International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Hoosier Cardinal Corporation/Opinion of the Court

Section 301 of the Labor Management Relations Act, 1947, confers jurisdiction upon the federal district courts over suits upon collective bargaining contracts. Nowhere in the Act, however, is there a provision for any time limitation upon the bringing of an action under § 301. The questions presented by this case arise because of the absence of such a provision.

The petitioner union and the respondent company were parties to a collective bargaining contract within the purview of § 301. The contract contained a section governing vacations. One clause in this section dealt with payment of accumulated vacation pay, by providing: 'Employees who qualified for a vacation in the pervious year and whose employment is terminated for any reason before the vacation is taken will be paid that vacation at time of termination.' On June 1, 1957, prior to the expiration of the contract, the company terminated the employment of employees covered by the agreement, but it did not pay them any accumulated vacation pay. Since that date, two lawsuits have been brought to recover amounts allegedly due. The first was a class action in early 1958, brought against the company in an Indiana court, but the court ruled that such an action was impermissible under Indiana law. In an attempt to remedy this pleading defect, the former employees assigned their vacation pay claims to a union representative who then filed an amended complaint, but this form of action, too, was held improper under Indiana law. Thereafter, by further amended complaints, the employees sought to reform and reinstitute the class action, but once again the trial court held the complaint insufficient as a matter of state law. The court dismissed the suit in June 1960, and the judgment of dismissal was affirmed on appeal. Johnson v. Hoosier Cardinal Corp., 134 Ind.App. 477, 189 N.E.2d 592.

Almost four years after the dismissal of that lawsuit by the Indiana trial court, and almost seven years after the employees had left the company, the union filed the present action in the United States District Court for the Southern District of Indiana. On the company's motion, the trial court dismissed the complaint, concluding that the suit was barred by a six-year Indiana statute of limitations. The court regarded this action as based partly upon the written collective bargaining agreement and partly upon the oral employment contract each employee had made, and it held that Indiana would apply to such a hybrid action its six-year statute governing contracts not in writing. Ind.Stat.Ann. § 2-601 (1965 Supp.). 235 F.Supp. 183. The Court of Appeals for the Seventh Circuit affirmed, 346 P.2d 242, and we granted certiorari, 382 U.S. 808, 86 S.Ct. 87, 15 L.Ed.2d 58.

We note at the outset that this action was properly brought by the union under § 301. There is no merit to the contention that a union may not sue to recover wages or vacation pay claimed by its members pursuant to the terms of a collective bargaining contract. Such a suit is among those '(s)uits for violation of contracts between an employer and a labor organization' that § 301 was designed to permit. This conclusion is unimpaired by the fact that each worker's claim may also depend upon the existence of his individual contract of employment. See J. I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 335-336, 64 S.Ct. 576, 88 L.Ed. 762. In Smith v. Evening News Assn., 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246, we rejected the view, once held for carying reasons by a majority of this Court, Association of Westinghouse Salaried Employees v. Westinghouse Corp., 348 U.S. 437, 75 S.Ct. 488, 99 L.Ed. 510, 'that § 301 did not give the * *  * courts jurisdiction over a suit brought by a union to enforce employee rights *  *  * characterized as *  *  * arising 'from separate hiring contracts between the employer and each employee." 371 U.S., at 198, 83 S.Ct. at 269. Alghough the Smith case was brought by an individual worker, there is every reason to recognize the union's standing to vindicate employee rights under a contract the union obtained. Such recognition is fully consistent with the language of § 301(b): 'Any *  *  * labor organization may sue *  *  * in behalf of the employees whom it represents in the courts of the United States.' 61 Stat. 156, 29 U.S.C. § 185(b) (1964 ed.). And indeed, the union's standing to vindicate employee rights under § 301 implements no more than the established doctrine that the union's role in the collective bargaining process does not end with the making of the contract.

Since this suit was properly brought under § 301, the question of its timeliness is squarely presented. It is clearly a federal question, for in § 301 suits the applicable law is 'federal law, which the courts must fashion from the policy of our national labor laws.' Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 918, 1 L.Ed.2d 972. Relying upon that statement and upon the coordinate principle that 'incompatible doctrines of local law must give way to principles of federal labor law,' Local 174 Teamsters, Chauffeurs, etc. v. Lucas Flour Co., 369 U.S. 95, 102, 82 S.Ct. 571, 7 L.Ed.2d 593, the union contends that this suit cannot be barred by a statute of limitations enacted by a State. We are urged instead to devise a uniform time limitation to close the statutory gap left by Congress. But the teaching of our cases does not require so bald a form of judicial innovation. Lincoln Mills instructs that, in fashioning federal law, the 'range of judicial inventiveness will be determined by the nature of the problem.' 353 U.S., at 457, 77 S.Ct. at 918. We do not question that there are problems so vital to the implementation of federal labor policy that they will command a high degree of inventiveness from the courts. The problem presented here, however, is not of that nature.

It is true that if state limitations provisions govern § 301 suits, these suits will lack a uniform standard of timeliness. It is also true that the subject matter of § 301 is 'peculiarly one that calls for uniform law.' Local 174 Teamsters, Chauffeurs, etc. v. Lucas Flour Co., supra, 369 U.S. at 103, 82 S.Ct. at 576. Our cases have defined the need for uniformity, however, in terms that are largely inapplicable here:

'The possibility that individual contract terms might have     different meanings under (two systems of law) would      inevitably exert a disruptive influence upon both the      negotiation and administration of collective agreements. Because neither party could be certain of     the rights which it had obtained or conceded, the process of      negotiating an agreement would be made immeasurably more      difficult by the necessity of trying to formulate contract      provisions in such a way as to contain the same meaning under      two or more systems of law which might someday be invoked in      enforcing the contract. Once the collective bargain was made,     the possibility of conflicting substantive interpretation      under competing legal systems would tend to stimulate and      prolong disputes as to its interpretation. Indeed, the     existence of possibly conflicting legal concepts might      substantially impede the parties' willingness to agree to      contract terms providing for final arbitral or judicial      resolution of disputes.

' * *  * The ordering and adjusting of competing interests      through a process of free and voluntary collective bargaining      is the keystone of the federal scheme to promote industrial      peace. State law which frustrates the effort of Congress to     stimulate the smooth functioning of that process thus strikes      at the very core of federal labor policy.' Local 174      Teamsters, Chauffeurs, etc. v. Lucas Flour Co., 369 U.S. 95,      103-104, 82 S.Ct. 571, 577.

The need for uniformity, then, is greatest where its absence would threaten the smooth functioning of those consensual processes that federal labor law is chiefly designed to promote the formation of the collective agreement and the private settlement of disputes under it. For the most part, statutes of limitations come into play only when these processes have already broken down. Lack of uniformity in this area is therefore unlikely to frustrate in any important way the achievement of any significant goal of labor policy. Thus, although a uniform limitations provision for § 301 suits might well constitute a desirable statutory addition, there is no justification for the drastic sort of judicial legislation that is urged upon us. See Smith v. Evening News Assn., supra, 371 U.S. at 203, 83 S.Ct., at 271 (Black, J., dissenting).

That Congress did not provide a uniform limitations provision for § 301 suits is not an argument for judicially creating one, unless we ignore the context of this legislative omission. It is clear that Congress gave attention to limitations problems in the Labor Management Relations Act, 1947; it enacted a six months' provision to govern unfair labor practice proceedings, 61 Stat. 146, 29 U.S.C. § 160(b) (1964 ed.), and it did so only after appreciable controversy. In this context, and against the background of the relationship between Congress and the courts on the question of limitations provisions, it cannot be fairly inferred that when Congress left § 301 without a uniform time limitation, it did so in the expectation that the courts would invent one. As early as 1830, this Court held that state statutes of limitations govern the timeliness of federal causes of action unless Congress has specifically provided otherwise. McCluny v. Silliman, 3 Pet. 270, 277, 7 L.Ed. 676. In 1895, the question was re-examined in another context, but the conclusion remained firm. Campbell v. City of Haverhill, 155 U.S. 610, 15 S.Ct. 217, 39 L.Ed. 280. Since that time, state statutes have repeatedly supplied the periods of limitations for federal causes of action when federal legislation has been silent on the question. E.g., McClaine v. Rankin, 197 U.S. 154, 25 S.Ct. 410, 49 L.Ed. 702; Cope v. Anderson, 331 U.S. 461, 67 S.Ct. 1340, 91 L.Ed. 1602 (National Bank Act); Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241 (Sherman Act); O'Sullivan v. Felix, 233 U.S. 318, 34 S.Ct. 596, 58 L.Ed. 980 (Civil Rights Act of 1870); Englander Motors, Inc. v. Ford Motor Co., 293 F.2d 802 (C.A.6th Cir.) (Clayton Act); but see Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743. (Federal Farm Loan Act). Yet when Congress has disagreed with such an interpretation of its silence, it was spoken to overturn it by enacting a uniform period of limitations. E.g., 69 Stat. 283, 15 U.S.C. § 15b (1964 ed.) (Clayton Act); 35 U.S.C. § 286 (Patent Act). See also Herget v. Central Bank Co., 324 U.S. 4, 65 S.Ct. 505, 89 L.Ed. 656. Against this background, we cannot take the omission in the present statute as a license to judicially devise a uniform time limitation for § 301 suits.

Accordingly, since no federal provision governs, we hold that the timeliness of a § 301 suit, such as the present one, is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations. This leaves two subsidiary questions to be decided. Which of Indiana's limitations provisions governs? Does any tolling principle preserve the timeliness of this action?

The union argues that if the timeliness of this action is to be determined by reference to Indiana statutes, federal law precludes reference to the Indiana six-year provision governing contracts not in writing. Reference must be made instead, it is urged, to the Indiana 20-year provision governing written contracts. Ind.Stat.Ann. § 2-602 (1965 Supp.). This contention rests on the view that under federal law this § 301 suit must be regarded as exclusively bottomed upon the written collective bargaining agreement. We agree that the characterization of this action for the purpose of selecting the appropriate state limitations provision is ultimately a question of federal law. Textile Workers Union of America v. Lincoln Mills, of Alabama supra; McClaine v. Rankin, supra. But there is no reason to reject the characterization that state law would impose unless that characterization is unreasonable or otherwise inconsistent with national labor policy, Cf. Reconstruction Finance Corp. v. Beaver County, 328 U.S. 204, 210, 66 S.Ct. 992, 90 L.Ed. 1172; De Sylva v. Ballentine, 351 U.S. 570, 580-582, 76 S.Ct. 974, 979-980, 100 L.Ed. 1415.

Applying this principle, we cannot agree that federal law requires that this action be regarded as exclusively based upon a written contract. For purposes of § 301 jurisdiction, we have rejected the view that a suit such as this is based solely upon the separate hiring contracts, frequently oral, between the employer and each employee. Smith v. Evening News, Assn., supra. It does not follow, however, that the separate contracts of employment may not be taken into account in characterizing the nature of a specific § 301 suit for the purpose of selecting the appropriate state limitations provision. Indeed, as the present case indicates, consideration of the separate contracts for that purpose is entirely acceptable. The petitioner seeks damages based upon an alleged breach of the vacation pay clause in a written collective bargaining agreement. Proof of the breach and of the measure of damages, however, both depend upon proof of the existence and duration of separate employment contracts between the employer and each of the aggrieved employees. Hence, this § 301 suit may fairly be characterized as one not exclusively based upon a written contract.

Moreover, the characterization that Indiana law imposes upon this action does not lead to any conflict with federal labor policy. Indeed, to the extent that a policy is manifest in the Labor Management Relations Act, it supports acceptance of the characterization adopted here. The six months' provision governing unfair labor practice proceedings, 61 Stat. 146, 29 U.S.C. § 160(b), suggests that relatively rapid disposition of labor disputes is a goal of federal labor law. Since state statutes of limitations governing contracts not exclusively in writing are generally shorter than those applicable to wholly written agreements, their applicability to § 301 actions comports with that goal. There may, of course, be § 301 actions that can only be characterized fairly as based exclusively upon a written agreement. But since many § 301 actions for wages or other individual benefits will concern employment contracts of the sort involved here, there is no reason to inhibit the achievement of an identifiable goal of labor policy by precluding application of the generally shorter limitations provisions.

Accordingly, we accept the District Court's application of the six-year Indiana statute of limitations to this action. Cf. Bernhardt v. Polygraphic Co., 350 U.S. 198, 204-205, 76 S.Ct. 273, 276, 277, 100 L.Ed. 199; Steele v. General Mills, 329 U.S. 433, 438, 67 S.Ct. 439, 442, 91 L.Ed. 402. Thus, since this federal lawsuit was not filed until almost seven years after the cause of action accrued, the cause is barred by the six-year statute unless that statute was somehow tolled by reason of the particularized circumstances of this case.

The contention that some tolling principle saves the life of this action was raised for the first time in this Court. In any event, we find the contention without merit. In Burnett v. New York Central R. Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941, we held that the bringing of a timely action under the Federal Employers' Liability Act in a state court, even though venue was improper, served to toll the statute of limitations contained in that Act. The primary underprinning of Burnett, however, is wholly lacking here. As the Court noted in that case, a tolling principle was necessary to implement the national policy of a uniform time bar clearly expressed by Congress when it enacted the FELA limitations provision. 380 U.S. at 434, 85 S.Ct. at 1058. Section 301 of the Labor Management Relations Act establishes no such policy of uniformity expressed in a national limitations provision. Moreover, unlike the plaintiff in Burnett who could no longer bring a timely federal action after the state court dismissed his complaint, the union here had a full three years to bring this lawsuit in federal court after the dismissal of the state court action. Under these circumstances, we have no difficulty in concluding that this cause of action expired in June 1963, six years after it arose.

Affirmed.

Mr. Justice WHITE, with whom Mr. Justice DOUGLAS and Mr. Justice BRENNAN join, dissenting.