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

FILED
Mar 23 2017, 9:55 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
Patrick L. Proctor CHAUFFEURS, TEAMSTERS, AND
Eilbacher Fletcher, LLP HELPERS LOCAL UNION NO. 414
Fort Wayne, Indiana Geoffrey S. Lohman
David T. Vlink
Fillenwarth Dennerline Groth & Towe, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
John E. Warner, Jr.; Rick Clay; March 23, 2017
Sam Early; Brian Goeglein; Court of Appeals Case No.
Mike Campbell; Brad Wilson; 02A04-1608-PL-2017
and John Zimmerman; Appeal from the Allen Superior
Court
Appellants-Plaintiffs,
The Honorable Stanley A. Levine,
v. Judge
Trial Court Cause No.
02D03-1511-PL-524
Chauffeurs, Teamsters, and
Helpers Local Union No. 414
and Speedway Redi Mix, Inc.,
Appellees-Defendants.
Bradford, Judge.
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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
1
Oral argument was heard in this case on March 3, 2017, at the Maurer School of Law at Indiana
University in Bloomington, Indiana, and was attended by students and faculty of that school, the School of
Public and Environmental Affairs, and the Kelley School of Business. We would like to thank the Indiana
University students, staff, faculty and administration who provided us with their hospitality and assistance.
We would also like to thank counsel for the high quality of their written submissions and oral presentations.
Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017 Page 2 of 14
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
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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,
2
The actual Dues Checkoffs have not been made part of the record in this case, and we decline the Union’s
request to take judicial notice of them.
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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].
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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.
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Meanwhile, Warner appealed the dismissal of his unfair-labor-practices charge
to the NLRB’s General Counsel, who affirmed the dismissal on June 17, 2016.
[10] On July 22, 2016, the trial court granted the Union’s motion to dismiss the
Drivers’ complaint. The trial court concluded that the Drivers had failed to
state a claim upon which relief could be granted because the Act rendered the
Clause inoperative, meaning that nothing left in the CBA required them to
maintain membership in the Union or pay dues as a condition of employment.
The trial court, however, noted that the Drivers had executed Dues Checkoffs
before leaving Employer for SCP, which the trial court concluded were
unaffected by the Act or the temporary move to SCP and allowed Employer to
continue to withhold dues to be paid to the Union. The trial court also
concluded that it lacked jurisdiction over all claims related to the allegedly
unlawful collection and retention of dues by the Union, as they were preempted
by federal law.
Discussion and Decision
[11] Pursuant to Indiana Code section 22-6-6-8 of the Act,
A person may not require an individual to:
(1) become or remain a member of a labor organization;
(2) pay dues, fees, assessments, or other charges of any kind
or amount to a labor organization; or
(3) pay to a charity or third party an amount that is
equivalent to or a pro rata part of dues, fees, assessments, or
other charges required of members of a labor organization;
as a condition of employment or continuation of employment.
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Moreover, pursuant to Indiana Code section 22-6-6-12,
(a) If an individual suffers an injury:
(1) as the result of any act or practice that violates this chapter;
or
(2) from a threatened violation of this chapter;
the individual may bring a civil action.
(b) A court may order an award of any or all of the following to an
individual who prevails in an action under subsection (a):
(1) The greater of:
(A) actual and consequential damages resulting from the
violation or threatened violation; or
(B) liquidated damages of not more than one thousand
dollars ($1,000).
(2) Reasonable attorney’s fees, litigation expenses, and costs.
(3) Declaratory or equitable relief, including injunctive relief.
(4) Other relief the court considers proper.
(c) The remedies and penalties set forth in subsection (b) are:
(1) cumulative; and
(2) in addition to other remedies and penalties imposed for a
violation of this chapter.
[12] The Drivers alleged in their complaint that the Union and Employer violated
Indiana Code subsection 22-6-6-8(1) by “requir[ing] the Plaintiffs to become or
remain members of the Teamsters Union” and subsection (2) by requiring them
“to pay dues, fees and assessments or other charges to the Teamsters over the
Plaintiffs’ objections[.]” Appellant’s App. Vol. II p. 31.
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I. Whether the Drivers Failed to State a Claim
Pursuant to Indiana Code Subsection 22-6-6-8(1)
[13] The Drivers argue that the trial court erred in granting the Union’s motion to
dismiss their claim pursuant to the Act on the ground that they failed to state a
claim upon which relief can be granted.
A complaint is not subject to dismissal unless it appears to a
certainty that the plaintiff would not be entitled to relief under any
set of facts. State v. Rankin (1973), 260 Ind. 228, 230, 294 N.E.2d
604, 606; First Nat. Bank of Danville v. Reynolds, (1986), Ind. App.,
491 N.E.2d 218, 220. The allegations of the complaint are taken
as true and the plaintiff is entitled to all reasonable inferences
which could be drawn therefrom. Id.; Gladis v. Melloh (1971), 149
Ind. App. 466, 469, 273 N.E.2d 767, 769. On appeal from a
denial of a motion to dismiss, we apply essentially the same
standard as the trial court to see whether the trial court acted
properly in denying the Motions to Dismiss under T.R. 12(B)(6).
Iglesias v. Wells, (1982), Ind. App., 441 N.E.2d 1017, 1018.
Bentz Metal Prod. Co. v. Stephans, 657 N.E.2d 1245, 1247 (Ind. Ct. App. 1995).
[14] We conclude that the Drivers have stated a claim under Indiana law upon
which relief can be granted and over which we have jurisdiction.
The doctrine of primary jurisdiction … arises out of the United
States Supreme Court’s interpretation of the National Labor
Relations Act (NLRA). San Diego Building Trades Council v.
Garmon (1959), 359 U.S. 236, 79 S. Ct. 773, 3 L.Ed.2d 775. In
Garmon the Supreme Court held that Congress intended that
matters of national labor policy be decided in the first instance by
the NLRB. To protect this intent the Supreme Court provided,
that as a general rule, federal courts do not have jurisdiction over
activity which is “arguably subject to § 7 or § 8 of the National
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Labor Relations Act.”[3] Garmon, at 245, 79 S. Ct. at 780, 3 L. Ed.
2d at 783.
The general rule of primary jurisdiction, however, has not been
given a broad mechanical application to bar all suits or defenses
that arise in labor relations cases from being decided by the courts.
Sears, Roebuck and Co. v. San Diego County District Council of
Carpenters (1978), 436 U.S. 180, 188-89, 98 S. Ct. 1745, 1753, 56 L.
Ed. 2d 209, 220.
Commc’n Workers of Am., Local 5900 v. Bridgett, 512 N.E.2d 195, 198 (Ind. Ct.
App. 1987) (footnote omitted).
[15] We have squarely held that “[t]he issue of membership status vel non is not
covered by sections 7 or 8 of the NLRA, and accordingly, not preempted by the
doctrine of primary jurisdiction.” Id. at 198; see also Commc’ns Workers of Am.,
Locals 5800, 5714 v. Beckman, 540 N.E.2d 117, 123 (Ind. Ct. App. 1989) (“Under
the reasoning of Bridgett, supra, we hold the trial court had jurisdiction to
consider the membership status of the Employees.”). We conclude that,
pursuant to Bridgett, the trial court erred in granting the Union’s motion to
dismiss the Drivers’ claim that they were required to become and/or remain
3
Section 7 of the NLRA provides as follows:
Employees shall have the right to self-organization, to form, join, or assist labor
organizations, to bargain collectively through representatives of their own choosing, and to
engage in other concerted activities for the purpose of collective bargaining or other mutual
aid or protection, and shall also have the right to refrain from any or all of such activities
except to the extent that such right may be affected by an agreement requiring membership
in a labor organization as a condition of employment as authorized in section 158(a)(3) of
this title.
29 U.S.C. §157. Section 8 defines what constitutes unfair labor practices by employers or labor
organizations. See 29 U.S.C. §158.
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members of the Union. The Drivers allege that the Union and the Employer
violated the Act by requiring them to become and/or remain members of the
Union; this is sufficient to state a claim which survives a Trial Rule 12(B)(6)
motion.
[16] In dismissing the Drivers’ claim pursuant to the Act, the trial court accepted the
Union’s argument that because the Clause was rendered void due to operation
of the Act, the Drivers claim that they were required to be members of the
Union must fail. The plain language of the Act, however, is not limited to the
use of union security provisions like the Clause but, instead, covers all
employer-union acts that compel union membership, i.e., “any act or practice
that violates [the Act.]” Ind. Code § 22-6-6-12(a)(1). Because it can be based
on any agreement between the Union and Employer, the fact that the Act has
voided the Clause is not fatal to the Drivers’ claim.
II. Whether This Court has Jurisdiction Over the
Drivers’ Claims Pursuant to Indiana Code
Subsection 22-6-6-8(2)
[17] The Drivers also claim that the Union and Employer have violated Indiana
Code subsection 22-6-6-8(2) by compelling them to pay dues to the Union over
their objections. The trial court concluded that it lacked subject matter
jurisdiction over this claim on the basis that federal law has preempted Indiana
law on such questions, depriving it of subject matter jurisdiction.
In ruling on a motion to dismiss for lack of subject matter
jurisdiction, the trial court may consider not only the complaint
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and motion but also any affidavits or evidence submitted in
support. In addition, the trial court may weigh the evidence to
determine the existence of the requisite jurisdictional facts.
….
If the facts before the trial court are not in dispute, then the
question of subject matter jurisdiction is purely one of law. Under
those circumstances no deference is afforded the trial court’s
conclusion because appellate courts independently, and without
the slightest deference to trial court determinations, evaluate those
issues they deem to be questions of law. Thus, we review de novo a
trial court’s ruling on a motion to dismiss under Trial Rule
12(B)(1) where the facts before the trial court are undisputed.
GKN Co. v. Magness, 744 N.E.2d 397, 400-01 (Ind. 2001) (citations and
quotation marks omitted).
[18] The Drivers contend that the trial court erred in concluding that federal labor-
law preempts state law in the area of dues checkoff authorizations. It is well-
settled, however, that “congressional regulation of checkoff is ‘sufficiently
pervasive and encompassing to pre-empt’ the force of the state statute which ‘is
inconsistent with the federal law and hence can properly have no application in
this suit.’” See, e.g., SeaPak v. Indus., Tech. & Prof’l Emps., Div. of Nat’l Mar.
Union, AFL-CIO, 300 F. Supp. 1197, 1199 (S.D. Ga. 1969) (quoting Int’l Bhd. of
Operative Potters, AFL and CIO et al. v. Tell City Chair Co., 295 F. Supp. 961, 965
(S.D. Ind. 1968)), aff’d, 423 F.2d 1229 (5th Cir. 1970), aff’d, 400 U.S. 985 (1971).
Although the Supreme Court affirmed the district court’s opinion in SeaPak
without opinion, it has held that “the precedential effect of a summary
affirmance can extend no farther than ‘the precise issues presented and
necessarily decided by those actions.’” Ill. State Bd. of Elections v. Socialist
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Workers Party, 440 U.S. 173, 182 (1979). Because the precise issue of whether
states have any room to act in the area of dues authorization checkoffs was
presented and necessarily decided in SeaPak, the Supreme Court’s summary
affirmance lent it binding precedential effect.
[19] In summary, United States Supreme Court precedent holds that congressional
regulation of dues checkoffs is so pervasive as to totally displace a state’s ability
to act in the field. The Drivers contend that federal law is clear that when an
employee who has executed a dues checkoff authorization leaves an employer,
the authorization is void and without effect if the employee later returns. Even
if this is true, our hands are tied; the validity of a dues checkoff authorization is
a matter of federal law pursuant to the binding precedent of Seapak.4
Conclusion
[20] We conclude that the Drivers’ claim that the Union and Employer have
required them to remain members of the Union in violation of the Act is a
claim upon which relief can be granted. Consequently, we reverse the trial
court’s grant of the Union’s motion to dismiss this claim. However, we
conclude that the Drivers’ claim based on the Dues Checkoffs is a claim over
4
It is worth noting that all of the authority cited by the Drivers on this point is either an NLRB decision or
an opinion issued by a federal Circuit Court of Appeals. Appellant’s Br. p. 24.
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which Indiana courts have no jurisdiction. We affirm the trial court’s dismissal
of that claim and its associated claim of money had and received.
[21] We affirm the judgment of the trial court in part, reverse in part, and remand
for further proceedings consistent with this opinion.
Najam, J., and May, J., concur.
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