Hughes v. United Parcel Service, Inc.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________________________
No. 15-1690
__________________________
JAMES HUGHES; MELISSA HUGHES;
JOHN K. HUGHES; BEVERLY HUGHES,
Appellants
v.
UNITED PARCEL SERVICE, INC;
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, LOCAL 623; JOHN DOES 1-10
______________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. Civ. Action No. 2-14-cv-03822)
District Judge: Honorable R. Barclay Surrick
_____________
Submitted Under Third Circuit L.A.R. 34.1(a)
January 21, 2016
______________
Before: JORDAN, HARDIMAN, and GREENAWAY, JR., Circuit Judges.
(Opinion Filed: February 1, 2016)
______________
OPINION*
______________
GREENAWAY, JR., Circuit Judge.
James Hughes and John K. Hughes (collectively, “Appellants”), along with their
respective spouses, appeal from the dismissal of their complaint pursuant to the Rule
12(b)(6) Motion filed by Appellees, United Parcel Service, Inc. (“UPS”), and the
International Brotherhood of Teamsters, Local 623 (“Teamsters”). For the reasons set
forth below, we will affirm the judgment of the District Court.
I. BACKGROUND
Appellants are employees of UPS and members of the Teamsters union.
Appellants had worked for UPS as part-time “air drivers” for twelve years and attained an
hourly pay rate of $23.70 when, in January 2012, they learned that full-time positions
were opening. Appellants allege that they asked certain members of the Teamsters
whether their rate of pay would change if they became full-time employees and were told
that it would not. “Based on these representations, the collective bargaining agreement
[(“CBA”)], and the job descriptions for the full-time positions, [Appellants] applied for
and were hired by Defendant, UPS[,] for full-time employment as air drivers.” (App.
25.) When they received their first paycheck as full-time employees, Appellants
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
2
discovered that their hourly rate of pay had dropped to $13.50 and that their seniority had
been eliminated.
Upon discovering the reduction in their rate of pay, Appellants “immediately
contacted UPS” and were told that “their previous wages would not be restored.” (App.
26.) Appellants allege that they contacted the National Labor Relations Board, which
was unable to help, and filed grievances with the Teamsters.1
On June 4, 2014, Appellants and their spouses filed a state court complaint against
UPS and the Teamsters, in which they alleged breach of contract (Count One); violation
of Pennsylvania Wage and Payment Collection Law (Count Two); unjust enrichment
(Count Three); loss of consortium (Count Four); and violation of the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§ 201–219 (Count Five).2
On June 19, 2014, the Teamsters removed the matter to the United States District
Court for the Eastern District of Pennsylvania on the ground that Appellants’ claims all
arose under the CBA and were thus preempted by Section 301 of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185 (“Section 301”).3 The Teamsters then moved
1
Appellants have not argued that they complied with the grievance procedure set
forth in Article 49 of the CBA, discussed below.
2
Appellants ultimately withdrew the claims alleged in Count Five in their
omnibus response to Appellees’ motions to dismiss.
3
Section 301 confers federal jurisdiction on claims arising under CBAs. See N.J.
Carpenters & Trs. Thereof v. Tishman Constr. Corp. of N.J., 760 F.3d 297, 302 (3d Cir.
2014) (noting that “complete preemption ‘operates to confer original federal subject
matter jurisdiction notwithstanding the absence of a federal cause of action on the face of
the complaint,’” and that Section 301 of the LMRA is one of only three examples of
3
to dismiss, and Appellants amended their complaint. Both the Teamsters and UPS
moved to dismiss Appellants’ amended complaint pursuant to Rule 12(b)(6). 4
On March 6, 2015, the District Court granted Appellees’ motion and dismissed
Appellants’ complaint with prejudice. Hughes v. United Parcel Serv., Inc., No. CIV.A.
14-3822, 2015 WL 1021312, at *7 (E.D. Pa. Mar. 6, 2015). The Court determined that,
although Appellants did not attach the CBA, the CBA was “integral to and explicitly
relied upon” in the complaint. Id. at *2–3. Thus, the Court considered the CBA, which
UPS attached to its motion in full and which the Teamsters attached in part. Id.The District Court determined that Appellants’ claims arose out of their
employment relationship, which is governed by the CBA, and that the claims are
therefore preempted by Section 301. Id. at *4–5. Because federal labor law “requires
that individual employees wishing to assert contract grievances must attempt use of the
contract grievance procedure agreed upon by the employer and union as the mode of
redress,” id. at *5 (quoting Republic Steel Corp. v. Maddox, 379 U.S. 650, 652 (1965)),
the District Court determined that Appellants “were first required to exhaust their
available administrative remedies prior to initiating this suit,” id. at *6.5
complete preemption that the Supreme Court has recognized) (quoting In re U.S.
Healthcare, Inc., 193 F.3d 151, 160 (3d Cir. 1999).)
4
All references to the complaint in this opinion will be to the amended complaint,
which did not differ substantially from the original complaint.
5
Although the District Court uses the term “administrative remedies,” that might
be seen as a misnomer. The District Court’s reference is to the CBA grievance
procedure, which is a contractual remedy, different in kind from the government-
4
The Court thus dismissed Appellants’ state-law claims for failure to exhaust the
remedies available under the CBA. Id. The Court also dismissed the loss of consortium
claims asserted by Appellants’ spouses, because those derivative claims could not
proceed independently of Appellants’ claims. Id. The Court determined, finally, that
granting Appellants leave to amend their complaint would be futile given the dispositive
nature of Appellants’ failure to exhaust the remedies available under the CBA. Id. The
Court accordingly dismissed Appellants’ claims with prejudice. Id. at *7. This timely
appeal followed.
II. JURISDICTION & STANDARD OF REVIEW
The District Court had jurisdiction over this case pursuant to 28 U.S.C. § 1331.
This Court has jurisdiction under 28 U.S.C. § 1291.
We review a district court’s decision to grant a motion to dismiss pursuant to Rule
12(b)(6) de novo. Kaymark v. Bank of Am., N.A., 783 F.3d 168, 174 (3d Cir. 2015).
Thus, “we accept all factual allegations as true, construe the complaint in the light most
favorable to the plaintiff, and determine whether, under any reasonable reading of the
complaint, the plaintiff may be entitled to relief.” F.T.C. v. Wyndham Worldwide Corp.,
799 F.3d 236, 242–43 (3d Cir. 2015) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d
361, 374 n.7 (3d Cir. 2002)).
“[C]onclusory or ‘bare-bones’ allegations will no longer survive a motion to
dismiss.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (citing Ashcroft
provided administrative procedures and remedies one often thinks of when hearing the
term “administrative remedies.”
5
v. Iqbal, 556 U.S. 662, 678 (2009)). Rather, “[t]o prevent dismissal, all civil complaints
must now set out ‘sufficient factual matter’ to show that the claim is facially plausible.”
Id. (quoting Iqbal, 556 U.S. at 678).
III. ANALYSIS
Appellants raise three arguments on appeal. First, they contend that the District
Court erred in considering the CBA because it was neither attached to nor integral to the
complaint.6 Second, they assert that what they seek to litigate is an extra-CBA promise
to pay that is not preempted by Section 301, and that the District Court should thus have
remanded the case to state court in lieu of dismissing it. Finally, Appellants contend that
they should have been granted leave to amend their complaint, to cure any perceived
deficiencies. For the reasons set forth below, these claims are unavailing.
A. Consideration of the CBA
“In deciding a Rule 12(b)(6) motion, a court must consider only the complaint,
exhibits attached to the complaint, matters of public record, as well as undisputedly
authentic documents if the complainant’s claims are based upon these documents.”
Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). Even if a plaintiff does not attach
the subject documents to the complaint, the court may consider them if a defendant
6
Appellants also assert that the Court should not have considered the CBA
because “movants’ motion did not attach the entirety of the CBA upon which there [sic]
Respondents, Hughes’ [sic] could argue from the CBA contrarily.” (Appellants’ Br. 19.)
Although the Teamsters proffered only portions of the CBA, UPS attached a complete
copy of the agreement to its motion to dismiss. After UPS filed that motion, Appellants
filed both a response and a sur-reply. Appellants thus had ample opportunity to argue
“contrarily,” and this argument is without merit.
6
attaches them to a motion to dismiss. Pension Benefit Guar. Corp. v. White Consol.
Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).
“[A] ‘document integral to or explicitly relied upon in the complaint’ may be
considered ‘without converting the motion to dismiss into one for summary judgment.’”
Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (quoting In re Burlington Coat
Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997)). When a plaintiff relies on a
document without attaching it to the complaint, the plaintiff nevertheless has notice that
the document will be at issue. Id.Because notice to the plaintiff is the principal reason for which courts decline to
look beyond the complaint, the consideration of documents upon which the plaintiff
relies does not implicate this rationale. Id. Indeed, failure to consider such documents
would raise the countervailing concern that “a plaintiff with a legally deficient claim
could survive a motion to dismiss simply by failing to attach a dispositive document on
which it relied.” Pension Benefit Guar. Corp., 998 F.2d at 1196.
Appellants contend that their complaint did not rely on the CBA. However, the
complaint provides that, “[a]t all times material, Plaintiffs [sic] employment with
Defendants was subject to a [CBA]. [In possession of Defendants].” (App. 26 (third
bracketed phrase in original).) Appellants incorporated this statement in each of the
counts alleged, and the dispute unquestionably arises out of Appellants’ employment.
Appellants’ complaint demonstrates awareness of the CBA, mooting concerns of
notice. Failure to consider this potentially dispositive document—invoked but not
attached by Appellants—would raise the concerns addressed in Pension Benefit Guaranty
7
Corp., 998 F.2d at 1196. We therefore find that the District Court did not err in
considering the parties’ CBA.
B. Effect of the CBA
Consideration of the CBA, in turn, quickly reveals that the District Court also
correctly dismissed Appellants’ complaint.
Section 301 provides:
Suits for violation of contracts between an employer and a
labor organization representing employees in an industry
affecting commerce as defined in this chapter, or between any
such labor organizations, may be brought in any district court
of the United States having jurisdiction of the parties, without
respect to the amount in controversy or without regard to the
citizenship of the parties.
29 U.S.C. § 185(a). Section 301 completely preempts state-law claims that require
interpretation of CBAs, Voilas v. Gen. Motors Corp., 170 F.3d 367, 373–74 (3d Cir.
1999) (citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 394–95 (1987)), and converts
the state-law claims into Section 301 claims to which “the statute of limitations for
section 301 applies.” Berda v. CBS Inc., 881 F.2d 20, 28 (3d Cir. 1989).
This Court has recognized that, as a general matter, an employee who wishes to
press contract-based grievances must endeavor to follow the grievance procedure upon
which the employer and the union agreed prior to seeking judicial relief. Seborowski v.
Pittsburgh Press Co., 188 F.3d 163, 168 (3d Cir. 1999) (citing Republic Steel Corp., 379
U.S. at 652; Vaca v. Sipes, 386 U.S. 171, 184 (1967)). More specifically, an employee
who alleges that “the employer breached the [CBA] ‘is bound by terms of that agreement
which govern the manner in which contractual rights may be enforced. For this reason, it
8
is settled that the employee must at least attempt to exhaust exclusive grievance and
arbitration procedures established by the bargaining agreement.’” Crafts v. Gen. Motors
Corp., 192 F. Supp. 2d 310, 317 (D. Del. 2002) (quoting Vaca, 386 U.S. at 185); accord
McCoy v. Maytag Corp., 495 F.3d 515, 524 (7th Cir. 2007) (“It is well settled that if a
CBA establishes a grievance and arbitration procedure for the redress of employee
complaints, employees wishing to assert claims based on a CBA first must exhaust the
grievance procedure before resorting to a judicial remedy.”).
The CBA that governs Appellants’ employment delineates grievance procedures
for “any controversy, complaint, misunderstanding or dispute arising as to interpretation,
application or observance of any of the provisions of this Agreement or Supplements
hereto.” (App. 73.) Appellants’ allegations that they called the NLRB and filed
grievances with the Teamsters do not satisfy the multi-step processes set forth in the
CBA. As the District Court noted, Appellants “have failed to exhaust the administrative
remedies available to them under the terms of the CBA.” Hughes, 2015 WL 1021312, at
*6. Appellants’ state-law claims were thus properly dismissed, as were their spouses’
claims for loss of consortium, which “must rise or fall” with the primary claims on which
they depend. Banks v. Int’l Rental & Leasing Corp., 680 F.3d 296, 300 n.6 (3d Cir.
2012).
C. Dismissal with Prejudice
Although Appellants now characterize the source of the dispute as “[a]n extra-
CBA promise to pay,” (Appellants’ Br. 15), the CBA controls the terms of Appellants’
employment, including their rate of pay. Indeed, Appellants framed their complaint
9
against the backdrop of the CBA, including a claim for breach of that agreement, as
discussed above. It was not until their sur-reply brief that Appellants suggested their
claim should be construed to involve this alleged “extra-CBA promise.” Hughes, 2015
WL 1021312, at *6 n.3.
As this Court has noted, “[i]t is one thing to set forth theories in a brief; it is quite
another to make proper allegations in a complaint.” Pa. ex rel. Zimmerman v. PepsiCo,
Inc., 836 F.2d 173, 181 (3d Cir. 1988). “[I]t is axiomatic that the complaint may not be
amended by the briefs in opposition to a motion to dismiss.” Id. (alteration in original)
(quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir. 1984)).
Further, Appellants did not raise this argument in their response brief, but only in their
sur-reply, which is not permissible. Cf. United States v. Hoffecker, 530 F.3d 137, 163 (3d
Cir. 2008) (noting that failure to raise argument in opening brief constitutes waiver
thereof). The District Court did not err in declining to consider Appellants’ “extra-CBA
promise” theory, which was not properly pled.
Nor did the District Court abuse its discretion in dismissing the complaint with
prejudice. See U.S. ex rel. Zizic v. Q2Administrators, LLC, 728 F.3d 228, 234 (3d Cir.
2013) (“[W]e review the District Court’s dismissal of [a] complaint with prejudice for an
abuse of discretion.” (citation omitted)). “[I]f a claim is vulnerable to dismissal under
Rule 12(b)(6), but the plaintiff moves to amend, leave to amend generally must be
granted unless the amendment would not cure the deficiency.” Shane v. Fauver, 213
F.3d 113, 115 (3d Cir. 2000).
10
Here, to the extent that Appellants assert an “extra-CBA promise,” that promise
was allegedly made by two officers of the Teamsters. But the Teamsters’ duties of fair
representation are limited to issues arising under the CBA by that document’s merger
clause, which provides that “during the lifetime of this Agreement there shall be no
demands for collective bargaining negotiations as to any matter or issue not covered by
the provisions of this Agreement or for the renegotiations of any of the provisions of this
agreement.” (App. 94.)
In short, if the subject promise fell within the CBA, then amendment would be
futile in light of Appellants’ failure to exhaust the CBA-specified grievance procedure. If
the subject promise lies outside the CBA, then the claim is not actionable against the
party alleged to have made the promise, the Teamsters. Viewed in either light, dismissal
with prejudice was entirely appropriate.
IV. CONCLUSION
We find that Appellants’ arguments, as pled, are foreclosed by the CBA into
which they entered. We also determine that amendment to plead the alleged “extra-CBA
promise” would be futile. We therefore affirm.
11