Unpublished Disposition, 867 F.2d 612 (9th Cir. 1987)

MEMORANDUM^* 

Plaintiffs-appellants, Stephen F. Bertucci, et al., appeal from the order of the district court granting summary judgment to defendant-appellee General Teamsters Local No. 174 (the union) on appellants' duty of fair representation claims. We affirm.

BACKGROUND

This is an appeal by a group of eleven former warehousemen and drivers ("appellants") who brought suit against their union ("union") for breach of the duty of fair representation ("DFR"). The union represented the appellants in a strike against their employer, Coast Transfer Company ("Coast"), in 1985 and 1986. Appellants worked for Coast at the J.C. Penney's Distribution Center. The union represented two bargaining units at Coast, the drivers and the warehousemen.

The Collective Bargaining Agreement for both groups expired in 1985. The drivers' contract expired earlier. Coast asked the drivers to take cuts in wages and benefits during contract negotiations. The drivers voted to sanction a strike, and the union promised that there would be no strike without a second vote. Negotiations for the drivers ceased, Coast implemented its last proposal, and the drivers continued to work at a reduced wage and benefit level.

Negotiations for the warehousemen began in the fall of 1985. In early October, a meeting was held with the warehousemen. At this meeting Coast's proposal, which included wage and benefit cuts, was discussed. Coast's proposal was unanimously rejected. The union requested and received strike authorization from the warehousemen, but the employees were told that they would have the opportunity to have a second vote before a strike.

The last negotiation session between Coast and the union was on Friday, October 11, 1985. Coast continued to insist on wage and benefit cuts as part of a proposal presented to the union. Union secretary-treasurer Triplett insisted that such cuts must also be approved by J.C. Penney's ("Penneys") in accordance with his theory of joint employer status. When the meeting broke up, the union was not planning to strike, nor was there any indication that this was the last negotiation session. However, later that evening, Coast announced that it was implementing its proposal. Warehousemen told Mendenhall, the union's business agent, that they were being called and ordered to come to work on Saturday to unload containers. The union leaders viewed this as strike preparation activity by Coast because normally only two warehouse employees worked on weekends. The sudden action by Coast shocked the union. The union had planned for more negotiations.

Triplett instructed Mendenhall to contact as many of the warehouse bargaining unit members as possible on the night of October 11, and to poll them regarding a strike. Unless overwhelming objections were received, a strike would be called for Saturday morning, October 12. When Mendenhall left the union office he asked Doug Seavers, a warehouse employee, to continue phoning members.

It is unclear how many of the eighteen warehousemen were actually called. Five men talked with Mendenhall that evening. Seven men were not home. However, some of these seven men received messages or phone calls from other members. It is also unclear what was said during the phone conversations. According to the appellants, some members were just told that the union was on strike or that a majority had voted to strike.

In any case, picketing of Coast and Penneys began on Saturday, October 12. On the following Monday Mendenhall met with the drivers to convince them to honor the picket line established by the warehousemen. A majority of the drivers agreed. Coast hired temporary replacements, but stated that anyone could return to work until permanent replacements were in place. Some men chose to cross the picket line and return to work. The union filed an unfair labor practice ("ULP") charge with the NLRB against Penneys for refusal to bargain on a theory that Coast and Penneys were joint employers.

Coast filed an election petition with the NLRB on October 29. During a negotiation session on October 30, Coast announced that the employees had been permanently replaced. On November 5, 1985, the union filed an ULP charge with the NLRB on the theory that Coast, pursuant to the collective bargaining agreement, could not legally replace the striking employees. On December 18, 1985, the NLRB dismissed the charge and the union appealed.

On November 8, 1985, the district court granted the NLRB an injunction prohibiting the picketing of Penneys on a joint employer theory. On November 14, the union made an unconditional offer to return to work, which Coast rejected. The union once again filed an ULP charge against Coast based on its refusal to reinstate the employees. The picket lines were withdrawn pending an ALJ decision. The strikers continued to receive strike benefits even though picketing had ceased.

In January 1986, fearing a lawsuit from Penneys based on illegal picketing, the union settled their dispute with Penneys before the ALJ rendered a decision. However, the union and Penneys stipulated that the co-employer issue would be determined in a companion case pending before the NLRB. In May 1986, the regional director of the NLRB determined that joint employer status did not exist. On June 19, 1986, the NLRB denied a request for review.

In late January 1986, a new union secretary-treasurer, McNaughton, took office replacing Triplett. On February 19, McNaughton told the strikers that he wanted to call off the strike, but agreed to extend the strike after being assured that the warehousemen would resume picketing. Shortly thereafter, the union received complaints that pickets were committing acts of violence. On March 21, 1986, the strike was called off because it was ineffective and because of striker misconduct.

On June 18, 1986 the appellants filed an ULP charge with the NLRB against the union for breach of the DFR. On June 19, 1986, appellants filed this lawsuit for breach of the DFR against the union. The complaint asked for a stay of the legal proceedings pending a decision of the NLRB. On August 4, 1986, the regional director of the NLRB refused to issue a complaint and the appellants appealed. The NLRB denied the appeal on August 28, 1986. The Board found that the union had not acted in bad faith and many of the claims were barred by the six-month statute of limitations.

In June 1987 the union and the appellants filed cross motions for summary judgment. The appellants contended that the union breached the DFR for several reasons. (1) The union failed to warn them that they could be permanently replaced just for striking. (2) The union misrepresented that a majority of the warehousemen had voted a second time for a strike. (3) The union "sacrificed" the appellants to obtain objectives for others in the industry. The union contended that its actions did not breach the DFR.

On August 18, 1987 the district court granted the union's motion for summary judgment and denied the appellants' motion for summary judgment. The district court held that the union did not breach the DFR. The union had no duty to warn the appellants of the risk of permanent replacement. The appellants were not harmed by the misrepresentation of the strike vote because any member who opposed the strike could have crossed the picket line. No evidence existed to support the appellants' contention that they had been "sacrificed" for others in the industry. Furthermore, the appellants' suit was not timely because the statute of limitations was not tolled during the NLRB proceedings and the appellants should have known of the alleged union misconduct sooner.

STATUTE OF LIMITATIONS

Both the appellants and the union agree that the six-month statute of limitations of section 10(b) of the National Labor Relations Act, as amended, 29 U.S.C.A. Sec. 160(b) governs the appellants' claims. Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 172 (1983); Conley v. International Brotherhood of Electrical Workers, 810 F.2d 913, 915 (9th Cir. 1987). The parties disagree on the time of accrual of each cause of action. They also have opposing views on the question of tolling of the statute of limitations. "Where the facts are not in dispute the date of accrual of a statute of limitations is a question of law reviewed de novo." Galindo v. Stoody Co., 793 F.2d 1502, 1508 (9th Cir. 1986).

The appellants contend that their claims did not accrue until they knew or should have known that the union breached its DFR. They argue that (1) they did not know the implications of being permanently replaced until the March 1986 meeting when the strike was called off and the ULP charge against Penneys was settled; (2) they did not know that a majority of the workers did not vote for the strike until March 1986; and (3) they did not know that they had been "sacrificed" for others in the industry until March 1986 when a union attorney told them the strike was a no-win situation. Appellants also contend that the ULP charges filed with the NLRB against Coast, Penneys and the union tolled the statute of limitations. Finally, appellants contend that principles of equitable estoppel prevent the union from asserting the statute of limitations as a defense.

The appellants filed their complaint on June 19, 1986. Therefore, if the appellants knew or should have known of the union's breach prior to December 19, 1985, their action is time barred unless the statute of limitations was tolled or equitable estoppel applies.

A DFR claim does not accrue and the statute of limitations does not begin to run until the employee discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged breach of the DFR. Galindo, 793 F.2d at 1509. We noted in Galindo that, " [a] reasoned analysis of the question when a duty of fair representation claim accrues must focus on the context in which the claim arose." Id. at 1509.

In Galindo a union member brought an action against his union for breach of the DFR after he was laid off by the employer because the union failed to inform the employer that the employee was a union steward. Under the collective bargaining agreement union stewards had more seniority and were to be laid off last. Id. at 1506. We held that the employee knew or should have known about the alleged breach no later than the day he was laid off or even earlier when his name appeared on the list of employees to be laid off. Id. at 1509.

Here, the union contends the appellants knew or should have known of the risk of permanent replacement on October 30, 1985, when the employer informed them they had been permanently replaced, or on November 14, 1985, when Coast refused the union's unconditional offer to return to work. Although some of the appellants were aware that they could lose their jobs if they went out on strike, others were not aware of this. Nevertheless, when the appellants were permanently replaced and the employer refused the union's unconditional offer to return to work, the risk of permanent replacement became a reality. The appellants knew or should have known at that time that the union had not warned them of the risk of permanent replacement.

The appellants argue that although they were told they were "permanently replaced", they did not know this meant that they had permanently lost their jobs because the union told them that Coast's action violated Section 18.1 of the collective bargaining agreement.¹  Therefore, according to the appellants, they were unaware that Coast could legally replace them until March 1986 when the strike was called off.

The problem with this argument is that the appellants should have known that, if the union was wrong and the NLRB decided the ULP charge in Coast's favor, the strikers would not be reinstated with back pay. Therefore, they should have been aware when they were told by their employer that they were permanently replaced and when Coast refused their unconditional offer to return to work that the risk of losing their jobs might become a reality if the NLRB ruled against the union's position.

Furthermore, the knowledge that they were being permanently replaced, combined with the refusal of their offer to return to work, should have made them aware that the union did not warn them of the risk that they would lose their jobs by striking. In addition, assuming that appellants did not understand the possibility that they could be permanently replaced at the time they went on strike, with the exercise of reasonable diligence they could have been informed of the legal effect on their job security as a result of the strike as soon as they were permanently replaced and Coast rejected the union's unconditional offer to return to work. Both of these events took place prior to December 19, 1985. Accordingly, their claim of a breach of the DFR due to a failure to warn is time barred.

Similarly, assuming the union falsely represented that a majority of the membership had voted for a strike on October 11, 1985, the appellants should have known of this misrepresentation by December 19, 1985. As of October 12, 1985 the men were on strike. Thereafter, the men were either on the picket line or they were not picketing or working. The men knew who had decided to cross the picket line and who did not cross the picket line. Through the exercise of reasonable diligence, the men could have talked with one another and discovered whether a majority had voted to go on strike. Therefore, this claim is also time barred.

The appellants further contend the union breached the DFR when the union "sacrificed the [appellants] for the sake of 'precedent' for other units in the industry." This claim appears to be based on a statement the union made prior to the strike when it stated that a win on the joint employer issue would benefit the industry. Thus, appellants were aware prior to the strike that the union was attempting to set a joint employer precedent in the industry. Therefore, appellants were on notice of their claim prior to December 19, 1985. This claim is also time barred.

Appellants also contend that the union told them that they would be reinstated with back pay as a result of the ULP charges against Coast and Penneys and that these proceedings could have made them "whole" so the statute of limitations should not have accrued until the ULP proceedings were resolved. Appellants argue that even if they knew of the union's breach prior to December 19, 1985, their cause of action did not accrue until the strike was over in March 1986 because until that date damages were not certain to occur or were speculative. Appellants did not cite any case supporting this contention.

The closest case we have found is Acri v. International Association of Machinists, 781 F.2d 1393, 1396 (9th Cir.) cert. denied, 479 U.S. 816 (1986). In Acri, the union members sued the union for a breach of the DFR alleging the union had misrepresented that the employer had removed its cap on severance pay when the employer had not. Id. at 1395. The union members became aware of the misrepresentation when they received copies of the new collective bargaining agreement. However, the union members had not suffered any injury at that time. The injury occurred and the members' cause of action accrued when the plant closed and the members were told there would be a limit on severance pay. Id. at 1396.

We set forth a different test for accrual of the statute of limitations in Acri. We stated, "a cause of action does not accrue at the time plaintiff becomes aware of the wrong if, at that time, the plaintiff's damages are not certain to occur or too speculative to be proven." Id.

There is language in Acri, however, that appears to make our holding in that case inapplicable to the instant matter. We stated in Acri:

The district court was correct in a practical sense in that a determination by the arbitrator that the limit on severance pay had been removed would have made this duty of fair representation action unnecessary. However, this concern does not necessitate a rule postponing the accrual of duty of fair representation claims until the conclusion of related arbitration proceedings in all cases. If the district court finds that a pending arbitration decision may eliminate the need to litigate a duty of fair representation claim in a particular case, the district court can stay the court proceedings until the arbitrator renders a decision.

Id. at 1396 n. 1 (emphasis in original).

Applying this analysis to the instant matter, as soon as appellants knew of the alleged breach they could have filed their claim against the union in the district court with a request that the proceedings be stayed until the ULP charges pending before the NLRB against Coast and Penneys were decided. It is clear that appellants' attorney was aware of this option because the complaint in this action requests that the district court stay the proceedings pending determination of the ULP charges filed with the NLRB. Appellants' DFR claims are also time barred under our reasoning in Acri.

B. Tolling of the Statute of Limitations.

The appellants contend that the filing of ULP charges with the NLRB against Coast, Penneys, and the union should toll the statute of limitations. The tolling cases distinguish between grievance procedures provided in the collective bargaining agreement and ULP charges filed with the NLRB. When an employee's DFR claim is not based on how the union handled a grievance, the employee's good faith attempt to exhaust contractual remedies will toll the statute of limitations. Galindo, 793 F.2d at 1510 (citing Adkins v. International Union of Electrical Workers, 769 F.2d 330, 335 (6th Cir. 1985)). This rule is based on the policy in favor of non-judicial resolution of labor disputes. 793 F.2d at 1510.

On the other hand, NLRB proceedings do not toll the statute of limitations. Conley, 810 F.2d at 916 (citing Adkins, 769 F.2d at 335-36); accord Pejic v. Hughes Helicopters, Inc., 840 F.2d 667, 671 (9th Cir. 1988). An NLRB action and a Section 301 action for breach of the DFR are parallel avenues of relief. The filing of an NLRB proceeding is optional. 810 F.2d at 916. To allow tolling pending the outcome of NLRB proceedings "would frustrate the National policy of prompt resolution of labor disputes." Id. Accordingly, the appellants' ULP charges against Coast, Penneys and the union did not toll the statute of limitations.

The appellants contend that the union should be equitable estopped from asserting the statute of limitations as a defense because the union continued "to mislead the men into pursuing the strike." The appellants argue the union induced them to go on strike and encouraged them to stay on strike by claiming they would be reinstated with back pay.

In Atkins v. Union Pacific Railroad Co., 753 F.2d 776, 777 (9th Cir. 1985), we addressed the question of the application of equitable estoppel to the statute of limitations. We stated:

In order to assert successfully the doctrine of equitable estoppel, a plaintiff must show that the defendant's conduct was so misleading as to have caused the plaintiff's failure to file suit. More to the point, equitable estoppel will not apply to a claim [of estoppel to assert the statute of limitations] unless the plaintiff shows either (1) an affirmative statement that the statutory period to bring the action was longer than it actually was; (2) promises to make a better settlement of the claim if plaintiff did not bring the threatened suit; or (3) similar representations or conduct on the part of the defendants.

Id. (citations omitted).

Appellants have failed to demonstrate that the union misrepresented the length of the statute of limitations period or promised to make a better settlement in return for a promise not to sue, or engaged in similar conduct or made equivalent statements. The record indicates that the union in good faith believed that the men could not be permanently replaced due to section 18.1 of the collective bargaining agreement. The record also shows that the union, as well as many of the appellants, honestly believed that Coast and Penneys were joint employers. Therefore, because none of the union's acts were calculated to mislead appellants concerning the applicable statute of limitations, equitable estoppel does not apply.

We conclude that each of appellants' claims are barred by the statute of limitations. Therefore, the judgment is AFFIRMED.