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ELKES v. B'NAI B'RITH INTL.

June 4, 1982

Mr. Albert Z. ELKES, Plaintiff,
v.
B'NAI B'RITH INTERNATIONAL, Defendant



The opinion of the court was delivered by: FLANNERY

This matter is before the court on defendant's motion for summary judgment. Defendant contends that section 301(a) of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, compels dismissal of this suit because plaintiff has not exhausted the exclusive arbitration process for resolving his entitlement to severance pay. The court agrees.

 Background

 Plaintiff's complaint seeks $ 36,500 in severance pay which plaintiff claims he is owed under the terms of a collective bargaining agreement between defendant (BBI) and the Executive Staff Association of B'nai B'rith and B'nai B'rith women (Staff Association). The complaint is grounded in diversity jurisdiction.

 Defendant's motion for summary judgment contends that plaintiff's invocation of diversity jurisdiction represents an illegitimate effort to have this court apply local contract law principles to plaintiff's claim for severance pay. Instead, defendant urges, plaintiff's claim stems from a collective bargaining agreement and, therefore, the pertinent substantive law is dictated by section 301(a) of the LMRA. Under principles emanating from section 301(a), if a collective bargaining agreement establishes an exclusive method for arbitrating disputes, the employee must exhaust those procedures before initiating suit in federal or state court. See Hines v. Anchor Motor Freight, 424 U.S. 554, 559, 96 S. Ct. 1048, 1053, 47 L. Ed. 2d 231 (1976); Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S. Ct. 614, 13 L. Ed. 2d 580 (1965). If a complaining employee "resorts to the courts before the grievance procedures have been fully exhausted, the employer may well defend on the ground that the exclusive remedies provided by such a contract have not been exhausted." Vaca v. Sipes, 386 U.S. 171, 184, 87 S. Ct. 903, 913, 17 L. Ed. 2d 842 (1967). An exception to this general rule applies when the union has complete authority to trigger the arbitration procedures. If the union wrongfully refuses to bring the employee's grievance to arbitration, the employer cannot assert as a defense to a breach of contract suit that the employee has failed to exhaust administrative remedies. Id., at 185, 87 S. Ct. at 914. A union's wrongful refusal to bring a case to arbitration is not proven by a simple demonstration that the employee's grievance is meritorious; rather, in order to document that the union has breached its duty of fair representation, the employee must persuade the court that the union's decision was "arbitrary" or involved "bad-faith conduct". Id., at 193, 87 S. Ct. at 918.

 The collective bargaining agreement at issue, according to defendant, incorporates an exclusive dispute resolution mechanism. In particular, the 1978 agreement provides that grievances against BBI may proceed to binding arbitration only with the assistance of the Staff Association. Under Art. XXII(4) of the agreement, the Staff Association is required to process a grievance, if "the grievance has merit." When plaintiff presented his grievance to the Executive Committee of the Staff Association, it declined to present the grievance to BBI for arbitration. Plaintiff did not appeal this decision to the full membership of the SA, as he was entitled to do. Accordingly, defendant maintains, plaintiff has failed to exhaust his internal arbitration remedies. *fn1" Since plaintiff nowhere alleges that this failure was due to the union's breach of its duty of fair representation, this suit must be dismissed.

 Plaintiff's opposition to the motion for summary judgment focuses upon the applicability of section 301(a) jurisprudence to this dispute. Plaintiff contends that the SA does not qualify as a "labor organization representing employees" within the meaning of section 301(a) and, therefore, the exhaustion bar flowing from that provision is not material. Because there is dicta in this Circuit suggesting that if an organization's membership is composed entirely of managerial and supervisory personnel, section 301(a) is not applicable, see International Organization of Masters, Mates & Pilots of America v. NLRB, 122 U.S. App. D.C. 74, 351 F.2d 771 (D.C.Cir.1965), the court authorized discovery into the composition of the Staff Association. That discovery has now been completed.

 Discussion

 As the preceding discourse reveals, the core issue in this case is whether the SA is a "labor organization representing employees" within the coverage of section 301(a) of the LMRA. If it is, then federal law necessitates dismissal of this action by virtue of plaintiff's failure to exhaust exclusive arbitration remedies. If the SA is not covered by section 301, then local law will apply under ordinary diversity jurisdiction principles, and there may be no exhaustion bar to plaintiff's claims.

 The LMRA of 1947 was preceded by the National Labor Relations Act (NLRA). When the LMRA was enacted, it incorporated various provisions of the NLRA. These former provisions of the NLRA became Title I of the LMRA. The remaining Titles of the LMRA contain entirely new directives. Section 301(a) is contained in Title III of the LMRA and provides:

 
Suit for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... may be brought in any District Court in the United States....

 29 U.S.C. § 185(a) (Emphasis supplied).

 Title V of the LMRA provides that the definitions of the terms "employee," "labor organization," and "supervisor," as used in Title III, are those enumerated in Title I, the revised NLRA. 29 U.S.C. § 142(3). Title I, in turn, provides that the term "employee ... shall include any employee ... but shall not include ... any individual employed as a supervisor...." 29 U.S.C. § 152(3). The term "supervisor" is defined as

 
any individual having authority, in the interest of the employer to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing, the exercise of such authority is ...

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