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Nagel v. United Food and Commercial Workers Union

United States District Court, D. Minnesota

March 4, 2019

Matthew Nagel, individually and on behalf of all others similarly situated, Plaintiff,
v.
United Food and Commercial Workers Union, Local 653, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

          Wilhelmina M. Wright United States District Judge

         This matter is before the Court on Defendant's motion to dismiss Plaintiff's amended complaint. (Dkt. 14.) Plaintiff Matthew Nagel asserts claims against Defendant United Food and Commercial Workers, Local 653 (Local 653), for breach of the duty of fair representation and violation of the Labor-Management Reporting and Disclosure Act (LMRDA). For the reasons addressed below, the Court grants in part and denies in part Local 653's motion to dismiss Count 1 of Nagel's amended complaint and grants Local 653's motion to dismiss Count 2 of Nagel's amended complaint.

         BACKGROUND

         This dispute arises from a March 4, 2018 collective bargaining agreement (CBA) negotiated between Local 653 and SuperValu Cub Foods and other independent grocers (collectively, Grocers). Under the March 4, 2018 CBA, a subset of employees of the Grocers lost the opportunity to receive a valued pension benefit plan. Nagel is one of several Local 653 union members who was on track to receive the pension benefit plan at issue. Local 653 serves as the sole and exclusive bargaining agent for meat and food market employees of the Grocers.

         Under the previous collective bargaining agreement, employees of the Grocers with 30 years of qualifying employment were entitled to retire with full pension benefits. Known as the “30-and-out” plan, both parties describe this plan as a “highly valued, important benefit.” Nagel alleges that, to the detriment of Nagel and other employees, Local 653 unilaterally conceded the “30-and-out” pension benefit plan while negotiating the March 4, 2018 CBA. After negotiations, Local 653 sent the proposed CBA to a committee that included Local 653 union members for a vote of confidence. The committee approved the proposed CBA without the “30-and-out, ” with only one vote against it.[1]

         Local 653 scheduled the ratification vote on the proposed CBA to take place at the March 4, 2018 membership meeting. Nagel claims that Local 653 failed to provide its members with accurate and complete information pertaining to the proposed CBA. Prior to the ratification vote, Local 653 prepared materials about the proposed CBA. Nagel alleges that none of these informational materials addresses the loss of the “30-and-out” benefit plan. And some of the informational materials falsely state that the committee's vote of confidence in favor of the proposed CBA was unanimous. The gravamen of Nagel's claim is that, during the period leading up to the ratification vote, Local 653 concealed from its members the loss of the “30-and-out” benefit plan.

         Local 653 staffed a table with individuals who were available to answer questions about the proposed agreement during a time period that “substantially overlapped” with the hours that Local 653 conducted the ratification vote. But these individuals only answered questions regarding the “30-and-out” plan if union members raised the issue, Nagel alleges. And when doing so, Nagel contends, the individuals ushered union members into a different room to avoid alerting other members about the loss of the “30-and-out” plan. The union members ultimately ratified the CBA.

         Nagel commenced this lawsuit on April 19, 2018, and filed his amended complaint on July 3, 2018. The amended complaint asserts that Local 653 breached its duty of fair representation and violated the Labor-Management Reporting and Disclosure Act (LMRDA). Local 653 moves to dismiss the first count of the amended complaint for failure to state a claim for breach of duty of fair representation, and the second count for lack of subject-matter jurisdiction.

         ANALYSIS

         Local 653 moves to dismiss the amended complaint under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1). A complaint must be dismissed, under Rule 12(b)(6), if it fails to state a claim on which relief can be granted. Fed.R.Civ.P. 12(b)(6). To survive a Rule 12(b)(6) motion, the complaint must allege sufficient facts that, when accepted as true, state a facially plausible claim to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When determining whether the complaint meets this standard, a court accepts as true the factual allegations in the complaint and draws all reasonable inferences in favor of the plaintiff. Blankenship v. USA Truck, Inc., 601 F.3d 852, 853 (8th Cir. 2010). The factual allegations need not be detailed, but they must be sufficient to “raise a right to relief above the speculative level” and “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). Merely asserting “labels and conclusions” or a “formulaic recitation of the elements of a cause of action” is insufficient. Id. at 555. And legal conclusions couched as factual allegations may be disregarded by the district court. See Iqbal, 556 U.S. at 678-79. When deciding a Rule 12(b)(6) motion to dismiss, the district court may consider the complaint, exhibits attached to the complaint, and documents that are necessarily embraced by the complaint. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003).

         A complaint must be dismissed if the district court lacks subject-matter jurisdiction over the action. Fed.R.Civ.P. 12(b)(1). When challenging a complaint for lack of subject-matter jurisdiction, a defendant may do so either on its face or on the factual truthfulness of its averments. See, e.g., Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). Here, Local 653 raises a facial challenge to jurisdiction.[2] With a facial challenge, the non-moving party “receives the same protections as it would defending against a motion brought under Rule 12(b)(6).” Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). A defendant will prevail on its facial challenge “if the plaintiff fails to allege an element necessary for subject matter jurisdiction.” Titus, 4 F.3d at 593.

         I. Duty of Fair Representation

         Local 653 argues that Nagel fails to state a claim for breach of the duty of fair representation. The National Labor Relations Act imposes a duty on certified unions to fairly represent their members during collective bargaining. See Vaca v. Sipes, 386 U.S. 171, 177-78 (1967) (interpreting sections 7 and 8 of the National Labor Relations Act). A union breaches this duty “only when [its] conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith.” Id. at 190. To state a claim for breach of the duty of fair representation, a plaintiff must allege enough facts that, if presumed true, permit the inference that there was both a breach and causation. See Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555; Anderson v. United Paperworkers Int'l Union, 641 F.2d 574, 579 (1981). Nagel alleges that Local 653 breached its duty of fair representation by acting arbitrarily, discriminatorily, and in bad faith, which resulted in Nagel's injury. The Court addresses each of these allegations, in turn.

         A. Arbitrary Conduct

         Nagel contends that Local 653 unilaterally conceded the “30-and-out” pension benefit plan at the outset of the negotiation and, by doing so, failed to obtain “further consideration” for the concession. Nagel maintains that this bargaining strategy is irrational. Local 653 argues that its negotiation of the CBA was not arbitrary.

         A union may be deemed to have arbitrarily negotiated a CBA when the final agreement is “so far outside a wide range of reasonableness that it is wholly irrational.” Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65, 78 (1991) (internal citation omitted) (internal quotation marks omitted). Courts afford substantial deference to a union's negotiation on behalf of its membership because negotiators need wide latitude to effectively perform their bargaining responsibilities. See Id. The law neither requires- nor expects-all union members to be completely satisfied with a CBA. See Ford ...


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