White v. Local 13000

• Court: Court of Appeals for the Third Circuit
• Decided: June 4, 2004
• Docket: 00-1816
• Status: Published

Opinion

Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit

6-4-2004

White v. Local 13000 Precedential or Non-Precedential: Precedential

Docket No. 00-1816

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Recommended Citation "White v. Local 13000" (2004). 2004 Decisions. Paper 566. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/566

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. PRECEDENTIAL Counsel for Appellant

UNITED STATES COURT OF RICHARD H. MARKOW ITZ APPEALS NANCY A. WALKER FOR THE THIRD CIRCUIT MARKOWITZ & RICHMAN 121 South Broad Street 1100 North American Building No. 00-1816 Philadelphia, PA 19107

JAMES B. COPPESS COREY D. WHITE, 815 Sixteenth Street, N.W. Washington, D.C. 20006 Appellant v. Counsel for Appellees

COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, LOCAL 13000 OPINION OF THE COURT

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE ALITO, Circuit Judge: EASTERN DISTRICT OF Corey D. White (“White”) appeals PENNSYLVANIA an order of the United States District Court for the Eastern District of Pennsylvania (Dist. Court No. 99-cv-04791) granting summary judgment in favor of the District Court Judge: Jan E. DuBois Communications Workers of America and the Communications Workers of America Local 1300 (collectively the “CWA”). For Submitted Under Third Circuit LAR the reasons stated below, we affirm. 34.1(a) I. September 15, 2003 White began employment with Bell Before: ALITO, AMBRO, and Atlantic-Pennsylvania, Inc. (“Bell”) in CHERTOFF, Circuit Judges. 1986. The CWA and Bell are parties to a collective bargaining agreement (the (Opinion Filed: June 4, 2004) “CBA”), two provisions of which are pertinent to the present appeal. 1 First, the DOUGLAS E. GERSHUNY 26 So. Pennsylvania Avenue P.O. Box 58 1 Unfortunately, the CBA is not in the Atlantic City, NJ 08404-0058 record, but the parties agree on the CBA provides that the CWA is the In 1988, in order to comply with exclusive representative of the employees Beck, the CWA adopted a procedure (the in White’s workplace in negotiations with “Opt-Out Procedure”) under which Bell management. Second, the CBA employees who work in agency shops and contains an “agency shop” provision,2 are represented by the CWA may notify which requires all employees in White’s the CWA during May of a given year that workplace, as a condition of continued they intend to refrain from paying the employment, to pay dues to the CWA, portion of their compulsory dues that the regardless of whether they choose to join CWA does not mean to use for labor- the union. Accordingly, despite the fact management negotiations. Employees that White never became a member of the availing themselves of the Opt-Out CWA, he was required to pay union dues. Procedure are not charged for this portion of the union dues for the period beginning The Supreme Court has held that in the July after notification and ending in under Section 8(a)(3) of the NLRA, 29 the June of the following year.3 After a U.S.C. § 158(a)(3), a plaintiff who works year, the CWA resumes charging the full in an agency shop may be required to pay amount of dues unless employees again only those fees “necessary to performing opt out. The CWA informs Bell the duties of an exclusive representative of employees of the Opt-Out Procedure by the employees in dealing with the placing a notice in its newsletter, the CWA employer on labor-management issues.” News. The CWA publishes ten issues of Communications Workers of Am. v. Beck, the CWA News per year and inserts the 487 U.S. 735, 762-63 (1988). Since notice in one such issue. White’s workplace was an agency shop, he was entitled under Beck to refrain from At all relevant times, the CWA paying the portion of his union dues that relied on information supplied by Bell to the CWA did not intend to use for determine the addresses of the Bell negotiating with management. employees whom it represented, and the CWA sent the CWA News to those addresses. It is undisputed that, between content of the relevant provisions. 1988 and 1997, Bell did not give the CWA White’s correct address. Consequently, 2 See Kolinske v. Lubbers, 712 F.2d 471, 472 n.2 (D.C. Cir. 1983) (“A type of 3 union security clause, an agency shop For example, if a non-CWA member clause requires all employees covered by employed by a CWA agency shop the collective bargaining agreement to notifies the CWA in May of 2004 that he pay dues or equivalent fees to the union, does not wish to pay non-bargaining- but does not require every employee to related dues, he will not be charged for join the union as a condition of retaining such dues between July of 2004 and June employment.”). of 2005.

2 White did not receive the CWA News until NLRB, who affirmed the Director’s 1997. White began receiving the CWA decision for substantially the reasons set News in 1997, he declined to read it forth in the Director’s letter. White because, according to White, “on their requested that the General Counsel face, the CWA News magazines look[ed] reconsider his decision, but the General like union propaganda newspapers, and Counsel refused. there [was] no hint that notice of anything In September 1999, White filed a pertinent to a non-union employee would pro se complaint against the CWA in the be contained therein.” App. II at 139.4 As District Court. In his complaint, White a result, the CWA charged White both the claimed (1) that the defendants had bargaining-related and non-bargaining- breached their duty of fair representation related portions of his dues between 1988 by failing to notify him of his Beck rights and 1998. and (2) that the Opt-Out Procedure White learned of his right to opt out infringed his “First Amendment rights not by word of mouth in August or September to associate and . . . [his NLRA] Section 7 of 1998. In October of 1998, White filed rights not to support non-collective a complaint against the CWA with the bargaining activity.” Id. at 186.5 White N a t i o n a l L abor R elations Boa rd sought a refund of the non-bargaining- (“NLRB”). White claimed that the CWA related dues that he paid between 1988 and had violated the NLRA by “failing to 1998, as well as an injunction prohibiting adequately notify [him] of his Beck the use of the Opt-Out Procedure in the rights.” Id. at 127. By letter, the Acting future. Regional Director of the NLRB The defendants moved for summary (“Director”) dismissed W hite’s complaint, judgment, and the District Court granted finding that “[t]he evidence does not establish that the Unions violated Section 8(b)(1)(a) of the [NLRA] by failing to 5 notify [White] of [his] rights” under Beck. The precise language of the First Id. at 76. White appealed the Director’s Amendment claim reads as follows: decision to the General Counsel of the Defendant infringes plaintiff’s First Amendment rights not to associate and 4 Although White makes much of the plaintiff’s Section 7 rights not to support CWA’s failure to send the CWA News to non-collective bargaining activity by the correct address, this failure does not mandating that plaintiff object to paying appear to form the basis for his First full union dues annually, in the manner Amendment claim. Instead, White designated by defendant, at the time contends that requiring him to comply designated by defendant. with the Opt-Out Procedure runs afoul of the First Amendment. App. II at 186.

3 the motion. The Court held that it lacked We note at the outset that the courts jurisdiction over White’s Section 7 claim of appeals are divided on the question because the National Labor Relations whether actions taken by a union pursuant Board had exclusive jurisdiction over such to an agency-shop provision in a collective claims. As to White’s First Amendment bargaining agreement constitute state claim, the Court stated that the Opt-Out action. Compare Price v. UAW, 795 F.2d Procedure did not amount to state action 1128 (2d Cir. 1986) (no state action); and was thus not subject to constitutional Kolinske v. Lubbers, 712 F.2d 471 (D.C. constraints. The Court relied on two Cir. 1983) (same); with Beck v. courts of appeals decisions holding that Communications Workers of Am., 776 agency-shop clauses in collective F.2d 1187 (4th Cir. 1985) (state action); bargaining agreements do not constitute Linscott v. Millers Falls Co., 440 F.2d 14 state action, see Price v. UAW, 795 F.2d (1st Cir. 1971) (same).6 The Supreme 1128 (2d Cir. 1986); Kolinske v. Lubbers, Court has explicitly left this issue open. 712 F.2d 471 (D.C. Cir. 1983), as well as See Communications Workers of Am. v. Supreme Court decisions holding, in other Beck, 487 U.S. 735, 761 (1988) (“We need contexts, that “private union conduct does not decide whether the exercise of rights not amount to state action.” App. I at 9 permitted, though not compelled, by § (citing United Steelworkers v. Sadlowski, 8(a)(3) [of the National Labor Relations 457 U.S. 102, 121 n.16 (1982) (union rule Act] involves state action.”). For restricting campaign contributions to essentially the reasons outlined by the candidates for union office); United District of Columbia and Second Circuits, Steelworkers v. Weber, 443 U.S. 193, 200 we agree that state action is not present in (1979) (affirmative action plan in these circumstances. We add the collective bargaining agreement). Finally, following comments addressing the the District Court held that the statute of specific arguments that White has limitations barred White’s duty-of-fair- advanced. representation claim. A. White filed a timely notice of appeal, and we granted his request for 6 appointed counsel. On appeal, White Two other courts of appeals have argues that the District Court erred in reached First Amendment claims in failing to reach the merits of his First challenges to provisions of collective Amendment claim because the CWA’s bargaining agreements governed by the implementation of the Opt-Out Procedure NLRA without discussing the question of in fact constitutes state action. White does state action. See Hammond v. United not contest the denial of his NLRA and Papermakers & Paperworkers Union, duty-of-fair-representation claims. 462 F.2d 174, 175 (6th Cir. 1972); Seay v. McDonnell Douglas Corp., 427 F.2d II. 996, 1003-04 (9th Cir. 1970).

4 To establish that challenged to render the CWA’s implementation of conduct was state action, a plaintiff must the Opt-Out Procedure state action.7 We demonstrate two things. First, the conduct disagree. at issue must either be mandated by the Although White attempts to state or must represent the exercise of a analogize the conduct of the CWA to the state-created right or privilege. Am. conduct at issue in Edmonson – a civil Manufacturers Mut. Ins. Co. v. Sullivan, litigant’s exercise of peremptory 526 U.S. 40, 50 (1999). Second, the party challenges – the analogy is flawed. In who engaged in the challenged conduct Edmonson, the Court held that a civil must be a person or entity that can “‘fairly litigant who exercises a peremptory be said to be a state actor.’” Id. (quoting challenge “relies on governmen tal Lugar v. Edmonson Oil Co., 457 U.S. 922, assistance and benefits” because “the 937 (1982)); see also Angelico v. Lehigh peremptory challenge system, as well as Valley Hosp., Inc., 184 F.3d 268, 277 (3d the jury trial system of which it is a part, Cir. 2000). Because we hold that White simply could not exist” “without the overt, has failed to make the second showing s i g n if i c a nt p a r t i c i p a t i o n o f t h e required to establish state action, we need government.” 500 U.S. at 622. See also id. not reach the question whether he has at 622-24. Among other things, the Court made the first. noted that a litigant exercising a In determining whether a person or peremptory challenge must call on the trial entity can be fairly described as a state judge, “who beyond all question is a state actor, “it is relevant to examine the actor,” to excuse the juror whom the following: the extent to which the actor litigant seeks to dismiss. Id. at 624. relies on governmental assistance and In the present case, White draws a benefits; whether the actor is performing a comparison between the exercise of a traditional governmental function; and peremptory challenge and the CWA’s Opt- whether the injury [to the plaintiff] is Out Procedure. Just as state participation aggravated in a unique way by the is needed to effectuate a peremptory incidents of governmental authority.” challenge, White maintains, the NLRA is Edmonson v. Leesville Concrete, Inc., 500 needed to effectuate the Opt-Out U.S. 614, 621-22 (1992) (citations Procedure. In other words, he contends, if omitted); see also Mark v. Borough of Hatboro, 51 F.3d 1137, 1143 (3d Cir. 1995) (applying this test). White relies 7 solely on the first of these factors, arguing Since we hold that White has not that 29 U.S.C. § 158(a)(3)’s authorization established the presence of the first of agency-shop clauses in collective Edmonson factor, we need not decide bargaining agreements provides the CWA whether White could have shown that the with sufficient “governmental assistance” CWA is a state actor based solely on that factor.

5 Section 158(a)(3) of the NLRA did not agency shop clauses or permit agency-shop clauses, non-union mandatory payroll employees could not be forced to pay dues, deductions for union dues. and thus there would be no need to devise Even though federal law p r o c e d u r e s p e rm it t in g n on-u nio n provides an encompassing employees to decline to pay part of their umbrella of regulation, the compulsory dues. parties, like any two parties to a private contract, were This argument, however, overlooks still free to adopt or reject a si g n ificant difference betwe en an agency shop clause with peremptory challenges and agency-shop or without government clauses. The right to exercise peremptory appr oval. Thu s, the challenges is conferred by statute or rule, authorization for agency not by virtue of an agreement between the shop clauses provided by parties. See, e.g., 28 U .S.C. § 1870; Fed. NLRA section 8(a)(3) does R. Civ. Proc. 47(b); Fed. R. Crim. Proc. not transform agency shop 24(b). Agency-shop clauses result from clauses into a right or agreements between employers and privilege created by the state unions. As the District of Columbia or one for whom the state is Circuit has observed: responsible. While the NLRA provides a Kolinske, 712 F.2d at 478. If the fact that framew ork to assis t the government enforces privately employees to organize and negotiated contracts rendered any act taken bargain collectively with pursuant to a contract state action, the state their employers, the NLRA action doctrine would have little meaning.8 is neutral with respect to the content of p articular agreements. See NLRA § 8 Shelley v. Kraemer, 334 U.S. 1 8(d), 29 U.S.C. § 158(d); (1948), did not endorse such an Local 24, International argument. In that case, the Court held Brotherhood of Teamsters v. that a state court’s enforcement of a Oliver, 358 U.S. 283, 294- restrictive covenant in a deed to real 95, 79 S. Ct. 297, 303-04, 3 property that barred African-Americans L.Ed.2d 312 (1959). The from owning that property amounted to NLRA does not mandate the state action. Shelley, 334 U.S. at 20. existence or content of, for The Court distinguished the case before example, seniority clauses, it, however, from situations in which w o r k r u l e s, s ta f f i n g private actors engage in racial requirements, or union discrimination but do not ask security provisions like government officials to enforce their

6 White objects to this reasoning on the utility terminated the plaintiff’s the ground that federal labor law gives service. Jackson, 419 U.S. at 346. The unions greater bargaining power than they plaintiff sued the utility, claiming that the would have otherwise possessed. But for utility had terminated her power without the additional leverage that the NLRA affording her notice and a hearing and had affords unions, the argument runs, unions thus violated the Due Process Clause. The would never be able to extract concessions plaintiff contended that the defendant’s like agency-shop clauses from employers monopoly in the market for electrical at the bargaining table. See Brief for power rendered the defendant a state actor. A p p e l l a n t a t 1 9 ( c it i n g A m . The Court rejected this argument, stating Communications Ass’n. v. Douds, 339 that the defendant’s state-crea ted U.S. 382, 401 (1940) (“[W]hen authority monopoly was “not determinative in derives in part from Government’s thumb considering whether [the defendant’s] on the scales, the exercise of that power by termination of service to [the plaintiff] was private persons becomes closely akin, in ‘state action.’” Id. at 351-52; see also some respects, to its exercise by Crissman v. Dover Downs Entm’t., 289 Government itself.”)). However, as the F.3d 231, 247 (3d Cir. 2002) (en banc) CWA points out, the Supreme Court’s (holding that even though a state racing decision in Jackson v. Metro. Edison Co., regulation commission had granted a 419 U.S. 345 (1974), forecloses the racetrack a “six-month monopoly” in the argument that a private party negotiating a market for harness racing, the acts of the contract must be viewed as a state actor if entity operating the racetrack were not the state has furnished the party with more attributable to the state). bargaining power than it would have The state’s grant of a monopoly to otherwise possessed. the utility surely increased the utility’s In Jackson, a Pennsylvania power to bargain with its customers regulatory agency granted a utility a concerning the terms on which the utility monopoly over the sale of electrical power would supply power – including, in the plaintiff’s area. Acting pursuant to presumably, the process due customers a state regulation that permitted utilities to suspected of failing to pay their bills. “discontinue service to any customer on Nonetheless, the Court held that the reasonable notice of nonpayment of bills,” utility’s termination of the plaintiff’s service was not state action. Similarly, in this case, it could be plausibly argued that decisions to do so against others. Id. at “the NLRA grants unions something of an 19 (“These are not cases . . . in which the exclusive franchise through majority States have merely abstained from representation.” Kolinske, 712 F.2d at action, leaving private individuals free to 478. It may well be that the CWA would impose such discriminations as they see not have been able to induce Bell to fit.”).

7 include an agency-shop provision in the Hanson, 351 U.S. at 232. Since state law collective bargaining agreement between could not supersede union-shop clauses Bell and the CWA absent the CW A’s governed by the RLA, the Court “exclusive franchise.” However, under concluded, such clauses bore “the Jackson, the CWA’s statutorily enhanced imprimatur of federal law,” and their bargaining power is insufficient to warrant implementation constituted state action. a finding of state action. See also Price v. Id. UAW, 795 F.2d at 1133 (“[T]he naked fact The Hanson Court further observed that a [union] . . . is accorded monopoly that the NLRA, unlike the RLA, does not status is insufficient alone to denominate make similar provisions in collective that entity’s action as government ba rg a i n i n g a gr e e m e nts supe r s e de action.”). conflicting state law. See Hanson, 351 B. U.S. at 232 (“The parallel provision in § 14 (b) of the Taft-Hartley Act . . . makes White points to a pair of Railway [a] union shop agreement give way before Labor Act (“RLA”) cases to support the a state law prohibiting it.”); see also 29 proposition that the CWA Opt-Out U.S.C. § 164(b) (“Nothing in this Act . . . Procedure amounts to state action. See shall be construed as authorizing the Railway Employees’ Dept. v. Hanson, 351 execution or application of agreements U.S. 225 (1956); Shea v. Int’l. Ass’n. of requiring membership in a labor Machinists & Aero. Workers, 154 F.3d organization as a condition of employment 508 (5th Cir. 1998) (relying on Hanson). in any State or Territory in which such In Hanson, the plaintiffs’ employer, a execution or application is prohibited by railroad, and the defendant railway State or Territorial law.”). Thus, the employees’ union entered into a collective rationale for finding that an act done bargaining agreement providing that union pursuant to a collective bargaining membership was a condition of continued agreement governed by the RLA is state employment by the railroad. The plaintiffs action is not applicable to an act sued the union, claiming that the “union- authorized by an agreement controlled by shop” provision of the collective the NLRA. See Price, 795 F.2d at 1131 bargaining agreement violated the (“As [the RLA] offered a means to plaintiffs’ First Amendment rights. The override the law of 17 states at the time, . Supreme Court found that the union’s . . the Hanson Court found government implementation of the union-shop action.”); Kolinske, 712 F.2d at 476 (“In provision amounted to state action. The Hanson it was the preemption of a contrary Court based this conclusion on the fact that state law by federal law that was central to the RLA, which governs collective the Court’s finding of state action.”). bargaining by railway employees, permits t h e u se of u nion-s h o p c l a u s e s The RLA does not apply to the “notwithstanding any law ‘of any state.’” collective bargaining agreement at issue

8 here, as the RLA governs only collective relevant provision of the RLA, unlike the bargaining involving “railroad[s] subject NLRA, preempts state law. The First to the jurisdiction of the Surface Circuit reasoned that, “[i]f federal support Transportation Board, . . . any company attaches to the union shop if and when two which is directly or indirectly owned or parties agree to it, it is the same support, controlled by or under common control once it attaches, even though the consent with any carrier by railroad,” 45 U.S.C. § of a third party, the state, is a pre- 151(a), and “common carrier[s] by air,” 45 condition.” Linscott, 440 F.2d at 16; see U.S.C. § 181; see also Capraro v. United also id. at 16 n.2 (stating that 29 U.S.C. § Parcel Serv. Co., 993 F.2d 328, 331 n.4 158(a)’s “recognition of the union shop . . (3d Cir. 2001). Accordingly, the ground . constitutes governmental endorsement in on which the Court found state action in an area in which Congress makes the Hanson is absent. rules”). In essence, the court concluded that Congress’s express authorization of The same reasoning applies to agency-shop clauses makes actions taken Shea, in which the Fifth Circuit found that pursuant to such clauses state action. a procedure by which n on-u nion employees in agency shops could decline In Am. Mfrs. Mut. Ins. Co. v. to pay non-bargaining-related dues Sullivan, supra, however, the Supreme amounted to state action because “the Court rejected the argument that a RLA expressly states that it supersedes legislature’s express permission of a state law, and hence federal law is the practice is sufficient to make the act of authority through which private rights are engaging in that practice state action. The lost.” Shea, 154 F.3d at 513 n.2. Since the Pennsylvania law at issue in Sullivan NLRA, rather than the RLA, applies to the permitted an insurer providing workers’ collective bargaining agreement between compensation insurance to a private Bell and the CWA, Hanson and Shea are employer to withhold payments of medical inapposite. expenses to an employee of the insured, pending the completion of a “utilization C. review” assessing the reasonableness of We have carefully considered the the employee’s claim. To obtain court of appeals’ decisions holding that permission to withhold benefits during state action is present when a union takes utilization review, an insurer was required action pursuant to an agency-shop to file a form with a state agency “detailing provision in a collective bargaining the employee’s injury, and the medical agreement governed by the NLRA, but we treatment to be reviewed.” Sullivan, 526 find those decisions unconvincing. In U.S. at 45. The plaintiffs claimed that the Linscott v. Millers Falls Co., 440 F.2d 14 defendant insurers’ act of withholding (1st Cir. 1971), the First Circuit relied on payment of their medical expenses Hanson and did not find it critical that the pending utilization review violated their

9 constitutional right to due process. The 232). Thus, the court relied on Congress’s plaintiffs predicated their argument for authorization of agency-shop clauses in state action on the state legislature’s Section 158(a)(3). As noted above, this express permission to engage in the fact is insufficient to establish the presence utilization review procedure. of state action, under Sullivan. For these reasons, we are not convinced by the court The Supreme Court rejected this of appeals’ decisions finding state action argument. The Court did “not doubt that to be present in circumstances similar to the State’s decision to provide insurers the those present here. option of deferring payment for unnecessary and unreasonable treatment III. pending review can in some sense be seen For the reasons set out above and in as encouraging them to do just that.” Id. at Price and Kolinske, we hold that the 53. However, the Court viewed “this kind CWA’s implementation of the Opt-Out of subtle encouragement” as “no more Procedure did not constitute state action. significant than that which inheres in the Accordingly, we affirm the District State’s creation or modification of any Court’s judgment. legal remedy.” Id. The First Circuit’s holding in Linscott that Congress’s authorization of agency-shop clauses renders actions taken pursuant to such provisions state action cannot be squared with Sullivan’s rejection of the notion that the express legislative authorization of an act makes that act state action. A similar analysis applies to the Fourth Circuit’s decision in Beck v. Communications Workers of Am., 776 F.2d 1187 (4th Cir. 1985), in which the Court held that a union’s act of charging dues to nonmembers pursuant to an agency-shop clause constituted state action. The court approvingly quoted Hanson’s statement that “[t]he enactment of the federal statute authorizing union shop agreements is the governmental action on which the Constitution operates, though it takes a private agreement to invoke the federal sanction.” Beck, 776 F.2d at 1207 (quoting Hanson, 351 U.S. at