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McKee v. Transco Products Inc.

decided: April 24, 1989.


Appeal from judgment dismissing plaintiffs' complaint of unlawful discharge as untimely under the six-month limitations period established in DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151 (1983). Affirmed.

Feinberg, Pierce and John R. Brown,*fn* Circuit Judges.

Author: Feinberg

FEINBERG, Circuit Judge

Paul McKee and Thomas Husted appeal from a judgment of the United States District Court for the Southern District of New York, Charles L. Brieant, Ch. J., dismissing their complaint as untimely. The district court held that plaintiffs' action against their employer was governed by a six-month statute of limitations period under DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 103 S. Ct. 2281, 76 L. Ed. 2d 476 (1983). We agree that this case is subject to the six-month limitations period, and therefore affirm.

I. Background

Paul McKee and Thomas Husted are asbestos workers-insulators, and members of a local union affiliated with the International Association of Heat and Frost Insulators and Asbestos Workers (the international union). Transco Products, Inc. (Transco), whose principal place of business is in Chicago, Illinois, manufactures and installs insulation for power plants throughout the United States. Plaintiffs started working for Transco in January 1985 at a power station in Connecticut, and were employed according to the terms of an industry-wide collective bargaining agreement between the Connecticut Insulators Association, an employer group, and Local 33 of the international union. Although Transco has never been a member of the Connecticut Insulators Association, since 1963 it has employed union workers in Connecticut as a "national specialty operator." The district court concluded that Transco's Connecticut employees were covered by the terms of the collective bargaining agreement with Local 33 (the union) pursuant to a 1963 agreement between Transco and the international union. This agreement allowed Transco to employ members of the international union anywhere in the country, and the work was automatically covered by the existing union contract in effect where the project was located.

Appellants were fired on February 25, 1985 because they did not leave their work site after completion of an assignment. Transco claims that they were idling after completion of a job, and should have sought out the foreman for new work; appellants claim that they were fired unlawfully because Transco's work rules obligated them to remain in their work area and wait for the foreman to assign new work to them. McKee and Husted enlisted the union's help in getting their jobs back, but the union's job steward was not successful in raising the grievance and the union, apparently, did not press it sufficiently to satisfy plaintiffs. McKee filed an unfair labor practice charge against the union with the National Labor Relations Board in April 1985 for not processing the grievance, but then withdrew the charge in May 1985, allegedly because he feared retaliation from the union. No attempt was made, under the collective bargaining agreement, to submit plaintiffs' grievance to the industry-wide Trade Board.*fn1

More than three years after their discharge, in June 1988, plaintiffs filed this lawsuit against their former employer only, alleging that Transco breached the collective bargaining agreement. In their original complaint, plaintiffs asserted jurisdiction under both 29 U.S.C. § 185 (§ 301 of the Labor Management Relations Act (LMRA)) and 28 U.S.C. § 1332(a)(1) (diversity). In an amended complaint, however, plaintiffs claimed jurisdiction based solely on diversity of citizenship. Despite this attempt to transform their claim into a state breach of contract claim, the district court found that plaintiffs had submitted a well-pleaded allegation that their employment was governed by a labor contract and that their claim was properly asserted under § 301. Characterizing plaintiffs' claim as "hybrid," the district judge dismissed the complaint as untimely under the six-month statute of limitations borrowed from § 10(b) of the National Labor Relations Act (NLRA), 29 U.S.C. § 160(b), pursuant to DelCostello. This appeal followed.

II. Discussion

Appellants argue that this is a state contract action, and should be controlled by a six-year statute of limitations, the period provided by applicable state law for breach of contract actions. They also argue that even if the district court properly characterized the claim as hybrid, the court erred in applying the six-month limitations period under DelCostello because there was no binding arbitration for this dispute under the collective bargaining agreement.

A. Characterization of the Claim

Section 301 of the LMRA provides federal jurisdiction for causes of action based on violations of collective bargaining agreements, regardless of citizenship of the parties or amount in controversy. Individuals or unions may bring actions under this section. See Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562, 96 S. Ct. 1048, 47 L. Ed. 2d 231 (1976). Because plaintiffs claimed that Transco breached a collective bargaining agreement, we agree with the district court that § 301 was properly pled, and that appellants cannot now transform this case into simply a state breach of contract claim. In this respect, federal law preempts state law in this case. See Teamsters Local 174 v. Lucas Flour Co., 369 U.S. 95, 102, 82 S. Ct. 571, 7 L. Ed. 2d 593 (1962) ("incompatible doctrines of local law must give way to principles of federal labor law").

Claims asserted under § 301 are not governed by a specific statute of limitations, and therefore, courts reviewing claims under that section must borrow a limitations period. Usually, when federal statutes are silent on limitations periods, the court borrows a statute of limitations from state law. See Int'l Union, United Auto. Workers of America v. Hoosier Cardinal Corp., 383 U.S. 696, 703-04, 86 S. Ct. 1107, 16 L. Ed. 2d 192 (1966). However, there is a "narrow" exception to this "standard borrowing rule." Reed v. United Transp. Union, 488 U.S. 319, 109 S. Ct. 621, 626, 102 L. Ed. 2d 665 (1989). When "analogous state statutes of limitations . . . frustrate or significantly interfere with federal policies," id. at 627, a federal statute of limitations may be the more appropriate choice.

Appellants claim that even if their action is a § 301 claim, the district court erred in characterizing it as hybrid. A hybrid case is one in which the employee has a cause of action against both the employer and the union. The claim against the employer is that it violated the collective bargaining agreement. The claim against the union is that the union did not properly represent the employee in pressing his grievance against the employer. See Vaca v. Sipes, 386 U.S. 171, 185-86, 87 S. Ct. 903, 17 L. Ed. 2d 842 (1967). In DelCostello, the case upon which the district court relied for its holding in this case, the Supreme Court held that a hybrid claim against an employer for unlawful discharge under § 301 and against a union under an ...

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