Decided: April 11, 2013
The Fourth Circuit affirmed the decision of the district court and held that (1) the employees’ union had adequately consented to the notice of removal of the action to federal court; (2) that temporary employees who brought the action failed to state a claim for relief; and (3) the district court did not err granting a motion to strike the temporary employees’ motion for reconsideration.
Five current or former Temporary Employees of the Board of Education of Prince George’s County, Maryland (the “School Board”) filed a class action complaint in state court against the School Board and the employees’ labor union (the “Union) asserting employee-compensation claims. The Temporary Employees claimed that, even though a collective bargaining agreement (“CBA”) excluded “temporary employees” from the “bargaining unit,” they nonetheless should have been entitled to benefits of an arbitration award. The arbitration award at issue was based on a grievance filed by the Union against the School Board. The Union asserted that the School Board’s practice of hiring temporary or substitute employees and retaining them in the same position for more than 60 days was in violation of the CBA. The arbitrator decided the School Board’s conduct did, in fact, violate the CBA and issued a decision that directed, inter alia, the Union and School Board to reach a settlement agreement. Under the settlement agreement, the School Board agreed to pay over $1 million in back-pay and agreed to hire an additional number of full-time “bargaining unit employees.” The Temporary Employees subsequently filed a class action seeking a declaratory judgment that the arbitration award applied to their class as well as the permanent employees. They also claimed that the Union “breached its duty of fair representation by fraudulently misleading” the Temporary Employees about the arbitration decision and accepting a payoff from the School Board. The Temporary Employees also asserted that, based on being employed by the School Board for more than 60 days in the same position, should be considered third-party beneficiaries under the CBA and therefore entitled to the same compensation and benefits as full time employees.
The School Board filed a notice of removal, pursuant to 28 U.S.C. § 1441, in which they stated that the Union had been consulted and consented to the removal of the action to federal court. Shortly after the case was removed, the Union filed a motion to dismiss the complaint for failure to state a claim. The Temporary Employees opposed the motion to dismiss and filed a motion to remand the case back to state court. They argued that the Union’s should have been required to file its own notice of removal and, as a result, the removal was “defective.” The motion to remand was denied by the district court and it also dismissed all claims under Rule 12(b)(6). The Temporary Employees then filed notice of appeal and, several weeks later, filed a motion in the district court requesting reconsideration on the order dismissing the complaint. The School Board filed a motion to strike the motion for reconsideration on the grounds that it was untimely. The district court granted the School Board’s motion to strike. On appeal, the Temporary Employees asserted, inter alia, (1) that the Union’s consent to removal was inadequate; (2) that the district court incorrectly concluded the Union did not owe the temporary employees a duty of fair representation and they were not entitled to the arbitration award; (3) that the district court erred in dismissing the claim for breach of the CBA under the “third-party beneficiary theory”; and (4) that the district court abused its discretion by striking its motion for reconsideration.
First, the Fourth Circuit tackled the challenge to the removal petition. The court noted that it had not yet addressed the precise issue of what constituted adequate notice of removal for multiple defendants. The Temporary Employees asserted that because the Union had not signed the notice of removal nor did it file its own notice in a timely manner or provide written consent to the School Board’s notice, the removal was defective and should be remanded back to state court. The court admitted that the text of 28 U.S.C. § 1446, which provides the requirements for removal, “does not address how a case involving multiple defendants is to be removed or how the defendants must coordinate removal, if coordination is required.” Based on Supreme Court precedent, the only requirement was that of “unanimous consent” which requires all defendants to consent to removal. However, binding precedent had yet to specify, “how [multiple] defendants are to give their ‘consent’ to removal.” According to the court, some circuits have adopted a “formal approach” that requires a signature from all defendants to constitute a proper petition for removal. Other circuits have adopted a “less formal process” which is akin to what the defendants in this case did. The Fourth Circuit adopted the “less formal process” and concluded that, “a notice of removal signed and filed by an attorney for one defendant representing unambiguously that the other defendants consent to the removal satisfies the requirement of unanimous consent for purposes of removal.” Next the Fourth Circuit took up the Temporary Employees’ allegation that the Union breached its “duty of fair representation.” The Fourth Circuit affirmed the district court’s decision to dismiss the claim because it agreed with the lower court that the Union owed no duty to the Temporary Employees because the arbitrator’s decision limited the award only to “permanent employees” and expressly rejected including temporary employees who were not identified in the CBA as being part of the “bargaining unit.” In addition, the Fourth Circuit upheld the district court’s dismissal of the Temporary Employees’ “third-party beneficiaries” theory. The court again relied on the expressed language in the CBA that excluded Temporary Employees from the bargaining unit and, as a result, rejected the theory as against the plain language of the CBA. Finally, the Fourth Circuit agreed with the district court and affirmed its decision to grant the School Board’s motion to strike the motion to reconsider the court’s order dismissing the complaint. Though the district court did not provide any rationale for its decision on this issue, the Fourth Circuit surmised that it could have been decided based upon the fact that the Temporary Employees’ motion was filed after the 28-day period as governed by Rule 59(e) and, “more importantly,” the Temporary Employees did not advance a new argument that would require the district court to alter its judgment.
– John G. Tamasitis