                                                                                                                           Opinions of the United
1997 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-7-1997

Local 787 v. Textron Lycoming
Precedential or Non-Precedential:

Docket 96-7261




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Filed July 7, 1997

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 96-7261

UNITED AUTOMOBILE, AEROSPACE AND
AGRICULTURAL IMPLEMENT WORKERS OF AMERICA,
INTERNATIONAL UNION AND ITS LOCAL 787,
APPELLANT

v.

TEXTRON LYCOMING RECIPROCATING ENGINE
DIVISION, AVCO CORP.,
APPELLEE

On Appeal From the United States District Court
For the Middle District of Pennsylvania
(D.C. Civ. No. 95-cv-01918)

Argued: JANUARY 30, 1997

Before: BECKER, ROTH, Circuit Judges,
BARRY, District Judge.*

(Filed: July 7, 1997)




_________________________________________________________________
*Honorable Maryanne Trump Barry, United States District Judge for the
District of New Jersey, sitting by designation.
JORDAN ROSSEN, ESQUIRE
General Counsel
International Union, United
 Automobile Aerospace and
 Agricultural Implement
 Workers of America, UAW
8000 East Jefferson Avenue
Detroit, Michigan 48214

STEPHEN A. YOKICH, ESQUIRE
(ARGUED)
Associate General Counsel
International Union, United
 Automobile Aerospace and
 Agricultural Implement
 Workers of America, UAW
1757 "N" Street, NW
Washington, DC 20036

Attorneys for Appellant

BARRY SIMON, ESQUIRE (ARGUED)
GARY M. TOCCI, ESQUIRE
Schnader, Harrison, Segal, & Lewis
1600 Market Street, Suite 3600
Philadelphia, PA 19103

CHARLES J. McKELVEY, ESQUIRE
McNerney, Page, Vanderlin & Hall
433 Market Street
P.O. Box 7
Williamsport, PA 17703

Attorneys for Appellee

OPINION OF THE COURT

BECKER, Circuit Judge.

This is an appeal by the United Automobile, Aerospace
and Agricultural Implement Workers of America ("UAW")
and its Local 787 from the district court's order dismissing
its complaint against defendant Textron Lycoming

                    2
Reciprocating Engine Division, Avco Corp. ("Textron"), for
lack of subject matter jurisdiction under § 301(a) of the
Labor Management Relations Act, 29 U.S.C. § 185(a). The
district court found that the UAW's suit, which seeks a
declaration that the collective bargaining agreement
between the parties is voidable because it was secured by
fraud in the inducement, was not a "[s]uit for violation of [a]
contract[ ] between an employer and a labor organization
representing employees" within the meaning of § 301(a).

The UAW's appeal requires us to consider the scope of
§ 301(a) and our decision in Mack Trucks, Inc. v.
International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America, 856 F.2d 579
(3d Cir. 1988). In that case, Mack Trucks sought a
declaratory judgment that the collective bargaining
agreement between it and the UAW was valid and
enforceable, after the UAW had threatened to declare that
there was no agreement between the parties. We held that
§ 301(a) conferred subject matter jurisdiction, finding that
Mack Trucks' suit was a "suit for violation of[a] contract[ ]."
Id. at 588.

In urging us to affirm the district court's order in this
case, Textron contends that the suit filed by the UAW, here
the party seeking to establish jurisdiction, can be
distinguished from Mack Trucks in two respects. First,
Textron points out that, while the very existence of the
collective bargaining agreement was at issue in Mack
Trucks, the UAW here acknowledges the existence of the
agreement, and rather seeks a declaration that the
collective bargaining agreement between the parties is
voidable because it was secured by fraud in the
inducement. Second, while in Mack Trucks the plaintiff
wished to enforce the collective bargaining agreement, the
UAW here seeks the power to repudiate the agreement, and
Textron contends that § 301(a) does not supply jurisdiction
under such circumstances. Because we disagree with
Textron and conclude that the UAW's suit is a suit for
violation of a contract under § 301(a) and Mack Trucks, we
reverse.

                    3
I.

The complaint pleads the following facts which, since we
deal with a motion to dismiss, we must take as true. The
UAW represents employees at Textron's Williamsport,
Pennsylvania plant, at which the company manufactures
and assembles aircraft engines. This dispute arose from the
collective bargaining agreement between the parties that
covered the period from April 1, 1994 to April 1, 1997 and,
more specifically, the negotiations that produced that
agreement. Prior to the commencement of negotiations, the
UAW submitted to Textron a request for information to aid
it in its preparations for the negotiations. One section of the
request asked whether Textron planned to subcontract out
any of the work that was being done by the UAW members
at the plant. The request specifically demanded any written
documents that Textron had prepared on the subject of
subcontracting. The UAW twice repeated this request. Prior
to the negotiations, Textron never disclosed any information
about plans to move bargaining unit work.

At the opening of the negotiations, the UAW renewed its
request that Textron disclose any plans to contract out the
work. Textron's vice-president for human resources, Frank
Ratchford, stated that he had no knowledge of any plans for
subcontracting, and also promised to make sure that his
knowledge was complete. Neither Ratchford nor any other
Textron official raised this issue again during negotiations.
The parties reached a collective bargaining agreement in
March 1994, which was ratified by the UAW membership at
the beginning of April 1994.

The UAW's complaint alleges that, during the
negotiations, Textron developed a plan to subcontract
certain bargaining unit work at the plant, but never
disclosed it to the UAW. According to the UAW's
submission, the plan was presented to and approved by
Textron's Board of Directors after the UAW membership
ratified the collective bargaining agreement. The
membership learned of the plan in June 1994.

The UAW alleges that about half of the union's members
at the plant will lose their jobs as a result of Textron's
subcontracting plan. It also represents that it would have

                    4
used a different bargaining strategy had it known of the
company's subcontracting plan. Instead, relying on the
company's denial of any such plan, the union made no
contract demands relating to the issue and did not pursue
its request for information on the subject. More specifically,
the union represents that it would not have agreed to the
"no-strike" provision in the collective bargaining agreement
had it known of the subcontracting plan.

The UAW's complaint in the District Court for the Middle
District of Pennsylvania sought a declaratory judgment that
the collective bargaining agreement was voidable at the
UAW's option because it was secured by fraud in the
inducement. The UAW relied on § 301(a) of the Labor
Management Relations Act, 29 U.S.C. § 185(a), for subject
matter jurisdiction. Textron moved to dismiss the complaint
on two grounds: (1) § 301(a) failed to confer subject matter
jurisdiction, Fed. R. Civ. P. 12(b)(1), because the National
Labor Relations Board ("NLRB") has exclusive jurisdiction
over the UAW's claims of bad faith bargaining; and (2) the
UAW failed to state a claim for relief that could be granted,
Fed. R. Civ. P. 12(b)(6), because it had failed to exhaust the
grievance process available under the collective bargaining
agreement.

The district court granted Textron's motion based on the
first ground, and, accordingly, did not reach the second
question. The court first concluded that the UAW sought
neither to enforce its rights under the collective bargaining
agreement nor to show that a collective bargaining
agreement existed; rather, the UAW had requested only a
declaration that Textron had violated its duty to bargain in
good faith under § 8 of the National Labor Relations Act
("NLRA") in negotiating the agreement. Having so
characterized UAW's suit, the district court found that it
lacked jurisdiction under § 301, and that the case was
within the exclusive jurisdiction of the NLRB.

Moreover, the court reasoned that, while we held in Mack
Trucks that a district court has jurisdiction to determine
whether a collective bargaining agreement exists, that
holding was "based on the principle that a district court
may enforce the parties' rights under a CBA, but may not
reach a claim which is independent of the contract." The

                    5
court found that the UAW's claim was independent of the
terms of the contract. It concluded finally that, "[i]n no way
can UAW's claim be classified as one for `violation of [a]
contract[ ] between an employer and a labor organization'
under § 301(a)." Order at 6.

The UAW appeals, contending that the district court
erred in concluding that § 301(a), as interpreted by our
decision in Mack Trucks, does not confer jurisdiction over
its suit. Our review of the order dismissing the complaint is
plenary. See Packard v. Provident Nat'l Bank, 994 F.2d
1039, 1044 (3d Cir. 1993).

II.

This case requires us to examine again the relationship
between the jurisdiction of the NLRB and that of the federal
district courts over labor cases. As we explained in Mack
Trucks, 856 F.2d at 584-85, under the preemption doctrine
of San Diego Building Trades Council v. Garmon, 359 U.S.
236, 245 (1959), "[w]hen an activity is arguably subject to
§ 7 or § 8 of the [National Labor Relations] Act, the States
as well as the federal courts must defer to the exclusive
competence of the National Labor Relations Board."1 The
purpose of the Garmon preemption doctrine is both to
ensure the uniform development of substantive labor law
rules and to entrust the development of those rules to an
administrative agency with particular labor law expertise.
See Vaca v. Snipes, 386 U.S. 171, 178-81 (1967); Mack
Trucks, 856 F.2d at 584.

This doctrine, however, "has never been rigidly applied to
cases where it could not fairly be inferred that Congress
intended exclusive jurisdiction to lie with the NLRB." Vaca,
386 U.S. at 179. In § 301(a) of the Labor Management
Relations Act, Congress "carved out" such an exception to
the exclusive jurisdiction of the NLRB over cases arguably
subject to § 7 or § 8 of the NLRA. Id. This section provides:
_________________________________________________________________

1. Section 7 of the NLRA concerns the right of employees to organize and
to engage in collective bargaining, 29 U.S.C. § 157, and § 8 prohibits
both employers and unions from committing "unfair labor practices" as
defined in the statute, id. § 158.

                    6
"Suits for violation of contracts between an employer and a
labor organization representing employees . . . may be
brought in any district court of the United States having
jurisdiction over the parties." 29 U.S.C. § 185(a). Hence, a
federal district court has jurisdiction over suits "for
violation of contracts between an employer and a labor
organization representing employees" under § 301(a) even if
the claimed harm may arguably constitute an unfair labor
practice under the NLRA. Under these circumstances--
when the challenged practice both violates the collective
bargaining agreement and is arguably subject to the NLRA
-- the federal district courts and the NLRB are said to
share "concurrent jurisdiction" over the suit. Mack Trucks,
856 F.2d at 585. In other words, the NLRB retains
exclusive jurisdiction over a claim only when the challenged
conduct is an unfair labor practice that is not also subject
to § 301(a) jurisdiction.

The purpose of § 301(a) was to encourage the judicial
enforcement of collective bargaining agreements. In
enacting § 301, Congress recognized the importance, for
promoting industrial peace, of " `assuring the enforceability
of [collective bargaining agreements]' in the courts." Id. at
587 (quoting Dowd Box Co. v. Courtney, 368 U.S. 502, 509
(1962)). Moreover, § 301 "authorizes federal courts to
fashion a body of law for the enforcement of . . . collective
bargaining agreements," Textile Workers Union v. Lincoln
Mills, 353 U.S. 448, 451 (1957), and, accordingly,
encourages the development of a such a body of law. As the
Supreme Court has explained, "[t]he strong policy favoring
judicial enforcement of collective-bargaining contracts was
sufficiently powerful to sustain the jurisdiction of the
district courts over enforcement suits even though the
conduct involved was arguably or would amount to an
unfair labor practice within the jurisdiction of the National
Labor Relations Board." Hines v. Anchor Motor Freight, Inc.,
424 U.S. 554, 562 (1976).

III.

In Mack Trucks, we considered whether § 301(a) supplied
subject matter jurisdiction over suits about the very
existence of a collective bargaining agreement, or whether

                   7
that section was limited to suits that posited the existence
of the agreement and merely alleged a breach of that
agreement. The UAW and Mack Trucks had reached an oral
agreement about the terms of a collective bargaining
agreement. While the parties were negotiating contract
language to reflect the oral agreement, the UAWfiled a
grievance alleging that Mack Trucks had unilaterally
implemented changes to that agreement. Soon after, the
union threatened that, unless the parties settled their
disputes and executed a written agreement within a certain
period of time, it would declare the agreement void. 856
F.2d at 582-83. Mack Trucks filed suit in federal district
court pursuant to § 301(a) seeking a declaratory judgment
that the new collective bargaining agreement was valid and
enforceable.

The UAW, in that case challenging § 301(a) jurisdiction,
responded that the court lacked jurisdiction because the
suit did not concern a contract claim, but rather implicated
only the duties under the NLRA to bargain collectively and
in good faith and to reduce the terms of an oral agreement
to writing, which are subject to the exclusive jurisdiction of
the NLRB. We rejected this argument, noting that even if a
suit is subject to the NLRB's jurisdiction, we must
determine whether it is also subject to § 301(a) jurisdiction.
We found further that Mack Trucks' suit did not turn
"solely on violations of good faith bargaining, or the duty to
execute an agreement . . . which would trigger the NLRB's
exclusive jurisdiction." Id. at 586 (citations omitted and
emphasis added).

We then addressed the central question, whether "suits
for violation of contracts" included suits concerning the
validity of a labor agreement, or whether § 301(a)
jurisdiction was limited to suits alleging violations of
particular contractual provisions in an existing collective
bargaining agreement. We noted that several courts of
appeals have limited jurisdiction to suits alleging a breach
of a particular provision of a collective bargaining
agreement. See A.T. Massey Coal Co. v. International Union,
United Mine Workers of America, 799 F.2d 142, 146 (4th
Cir. 1986); NDK Corp. v. Local 1550 of Commercial Workers
Int'l Union, 709 F.2d 491, 492-93 (7th Cir. 1983);

                    8
Hernandez v. National Packing Co., 455 F.2d 1252, 1253
(1st Cir. 1972).

Because § 301(a) "is not free from ambiguity, we
interpret[ed] § 301(a) in light of its legislative history,
congressional intent, and underlying policies." Mack Trucks,
856 F.2d at 586. In view of these sources, we first
concluded that limiting § 301(a) jurisdiction to suits that
presume the existence of a labor contract "ignores
Congress' broader concern that the courts -- as opposed to
the NLRB -- be granted authority to decide disputes of a
contractual nature." Id. at 588. We held that:

When, as here, a party seeks enforcement of a labor
agreement, and the other party denies the contract's
existence, the filing party's declaratory judgment action
constitutes an `enforcement' action. Congress intended
that contractual disputes be resolved by the courts
applying `usual processes of the law.' These principles
of law apply equally to cases involving breach of an
acknowledged contract and those involving a dispute
over the agreement's existence.

Id. (citation omitted). In so holding, we distinguished prior
cases in which we had found no § 301 jurisdiction on the
ground that the claims in those cases were each somehow
independent of the collective bargaining agreement. Id. at
589. For example, in one case, the plaintiffs claimed that
their collective bargaining agreement conflicted with a pre-
agreement contract of hire. See Leskiw v. Local 1470, Int'l
Bhd. of Elec. Workers, 464 F.2d 721 (3d Cir. 1972); see also
Adams v. Budd, 349 F.2d 368 (3d Cir. 1965); Medlin v.
Boeing Vertol Co., 620 F.2d 957 (3d Cir. 1980).

IV.

A.

The UAW, back before us and this time trying to
establish jurisdiction, contends that § 301(a) confers federal
jurisdiction over its complaint, characterizing Mack Trucks
as holding that § 301(a) jurisdiction exists for suits
involving questions about the enforceability of a collective

                    9
bargaining agreement. Textron responds that the district
court properly dismissed the UAW's complaint for lack of
subject matter jurisdiction under § 301(a) and Mack Trucks.
First, Textron points out that Mack Trucks dealt with
whether a collective bargaining agreement actually existed
between the parties. Because the UAW's claim here is that
the collective bargaining agreement is voidable (but not
void) because it was secured by fraud in the inducement,
and the UAW has acknowledged the existence of the
agreement, Mack Trucks does not, Textron submits, compel
the conclusion that § 301(a) confers jurisdiction. Second,
even if Mack Trucks establishes § 301(a) jurisdiction for
some suits that concern the enforceability of a collective
bargaining agreement, the argument continues, § 301(a)
supplies jurisdiction only when a party seeks to enforce a
collective bargaining agreement but not when a party seeks
to repudiate one, as in this case.

We agree with the UAW, and conclude that § 301(a), as
interpreted by Mack Trucks, confers jurisdiction over the
UAW's fraudulent inducement suit. Taking up first
Textron's contention that Mack Trucks does not supply
jurisdiction when the plaintiff seeks to repudiate the
agreement, we believe that the language of Mack Trucks
itself -- that a suit "involving a dispute over the
agreement's existence" is subject to § 301(a) jurisdiction --
compels the result that a party challenging an agreement's
existence can establish § 301(a) jurisdiction.2

Moreover, in Mack Trucks, we distinguished a case in
which the Fourth Circuit held, in a consolidated appeal,
that § 301(a) supplied jurisdiction over a union's suit for a
declaration that an existing collective bargaining agreement
applied to particular employers, but not to an employer's
suit challenging the existence of that agreement. See A.T.
Massey Coal Co., 799 F.2d at 146. We stated that this "view
fails to articulate a legal basis to justify jurisdiction in the
_________________________________________________________________

2. We acknowledged as much recently when we stated that the "basis of
Section 301 jurisdiction in Mack" was a claim that "no contract
exist[ed]." Beverly Enterprises--Pennsylvania, Inc. v. District 1199C
National Union of Hospital and Health Care Employees, 90 F.3d 93, 95
(3d Cir. 1996).

                    10
union case, but not in the employer's case." Mack Trucks,
856 F.2d at 588 n.10.

Additionally, we see no reason why the rationale behind
Mack Trucks -- that by enacting § 301(a) Congress intended
that the courts resolve disputes of a contractual nature,
including disputes over the agreement's very existence --
does not also apply when the party who files suit seeks a
declaration that the agreement is not enforceable. Our
conclusion is buttressed in policy terms by the UAW's
argument that jurisdiction lies in this case because the
union would have raised the fraudulent inducement claim
as an affirmative defense had it refused to abide by the
collective bargaining agreement and Textron hadfiled suit
under § 301 to enforce it: the development of a consistent
body of law in this area depends, in part, on federal court
jurisdiction over all claims of a contractual nature, no
matter who first resorts to court.

Textron also seeks to distinguish between suits
concerning the existence of an agreement and those
concerning its enforceability. As the foregoing discussion
suggests, we do not believe that there is any difference
under Mack Trucks between suits about the existence of a
collective bargaining agreement, i.e., seeking declaratory
judgment that the agreement is void, and suits, like this
one, about the enforceability of a collective bargaining
agreement, i.e., seeking declaratory judgment that an
agreement is voidable at the will of that party. The UAW's
suit clearly arises from a contractual dispute: a dispute
about whether a contract was secured by fraudulent
inducement is as much a contract dispute as a dispute
about a contract's existence. As we explained in Mack
Trucks, Congress intended that such suits be"resolved by
the courts applying `usual processes of the law.' " Mack
Trucks, 856 F.2d at 588.

The Ninth Circuit has already held that § 301(a) confers
jurisdiction over fraudulent inducement claims. See
Rozay's Transfer v. Local Freight Drivers, 850 F.2d 1321,
1326 (9th Cir. 1988) ("Section 301 . . . applies not only to
suits for breach of a collective bargaining agreement once it
is duly formed, but also to suits impugning the existence
and validity of a labor agreement, including those alleging

                    11
improper conduct or mistake during the formation of the
agreement." (citations omitted)); International Bhd. of
Teamsters v. American Delivery Serv. Co., 50 F.3d 770,
773-74 (9th Cir. 1995).

For the foregoing reasons, we conclude that § 301(a)
supplies jurisdiction over the UAW's suit alleging that
Textron secured the collective bargaining agreement
between the parties by fraud in the inducement.

B.

We are also unpersuaded by Textron's contention that
the UAW's suit does not give rise to § 301(a) jurisdiction
because it arises from pre-contract rights, that is, rights
that are "independent" of the collective bargaining
agreement. It bases this conclusion on its understanding
that the UAW's claims stem from the negotiation of the
agreement, not from an alleged violation of the terms of the
agreement itself, and as such, allege only a violation of the
duty to bargain in good faith under the NLRA. In making
this argument, Textron relies on several cases which we
distinguished in Mack Trucks, see 856 F.2d at 589, in
which we held that § 301(a) did not provide jurisdiction. See
Medlin v. Boeing Vertol Co., 620 F.2d 957 (3d Cir. 1980);
Leskiw v. Local 1470, Int'l Bhd. of Elec. Workers, 464 F.2d
721 (3d Cir. 1972); Adams v. Budd Co., 349 F.2d 368 (3d
Cir. 1965). In essence, Textron contends that the UAW's
claim is more akin to the pre-Mack Trucks cases than it is
to the suit in Mack Trucks.

In Adams, the plaintiffs, employees subject to a collective
bargaining agreement, sought jurisdiction under§ 301(a) to
press the claim that the union and Budd had conspired, in
negotiating the collective bargaining agreement, to deprive
them of rights contained in their pre-collective bargaining
agreement "contracts of hire." Recognizing that these
plaintiffs did not allege a violation of the collective
bargaining agreement, but rather a "violation by a labor
contract of rights which they assert were independently,
and pre-agreement, vested in them by their `contract of
hire,' " we held that the plaintiffs had not established
§ 301(a) jurisdiction. Adams, 349 F.2d at 370; accord

                    12
Leskiw, 464 F.2d at 723; see also Medlin, 620 F.2d at 962
(refusing to exercise jurisdiction under § 301(a) where the
plaintiffs' claims were based on rights independent of the
collective bargaining agreement: "[T]hese were not rights
arising in any way under the collective bargaining
agreement.").

We disagree with Textron, because the UAW's suit is not
akin to the pre-Mack Trucks cases. As we characterized
them in Beverly Enterprises, those cases held "that federal
courts lack Section 301 jurisdiction over challenges to
contracts on the basis that they conflicted with the NLRA or
some other external agreement." Beverly Enterprises --
Pennsylvania, Inc. v. District 1199C National Union of
Hospital and Health Care Employees, 90 F.3d 93, 95 (3d
Cir. 1996) (affirming dismissal of a complaint where the
plaintiff sought only a declaration that a clause in the
collective bargaining agreement violated § 8(a)(3) of the
NLRA). We thus reject Textron's contention that the
plaintiffs in Adams failed to establish§ 301(a) jurisdiction
because their claim turned solely upon adverse effects
arising from the negotiation of the collective bargaining
agreement. While we agreed with the defendant union's
argument in Adams that the suit had to do with the
negotiation of the agreement rather than whether the
agreement had been breached, see Adams, 349 F.2d at
369, our conclusion that § 301(a) did not confer jurisdiction
was based on the fact that the plaintiffs' suit alleged a
violation of their rights contained in a pre-agreement
contract, not on the fact that the plaintiffs' claim concerned
the negotiations rather than the collective bargaining
agreement itself.

Contrary to the pre-Mack Trucks line of cases, the UAW's
claim that the collective bargaining agreement was secured
by fraud in the inducement arises not out of the NLRA or
another contract, but out of the collective bargaining
agreement itself. The claim alleges flaws in the basic
formation of the collective bargaining agreement, and its
resolution is integral to the question whether the agreement
is enforceable. In other words, Textron's allegedly
fraudulent conduct goes to the heart of the enforceability of
the collective bargaining agreement between the parties.

                    13
Thus, the UAW is seeking to enforce rights that exist under
the collective bargaining agreement.

In short, the claim here can be adjudicated without
consideration of rights possessed by the parties under any
other agreement or the NLRA. As such, this case clearly
does not fall within the pre-Mack Trucks line of cases.
Hence, even if the UAW's claim could arguably constitute
an unfair labor practice under § 7 or § 8 of the NLRA, the
UAW's claim is not solely a claim under the NLRA, and is
subject to the concurrent jurisdiction of both the federal
district courts and the NLRB.3

The order of the district court dismissing the complaint
for lack of subject matter jurisdiction will be reversed and
the case remanded for further proceedings.4

A True Copy:
Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

_________________________________________________________________

3. In this regard, we note that it is not clear that the NLRB actually
would have jurisdiction over the UAW's fraudulent inducement claim.
According to the UAW, the duty to bargain in good faith under §§ 8(a)(5)
and 8(d) of the NLRA is qualitatively different from its fraud in the
inducement claim. While the claims of bad faith bargaining and of
fraudulent inducement may overlap both factually and legally, they are
not identical.

4. Textron has also argued that the UAW's complaint must be dismissed
because the union failed to exhaust the grievance procedures contained
in the collective bargaining agreement before filing suit. The district
court did not reach this issue when it dismissed the complaint, and
should do so on remand.

                    14
