February 7, 2012: A Chicago-based local of the International Brotherhood of Teamsters can be held liable for wages lost by union members after the local failed to properly request negotiations with the employer under the wage-reopener clause of the bargaining unit's contract with the employer, the U.S. District Court for the Northern District of Illinois ruled (Begeske v. Int'l Bhd. of Teamsters Local 673, N.D. Ill., No. 09 CV 4009, 1/31/12).
Judge Robert M. Dow Jan. 31 ruled that Teamsters Local 673 breached its duty of fair representation under the Labor-Management Relations Act in its dealings with approximately two dozen union-represented truck drivers. The truck drivers are employed by UChicago Argonne LLC, which operates the Department of Energy's Argonne National Laboratory.
In a 17-page ruling on liability, Dow found Local 673's conduct exceeded “mere negligence’’ with respect to its duty of fair representation. While the case was unique, Dow said the union had “acted arbitrarily’’ when it failed to send a wage-reopener notice to Argonne.
As a result, the plaintiffs lost out on wage increases during 2009 and 2010. In line with this finding, Dow granted the plaintiffs summary judgment and ordered further proceedings on the questions of damages and attorneys' fees.
Attorney Edward M. Fox, who represented the plaintiffs, said the damages could prove substantial. Fox told Bloomberg BNA Feb. 6 that Dow would make a determination about future wages following briefings and testimony from expert witnesses. He said a jury trial likely would be convened to decide whether damages for emotional distress are appropriate.
“The future wages could be fairly large,’’ commented Fox, of Edward M. Fox & Associates in Chicago. “When you lose an annual raise of something between 2.8 percent and 3.2 percent, and those numbers are compounded until retirement, those numbers add up. We're arguing that they should be entitled to the increases for the rest of their anticipated working lives and I think we win that argument.’’
Union Reminded About Wage-Reopener Clause
According to court documents, the collective bargaining agreement between the drivers and Argonne contained a wage reopener clause for the two-year period following March 9, 2009. Both parties had the right to request negotiations through written notice prior to the deadline of Jan. 6, 2009.
On two separate occasions prior to the deadline, a union steward reminded the union's business agent to send a notice to the employer requesting negotiations on wages. Union officers, however, failed to provide such notice until Jan. 14, 2009, nine days after the deadline.
Later Argonne informed Local 673 it would have negotiated wages in good faith if the union had timely filed the request. Argonne typically negotiates increases during such reopener negotiations. Testimony showed such increases typically ranged between 2.8 percent and 3.2 percent annually.
For its part, Local 673 blamed its failure on a “clerical error.’’ In this regard, the union officers had been recently elected. They were relatively inexperienced with respect to a computer-based system designed to provide notices of expiring contracts. Moreover, the union contended the deadline came during an unusual period with respect to other contracts administered by the local.
Negligence or Arbitrary Action?
In his ruling, Dow said the question for the court was whether Local 673's conduct was mere negligence, suggesting no breach of the duty of fair representation, or “arbitrary action,’’ suggesting breach of the duty. In examining this question, Dow said it does not appear the local intended to discriminate against the plaintiffs, which would have suggested conduct beyond mere negligence.
But Dow also found that Local 673's conduct was more than a clerical error, and that its failure to track the plaintiffs' contract expiration term, “reflects arbitrariness in the way that contracts are handled.’’
“Specifically, because the system on which union officials relied to track important information on all union contracts functions effectively as to ones with deadlines arising during the middle or end of the month, but not as to contracts with deadlines in the early part of the month, each contract does not get the same attention consistent with the duty of fair representation. Most contracts get due attention, but as a result of a systemic failure of the union's own tracking procedures, the Argonne contract did not. This seems to be the very definition of arbitrariness,’’ the judge said.
Patrick Deady, who represented the union in the matter, said he could not comment on the decision. Deady is a partner with the Chicago firm Hogan Marren, Ltd.
For More Information
Text of the opinion is available here.