Vogel v. Cummins Engine Co.

971 F. Supp. 374, 1997 WL 400808
CourtDistrict Court, S.D. Indiana
DecidedJuly 11, 1997
DocketNo. IP 96-0571-C M/S
StatusPublished

This text of 971 F. Supp. 374 (Vogel v. Cummins Engine Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vogel v. Cummins Engine Co., 971 F. Supp. 374, 1997 WL 400808 (S.D. Ind. 1997).

Opinion

ORDER ON MOTION TO DISMISS

McKINNEY, District Judge.

Following an increasingly common pattern, the plaintiffs in this case have sued then-former employer, Cummins Engine Company, Inc. (“Cummins”), for an alleged breach of the terms of the collective bargaining agreement (“CBA”) between Cummins and the Diesel Workers Union (the “Union”). The complaint, which is currently framed in three counts,1 alleges violations of § 502 of the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132 (Count I), § 510 of ERISA, 29 U.S.C. § 1140 (Count II), and § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (“LMRA” or “ § 301”) (Count III). The pending motion to dismiss is directed only at Count III, which Cummins urges does not state a claim for relief for two reasons. First, the plaintiffs, who are former Cummins employees and Union members, did not first attempt to resolve their grievance in accordance with the procedures outlined in the CBA, and this failure to exhaust their contractual remedies means they have not satisfied the prerequisite for suing the employer directly. Second, an action against Cummins for breach of the CBA is barred by the applicable statute of limitations for claims arising under § 301, which is six months for a hybrid claim, and two years for a straightforward action.

Plaintiffs claim that theirs is a straightforward § 301 action, which does not require any exhaustion of contractual or intraunion remedies. Although they agree that the relevant statute of limitations for such actions is two years, they disagree about whether this action was untimely filed. According to the [378]*378plaintiffs, the cause of action accrued on April 25, 1994, which means the limitations period expired on April 25, 1996. The original complaint, filed April 25, 1996, was lodged against Cummins, the Union, and the trustee of Cummins’ retirement plan, Northern Trust Company. It contained two claims of ERISA violations against Cummins and Northern Trust, and one of a violation of § 301 against Cummins and the Union. Count III of the original complaint included allegations that Cummins breached the CBA and that the Union breached its duty of fair representation “by acquiescing in and facilitating” Cummins’ breach.

Subsequently, the plaintiffs amended the complaint and withdrew the claim against the Union for breach of the duty of fair representation. What remained was a count labeled “Breach of Fiduciary Duty to Third-Party Beneficiary,” which contained allegations that Cummins breached the CBA and the Union violated the plaintiffs’ rights as third-party beneficiaries under the CBA by acquiescing in and facilitating Cummins’ breach. In the third, and final, version of the complaint the plaintiffs repeat their allegation that Cummins breached the CBA by not recalling them before April 25, 1994, but have dropped any claims about the Union’s role in that breach.2 Plaintiffs are now in the position of defending against a motion to dismiss, filed April 21, 1997, by the only remaining defendant, Cummins.3 That motion calls for the Court to determine whether a straightforward § 301 action, subject to a two-year statute of limitations, may be brought by employees against their employer without first having to establish that the union breached its duty of fair representation. For the reasons given below, the Court finds that it cannot and GRANTS the pending motion to dismiss.

I. BACKGROUND

According to the Final Amended Complaint (“Complaint”), the eighty-nine named plaintiffs, and the remaining members of the class represented by the named plaintiffs, were employed by Cummins in the early to mid-1970s. Complt. ¶ 23. They were members of and represented by the defendant Union both during their employment and while they were on layoff. Complt. ¶25. During the period of their employment, the plaintiffs contributed to the Cummins retirement plan, the benefits of which were determined in relation to the number of years worked and the level of income of the employee at retirement. Id. ¶ 26. In 1990, the plaintiffs and class members were laid off by Cummins, but they still enjoyed recall rights under the then-current CBA. Id. ¶ 27. In April, 1993, Cummins and the Union negotiated and entered a new CBA, for the period from 1993 through 2004, but the plaintiffs did not participate in the union’s ratification process for the new CBA. Id. ¶ 28. A provision of that CBA stated that all current Cummins employees who were not on layoff would be guaranteed employment throughout the life of the CBA, and the employees on layoff would enjoy recall rights until April 25, 1994. Id. ¶ 29.

At the effective date of this new CBA, all of the plaintiffs and class members were on layoff, and were thus eligible for extended recall rights to April of 1994. None of these former employees, however, were ever recalled, and on April 26, 1994, they found themselves with no further employment rights at Cummins. Complt. ¶31. In addition, Cummins had hired new employees rather than recall the former employees, during the period in which the latter enjoyed recall rights. Id. ¶32. After he was not recalled by April 25, 1994, plaintiff Paul Vogel (“Vogel”) contacted Cummins to determine the effect on his pension benefits of the [379]*379loss of his employment rights. Id. ¶ 33. He was told that his benefits would be substantially reduced as a result of the termination of his recall rights and his employment with Cummins. Id. Vogel contacted many other former employees and formed a group that filed this action on April 25, 1996. Vogel and the plaintiffs claim that as a result of “concerted acts and omissions of Cummins and the Union,” they have suffered a loss of benefits and income, “destruction” of the quality of their lives, loss of self-esteem, and severe emotional distress. Id. ¶ 38.

According to the plaintiffs, Cummins has breached the CBA between itself and the Union by failing to recall the plaintiffs on or before April 25, 1994, and instead hiring new employees to replace them. Id. ¶ 45. Plaintiffs claim that they “now have standing to sue on their own behalf as third party beneficiaries to the contracts.” Id. ¶ 46. By filing this action, Vogel and the other plaintiffs seek to obtain, among other things, a preliminary and then a permanent injunction order reinstating them to the same or equivalent positions with Cummins, with the same or equivalent benefits. They also ask that Cummins pay the pension plan a sufficient sum to enable them to obtain retirement benefits equivalent to those they would have received if they had been recalled before April 25, 1994. In addition, they seek compensatory damages for all injuries, including emotional distress, pain and suffering, and an award of their costs and attorney fees.

II. STANDARDS

A. MOTION TO DISMISS

In assessing the propriety of a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), the Court accepts as true all well-pleaded factual allegations in the complaint and the inferences reasonably drawn from them.

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Bluebook (online)
971 F. Supp. 374, 1997 WL 400808, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vogel-v-cummins-engine-co-insd-1997.