Shannon Johnson, Respondent, vs. McQuay International, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-1554

 

Shannon Johnson,

Respondent,

 

vs.

 

McQuay International,

Appellant. 

 

Filed August 10, 2004

Affirmed

Randall, Judge

 

            Steele County District Court

No. C9-01-1174

 

Mark G. Stephenson, Stephenson & Sutcliffe, P.A., 1635 Greenview Drive Southwest, Rochester, MN  55902 (for respondent)

 

Donald R. McNeil, Stephen F. Buterin, Coleman, Hull & Van Vliet, PLLP, 8500 Normandale Lake Boulevard, Suite 2110, Minneapolis, MN  55437 (for appellant)

 

            Considered and decided by Wright, Presiding Judge, Randall, Judge, and Kalitowski, Judge.

U N P U B L I S H E D   O P I N I O N

RANDALL, Judge

After respondent's union declined to take his grievance against appellant to arbitration, respondent brought a wrongful termination action against appellant, alleging, in relevant part, that the union breached its duty of fair representation.  The district court concluded that respondent had been wrongfully terminated and that the union fulfilled its initial duty to grieve respondent but failed to pursue a "new" grievance based on appellant's expectation that he could be reinstated only if he returned to work on short notice.  The court awarded respondent lost wages and benefits.  On appeal from the denial of its motion for amended findings of fact and conclusions of law, appellant argues that the district court (1) lacked subject-matter jurisdiction over respondent's wrongful-termination suit because respondent failed to demonstrate that the union acted arbitrarily or in bad faith in not filing a grievance on respondent's behalf, and (2) abused its discretion in awarding respondent damages for lost fringe benefits.  We affirm.

FACTS

 

            Appellant McQuay International is a corporation located in Owatonna, and is a sheet-metal fabricator for heating, ventilating, and air-conditioning equipment.  On October 6, 2000, respondent Shannon Johnson began working for appellant as a sheet-metal brake-press operator.  Appellant operates under a union contract or collective bargaining agreement with Sheet Metal Workers' International Association AFL-CIO, Local 480 (the union).  The union contract covers all production employees, and respondent was a member of the union while appellant employed him. 

The union contract set forth, among other things, pay rates, shift schedules, vacation allowances, employee health benefits, and the employee retirement savings plan.  The contract also provided that appellant could terminate an employee for just cause, although this term was not defined in the contract.  The union contract set forth a five-step grievance procedure for resolving employment-related disputes.  The union and appellant also had written work rules, which provided specific consequences for violations of the rules.  Under these rules, an employee can receive a one-day suspension for leaving company premises without authorization during working time (Rule 17); and/or be terminated for leaving the work premises during working hours without authorization (Rule 32).  In addition to the written work rules, an informal points system was in place that assigned points for violations of the above written rules as well as for calling in sick, leaving work early, or not showing up for work. 

            On February 19, 2001, appellant promoted respondent to the position of team leader on the second shift.  As team leader, respondent was making $14.95 per hour, and was responsible for training and supervising other sheet-metal workers in his unit, in addition to his regular duties as a brake-press operator.  Respondent's and appellant's records both indicated that respondent had a perfect work record until March 15, 2001. 

Respondent testified that on Thursday, March 15, 2001, he reported for work at 3:30 or 4:00 p.m.  Before the shift began, respondent conducted a "shift meeting."[1]  According to respondent, after the shift meeting, appellant's production supervisor, Gary Furr, approached him and his co-worker, Dan Jarvey.  Respondent testified that he asked Furr if he could take the rest of the night off, and Furr told him, "[T]his [is not] a prison.  I can[not] keep you here and I can[not] tell you you can leave."  Respondent interpreted Furr's statements as permission to leave work early and left after his second break.  Respondent also stated that he did not see union steward David Vandevoort that evening.  Jarvey testified to the same version of events, and both he and respondent testified that leaving work early and taking "points" was common practice among employees. 

Furr testified that following the shift meeting, respondent approached him and asked if he could leave his shift early.  According to Furr, he told respondent that he could not leave because respondent had left work early the previous Thursday.  Furr testified that respondent approached him later that evening and again asked if he could leave work early.  Furr stated that he again told respondent he could not leave work early.  Approximately two hours later, at 11:00 p.m., Furr discovered that respondent had left work.  Vandevoort testified that after the shift meeting he heard Furr tell respondent he could not leave work early.[2] 

            Four days later, on March 19, 2001, appellant sent respondent written notice of termination for violating Rule 32 of the written work rules.  The notice stated that "[o]n Thursday 3/15/01 at 9:00 p.m., you left the company premises during working hours without authorization.  We issue this letter to inform you that you have been discharged as of 3/19/01 for violation of the above work rule [32]."  Respondent took the notice to Dan Elzen, who was his union representative and Local 480's business agent.  On March 22, 2001, respondent and Elzen filed a grievance, which claimed that respondent was terminated without just cause as required under the union contract.

            Appellant received the grievance on March 23, 2001.  A grievance meeting was held on April 2, between the representatives of the union's grievance committee and appellant.  Respondent attended the meeting with Elzen and two shop stewards for the union.  Bill Schlueter, the production manager, and Bruce Lake, the human resources director, attended the meeting on behalf of appellant.  Both respondent and the union representatives demanded that appellant reinstate respondent. 

            According to Elzen, the next morning, April 3, Schlueter called and informed him that appellant agreed to allow respondent to return to work as a brake-press operator but not team leader.  Respondent was to report for work at 5:00 p.m., and appellant agreed that respondent would not lose any seniority for the days he missed.  Elzen testified that he called respondent immediately, but was unable to reach him until sometime between 1:00 p.m. and 1:30 p.m.  When Elzen informed appellant that he could have his job back only if he reported to work that evening, respondent told him that it "would not work for him."  Elzen testified that respondent never told him he could not return to work because of daycare issues. 

            Respondent testified that it was Schlueter who called him at approximately 2:30 p.m. and told him he could return to work that evening as a brake-press operator. Respondent stated that he informed Schlueter that he could not work that evening because he could not find daycare.  According to respondent, Schlueter told him he would be fired if he did not report for work at 6:00 p.m.  Respondent testified that he called relatives, friends, and neighbors to find daycare, but was unsuccessful.  He stated that he called Schlueter back three times and Lake one time, in an attempt to receive more time to find daycare.

            Respondent did not report for work, and appellant withdrew its offer to reinstate respondent.  Respondent asked Elzen to take his grievance to arbitration.  Elzen testified that on April 3, he met with the grievance committee to discuss respondent's request for arbitration.  During the meeting, the committee noted that Vandevoort heard Furr tell respondent that he could not leave work early.  Based on this information, the grievance committee concluded that it could not, in good faith, take respondent's grievance to arbitration.  By letter dated April 6, 2001, Elzen notified respondent that the grievance committee declined to take his grievance to arbitration. 

Respondent sued appellant, alleging that he had been wrongfully terminated in violation of the union contract because the union breached its duty of fair representation by failing to investigate or conduct any inquiry into his "second" termination, the 5:00 to 6:00 p.m., April 3, 2001 issue.  After a bench trial on April 3, 2003, the district court made its findings of fact and conclusions of law.  The district court concluded that appellant wrongfully terminated respondent and that the union breached its duty of fair representation to respondent.   Although the court determined that respondent failed to make a reasonable and diligent search for employment following his termination, it concluded that respondent would not have found employment comparable to his wage and benefit package with appellant.  The district court awarded respondent $27,800 in damages, with $20,800 constituting lost wages and $7,000 constituting lost fringe benefits.  The court denied appellant's motion for amended findings.  This appeal follows.

D E C I S I O N

            In a bench trial, "[f]indings of fact . . . shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial judge to judge the credibility of the witnesses."  Minn. R. Civ. P. 52.01.  In applying Minn. R. Civ. P. 52.01, "we view the record in the light most favorable to the judgment of the district court."  Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999).  This court will not reverse the district court's judgment merely because we view the evidence differently.  Id.; see Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000) (stating "[t]hat the record might support findings other than those made by the [district] court does not show that the court's findings are defective").  Rather, the court's factual findings must be clearly erroneous or "manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole" to warrant reversal.  Id. (quotation omitted). 

            1.  Subject-Matter Jurisdiction

Appellant argues that the district court lacked subject-matter jurisdiction because the evidence at trial failed to establish that the union breached its duty of fair representation to respondent.  We disagree.  The trial judge heard the evidence, found a breach, and the record can support the trial judge.

            Questions of subject-matter jurisdiction are reviewed de novo.  Johnson v. Murray, 648 N.W.2d 664, 670 (Minn. 2002).  For employees represented by a union, an employee may bring suit against his employer for wrongful discharge when the conduct of the employer amounts to a repudiation of the contractual procedures for grievances and arbitration, and when the employee "has been prevented from exhausting his contractual remedies by the union's wrongful refusal to process the grievance."  Vaca v. Sipes, 386 U.S. 171, 184-85, 87 S. Ct. 903, 914 (1967).  A union's duty of fair representation exists if the union is the exclusive bargaining representative for its union members.  Id. at 177, 87 S. Ct. at 909-10.  Appellant agrees that the union had that duty.  Appellant simply argues that the union did not breach its duty.

            As an essential element of a claim for wrongful termination, the employee must establish that the union acted improperly in deciding not to appeal the employee's grievance to arbitration.  Paoletti v. Northern Bell Tel. Co., 370 N.W.2d 672, 675 (Minn. App. 1985) (citing Vaca, 386 U.S. at 186, 87 S. Ct. at 914), review denied (Minn. Sept. 26, 1985).  This showing requires the employee to prove that "the union as bargaining agent breached its duty of fair representation in its handling of the employee's grievance."  Vaca, 386 U.S. at 186, 87 S. Ct. at 914; see also Paoletti, 370 N.W.2d at 675.  The statutory duty of fair representation is breached when the union's conduct toward a member of the collective bargaining agreement is "arbitrary, discriminatory, or in bad faith."  Vaca, 386 U.S. at 190, 87 S. Ct. at 916. 

            The central dispute in this case revolves around respondent's second termination, when the union refused to pursue respondent's grievance to arbitration after successfully pursuing the first grievance.  Appellant argues that the district court lacked subject-matter jurisdiction to consider respondent's wrongful termination claim because the evidence failed to support the court's finding that the union breached its duty of fair representation by "arbitrarily and in bad faith" disregarding respondent's request to pursue arbitration.  See Paoletti, 370 N.W.2d at 675 (stating that "pleadings and proof of a breach of the union's duty of fair representation is with limited exceptions, a jurisdictional prerequisite to an employee's claim against his employer.").

            After the union adequately represented respondent with respect to his first termination, appellant offered to reinstate respondent if he returned to work within a few hours of receiving notification.  The district court found that the union demonstrated lack of good faith by failing to investigate or advocate on respondent's behalf after respondent was terminated for failing to return to work on such short notice.  The court found that appellant and the union knew about respondent's daycare issues.  At trial, respondent testified that he informed two of appellant's representatives that he was unable to return to work that night because he could not find daycare for his two children.  The union representative testified that respondent told him only that returning to work on such short notice "would not work for him" and that respondent never informed him of his daycare problems.  The district court accepted respondent's version of his explanation for not returning to work.  Minn. R. Civ. P. 52.01 (stating that "due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses."). 

            Even if we did not accept respondent's version of the events, our ultimate conclusion would be that respondent did not receive good-faith representation from his union and was entitled to sue in state court.  The district court made extensive and detailed findings that listed other grounds for its decision.  The court stated that:

The lack of good faith by the union can be seen in its lack of investigation or advocacy after [respondent] was terminated for failing to appear on such short notice.  The union letter to [respondent] declining to pursue the matter is totally devoid of analysis.  Although the union felt that "[we] simply felt that we cannot with our present contract language," there was no discussion of what contract language was at issue.  . . .

           

Further, [appellant] and [the] union seem to be in a cozy relationship, acting to meet their own institutional goals. . . . The union was not enforcing the contract for the benefit of its members.  Mr. Elzen, on direct examination, talked about how "we did this. ." or "we did that. ." meaning that the union and [appellant] made joint decisions, even if it meant that the union would ignore the contracts rights of its members. . . .

 

Furthermore, in looking at the timelines required for the grievance procedure under Article III and Article VII, there are strict timelines in which written notice and answers must be given.  From the record in this case, both the union and [appellant] appeared to ignore the timelines or written requirement as set forth in the contract. . . .

 

On April 9, 2001, a notice was sent by Mr. Lake to Dan Elzen stating that [appellant] had offered [respondent] his job as a break operator on second shift and stating that he had to return to work immediately.  This document had signature spaces available for the union and [appellant], but it was never signed.  The document did not directly answer the grievance.

                                               

            The record supports the district court's findings.  As a member of a union, a claimant has the right to have at least one avenue of support.  Normally, it is the collective bargaining agreement, but if the union breaches its duty to a member by a failure to represent in good faith, a union member cannot be denied an alternative remedy.  The member has to be allowed to sue in court.  We conclude that the district court had jurisdiction to consider respondent's wrongful termination claim.  Respondent proved the breach of duty of fair representation.  See Vaca, 386 U.S. 185-88, 87 S. Ct. at 914-16 (concluding that an employee may bring a wrongful termination action in state court provided the employee can prove that the union breached its duty of fair representation).

2.      Damage Award

Appellant argues that the record does not support the district court's damage award for lost fringe benefits.  In reviewing a damage award, this court must consider the evidence in the light most favorable to the verdict.  Rayford v. Metro. Transit Comm'n, 379 N.W.2d 161, 165 (Minn. App. 1985), review denied (Minn. Feb. 14, 1986).  A reviewing court will not disturb a damage award "unless its failure to do so would be shocking or would result in plain injustice."  Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 199 (Minn. 1986).  An award of damages is excessive when it "so greatly exceed[s] what is adequate as to be accountable on no other basis than passion and prejudice."  Dallum v. Farmers Union Cent. Exch., Inc., 462 N.W.2d 608, 614 (Minn. App. 1990) (quotation omitted), review denied (Minn. Jan. 14, 1991).  "The trial court's determination on this point will only be disturbed for a clear abuse of discretion."  Id. (quotation omitted). 

            Damages for a breach of contract claim are measured by awarding "compensation which an employee who has been wrongfully discharged would have received had the contract been carried out according to its terms."  Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701, 709 (Minn. 1992) (quotation omitted).  A wrongfully discharged employee may also receive an award for wages which the employee would have earned after the date of trial had the contract been carried out according to its terms, or front pay.  Gilmore v. Control Data Corp., 442 N.W.2d 835, 838-89 (Minn. App. 1989) (court upheld jury award of $80,000 even though lost wages to date of trial were $65,000 because no limitation that damages extend only to date of trial).  Factors to consider in an award of front pay damages are "reasonably objective evidence as to the feasibility of reinstatement, the employee's prospect for future employment, the certainty of what the employee's income would have been absent the breach, and the length of time for which front pay is sought."  Feges, 483 N.W.2d at 710.

            Here, the court awarded respondent a total of $27,800, including $20,800 in lost pay and $7,000 in lost fringe benefits.  The court based its award on what respondent, in four years, would have earned with a similar wage and benefit package at the time he was wrongfully terminated.  Appellant argues that the district court's fringe benefit award was speculative and not supported by the record because, although the court gave a breakdown of how it arrived at the pay damage award, it did not do the same breakdown of how it calculated the $7,000 lost fringe benefits award.  That breakdown could have helped, but was not essential.  The court had evidence in the union contract that specified the amount of benefits received.  Thus, the award is supported by the record and is not excessive.

            We conclude that the district court did not abuse its discretion by awarding respondent $7,000 in lost fringe benefits.                                                                                                                                                              

            Affirmed.

[1] Shift meetings are held once a month to keep plant personnel informed of production changes, equipment issues, new hires, and any other developments that may affect the plant and its personnel in the upcoming month. 

 

[2] Vandevoort was later asked by a chief union steward to write down what happened that night.  The note written by Vandevoort is consistent with his testimony.