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Warner v. Chauffeurs, Teamsters, Inc.

Court of Appeals of Indiana

March 23, 2017

John E. Warner, Jr.; Rick Clay; Sam Early; Brian Goeglein; Mike Campbell; Brad Wilson; and John Zimmerman; Appellants-Plaintiffs,
v.
Chauffeurs, Teamsters, and Helpers Local Union No. 414 and Speedway Redi Mix, Inc., Appellees-Defendants.

         Appeal from the Allen Superior Court The Honorable Stanley A. Levine, Judge Trial Court Cause No. 02D03-1511-PL-524

          Attorney for Appellants Patrick L. Proctor Eilbacher Fletcher, LLP

          Attorneys for Appellee Chauffeurs, Teamsters, and Helpers Local Union No. 414 Geoffrey S. Lohman David T. Vlink Fillenwarth Dennerline Groth & Towe, LLP

          Bradford, Judge.

          Case Summary [1]

         [¶1] Appellees-Defendants Speedway Redi Mix, Inc., ("Employer") and Chauffeurs, Teamsters, and Helpers Local Union No. 414 ("the Union") were parties to a collective-bargaining agreement ("the CBA") that ran from May 1, 2013, through March 31, 2016. Employer is an Allen County company that produces and sells concrete, while the Union is the collective-bargaining representative of Employer's truck drivers. The CBA included union security language ("the Clause") which made membership in the Union a condition of employment for qualifying employees and authorized Employer to withhold union dues from their wages.

         [¶2] In early 2015, a part-owner of Employer approached Plaintiffs-Appellants John E. Warner, Jr., et al., who were truck drivers at Employer ("the Drivers") and offered to transfer their employment to another company he apparently controlled, Speedway Construction Products Corp. ("SCP"). The Drivers all had, at various times, voluntarily executed dues checkoff authorizations ("Dues Checkoffs") that allowed Employer to withdraw union dues from their wages for distribution to the Union. The Drivers accepted the owner's offer, resigned from Employer and the Union, and began work at SCP, apparently still hauling Employer product, however. The Union filed several unfair labor practice complaints against Employer with the National Labor Relations Board ("NLRB"), which were ultimately settled by Employer and the Union. Pursuant to the settlement, the Drivers would return to Employer at their previous wage and benefit levels and still pay dues to Employer for transfer to the Union.

         [¶3] In 2015, the Drivers filed a complaint in the trial court against Employer and the Union, alleging that the Union was receiving their union dues in violation of Indiana's right-to-work law ("the Act") and seeking recovery of dues already paid under a theory of money had and received. At the same time, Plaintiff Warner filed a claim of unfair labor practice with the NLRB. In June of 2016, the NLRB dismissed Warner's claim. In July of 2016, the trial court dismissed the Drivers' claims, ruling that (1) they had failed to state a claim upon which relief could be granted because although the Act had rendered the Clause null and void, the Dues Checkoffs remained valid, and (2) their claims were preempted by federal law in any case. The Drivers contend on appeal that the trial court erred in granting the Union's motion to dismiss because they were not required to prove the existence of the Clause in order to maintain their cause of action, the relevant federal law contains exceptions for state-enacted right-to-work laws, and the Dues Checkoffs are invalid in any event. We agree with the Drivers that the trial court erred in dismissing the Drivers' claim that they were required to remain members of the Union in violation of the Act but agree with the Union that the Drivers' claim based on the Dues Checkoffs is preempted by federal law. Consequently, we affirm in part, reverse in part, and remand for further proceedings.

         Facts and Procedural History

          [¶4] Employer and the Union were parties to the CBA, which ran from May 1, 2013, through March 31, 2016. Employer is an Allen County company that produces and sells concrete, while the Union is the collective-bargaining representative of Employer's truck drivers. Article 4 of the CBA contains the Clause, requiring each qualifying Employer employee to join and maintain membership in the Union as a condition of employment. Section 4.04 provides, however, that "[i]t is understood that the above [union security] language … is only effective to the extent that it is permitted by Indiana State and Federal law." Appellant's App. Vol. II p. 40.

         [¶5] In March of 2015, Todd Frederick, an owner of Employer and SCP, offered employment at SCP to the Drivers. At SCP, the Drivers apparently would still be hauling Employer's product, much as they had before. At various times, it is undisputed that all of the Drivers had executed Dues Checkoffs authorizing Employer to deduct dues to be paid over to the Union.[2] The Drivers accepted Frederick's offer, resigning from Employer, withdrawing from the Union, beginning their work for SCP, and becoming members of the International Association of Machinists, Local 2569 ("Local 2569.")

         [¶6] On March 17, 2015, the Union filed the first of four unfair labor practice complaints against Employer and/or SCP with the NLRB, alleging various violations of the National Labor Relations Act ("the NLRA"). During this period, the Union conducted a strike by Employer's employees. On October 3, 2015, the NLRB regional director approved a settlement agreement between Employer, SCP, and the Union. Among other terms, Employer and SCP were obligated to post a notice to employees and conduct themselves consistent with the following:

WE WILL NOT tell you that you need to withdraw from [the Union] or any other labor organization.
WE WILL NOT interfere with your relationship with your union by encouraging you to switch your employment from [Employer] to [SCP].
WE WILL NOT assist [Local 2569], including by encouraging you to withdraw from your Union and to switch your employment from [Employer] to [SCP].
WE WILL NOT give effect to your dues check-off authorizations for [Local 2569], and WE WILL continue to give effect to your check-off authorizations for the [the Union].
WE WILL resume assigning work to the bargaining unit … as previously done prior to March 16, 2015.
WE WILL restore your wages, benefits, seniority and other terms and conditions of employment to what they were before we changed them when we applied the terms of our collective bargaining agreement with [the Machinists] rather than the terms of our collective bargaining agreement with [the Union].

Appellant's App. Vol. II p. 13.

          [¶7] Following approval of the settlement agreement, the Drivers' employment was transferred back to Employer, with their seniority, wages, and all other terms of employment the same as before they left to work for SCP. Employer resumed withholding union dues from the Drivers' paychecks and paying those dues to the Union pursuant to Dues Checkoffs that the Drivers had executed before going to work for SCP.

         [¶8] On November 12, 2015, the Drivers filed a complaint in the trial court against Employer and the Union, alleging the Union of violating the Act by compelling them to remain members of and pay dues to the Union and seeking the return of those dues pursuant to the doctrine of money had and received. Also on November 12, 2015, Plaintiff Warner filed an unfair-labor-practices charge with Region 25 of the NLRB, alleging violations related to the continued withholding of union dues by Employer for payment to the Union. On January 29, 2016, the regional director of the NLRB dismissed Warner's charge, finding no NLRA violation.

         [¶9] On February 4, 2016, the Union moved to dismiss the Drivers' complaint. The Union requested dismissal of the Drivers' complaint pursuant to the Act for failure to state a claim and lack of subject matter jurisdiction as a result of preemption by federal labor law. On May 16, 2016, the trial court held a hearing on the Union's motion to dismiss the Drivers' claims against it. Meanwhile, Warner appealed the ...


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