, 446 (8 Cir. 1975); Charney v. Thomas, 372 F.2d 97, 100 (6 Cir. 1967). Appellees, pointing chiefly to the federal policy of according finality to arbitration awards and the federal goal of "relatively rapid disposition of labor disputes", Int'l Union, etc. v. Hoosier Cardinal Corp., supra, 383 U.S. at 707, argue that § 301 wrongful discharge actions commenced after arbitral decisions should be governed by the 90 day limitation period even if other § 301 wrongful discharge actions are governed by another statute.

We do not agree. The Supreme Court has made it clear that the federal policy of according finality to arbitration awards must yield to the conflicting federal policy of providing employees with the opportunity "to secure individual redress for damaging failure of the employer to abide by the (collective bargaining) contract." Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 571, 47 L. Ed. 2d 231, 96 S. Ct. 1048 (1976). In Hines, the Court granted discharged employees the right to sue employers and unions under § 301 despite the fact that the discharges had been upheld in "final" arbitration. In so doing, the Court rejected the argument that the federal policy of according finality to arbitration awards prevented employees from contesting arbitral decisions in § 301 actions. If we were to limit employee § 301 actions to a 90 day period ...


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