Chauffers, Teamsters & Helpers, Local No. 391 v. Terry

Justice MARSHALL delivered the opinion of the Court, except as to Part III-A.

This case presents the question whether an employee who seeks relief in the form of backpay for a union's alleged breach of its duty of fair representation has a right to trial by jury. We hold that the Seventh Amendment entitles such a plaintiff to a jury trial.

McLean Trucking Company and the Chauffeurs, Teamsters, and Helpers Local No. 391 (Union) were parties to a collective-bargaining agreement that governed the terms and conditions of employment at McLean's terminals. The 27 respondents were employed by McLean as truckdrivers in bargaining units covered by the agreement, and all were members of the Union. In 1982, McLean implemented a change in operations that resulted in the elimination of some of its terminals and the reorganization of others. As part of that change, McLean transferred respondents to the terminal located in Winston-Salem and agreed to give them special seniority rights in relation to “inactive” employees in Winston-Salem who had been laid off temporarily.

After working in Winston-Salem for approximately six weeks, respondents were alternately laid off and recalled several times. Respondents filed a grievance with the Union, contesting the order of the layoffs and recalls. [ . . . ]

[ . . . ]

In the next round of layoffs, then, respondents had lower priority than inactive drivers and were laid off first. Accordingly, respondents filed another grievance, alleging that McLean's actions were designed to circumvent the initial decision of the grievance committee.

[ . . . ]

McLean continued to engage in periodic layoffs and recalls of the workers at the Winston-Salem terminal. Respondents filed a third grievance with the Union, but the Union declined to refer the charges to a grievance committee on the ground that the relevant issues had been determined in the prior proceedings.

In July 1983, respondents filed an action in District Court, alleging that McLean had breached the collective-bargaining agreement in violation of § 301 of the Labor Management Relations Act, 1947, 61 Stat. 156, 29 U.S.C. § 185 (1982 ed.), and that the Union had violated its duty of fair representation. Respondents requested a permanent injunction requiring the defendants to cease their illegal acts and to reinstate them to their proper seniority status; in addition, they sought, inter alia, compensatory damages for lost wages and health benefits. In 1986 McLean filed for bankruptcy; subsequently, the action against it was voluntarily dismissed, along with all claims for injunctive relief.

Respondents had requested a jury trial in their pleadings. The Union moved to strike the jury demand on the ground that no right to a jury trial exists in a duty of fair representation suit. The District Court denied the motion to strike. After an interlocutory appeal, the Fourth Circuit affirmed the trial court, holding that the Seventh Amendment entitled respondents to a jury trial of their claim for monetary relief. . . . We granted the petition for certiorari to resolve a Circuit conflict on this issue, 491 U.S. 903, 109 S.Ct. 3183, 105 L.Ed.2d 692 (1989), and now affirm the judgment of the Fourth Circuit.

[ . . . ]

[ . . . ]

We turn now to the constitutional issue presented in this case-whether respondents are entitled to a jury trial. [Footnote 3] The Seventh Amendment provides that “[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.” The right to a jury trial includes more than the common-law forms of action recognized in 1791; the phrase “Suits at common law” refers to “suits in which legal rights [are] to be ascertained and determined, in contradistinction to those where equitable rights alone [are] recognized, and equitable remedies [are] administered.” . . . The right extends to causes of action created by Congress. . . . Since the merger of the systems of law and equity, see Fed.Rule Civ.Proc. 2, this Court has carefully preserved the right to trial by jury where legal rights are at stake. As the Court noted in Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 501, 79 S.Ct. 948, 952, 3 L.Ed.2d 988 (1959), “ ‘Maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care’ ” (quoting Dimick v. Schiedt, 293 U.S. 474, 486, 55 S.Ct. 296, 301, 79 L.Ed. 603 (1935)).

=====FOOTNOTE 3=====

Because the NLRA, 49 Stat. 449, 29 U.S.C. § 159(a) (1982 ed.), does not expressly create the duty of fair representation, resort to the statute to determine whether Congress provided for a jury trial in an action for breach of that duty is unavailing. . . .

=====Footnote End======

To determine whether a particular action will resolve legal rights, we examine both the nature of the issues involved and the remedy sought. “First, we compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. Second, we examine the remedy sought and determine whether it is legal or equitable in nature.” . . . The second inquiry is the more important in our analysis. . . .

An action for breach of a union's duty of fair representation was unknown in 18th-century England; in fact, collective bargaining was unlawful. . . . We must therefore look for an analogous cause of action that existed in the 18th century to determine whether the nature of this duty of fair representation suit is legal or equitable.

The Union contends that this duty of fair representation action resembles a suit brought to vacate an arbitration award because respondents seek to set aside the result of the grievance process. In the 18th century, an action to set aside an arbitration award was considered equitable. . . . In support of its characterization of the duty of fair representation claim, the Union cites United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981), in which we held that, for purposes of selecting from various state statutes an appropriate limitations period for a § 301 suit against an employer, such a suit was more analogous to a suit to vacate an arbitration award than to a breach of contract action. . . .

The arbitration analogy is inapposite, however, to the Seventh Amendment question posed in this case. No grievance committee has considered respondents' claim that the Union violated its duty of fair representation; the grievance process was concerned only with the employer's alleged breach of the collective-bargaining agreement. Thus, respondents' claim against the Union cannot be characterized as an action to vacate an arbitration award because “ ‘[t]he arbitration proceeding did not, and indeed, could not, resolve the employee's claim against the union.... Because no arbitrator has decided the primary issue presented by this claim, no arbitration award need be undone, even if the employee ultimately prevails.’ ” . . .

The Union next argues that respondents' duty of fair representation action is comparable to an action by a trust beneficiary against a trustee for breach of fiduciary duty. Such actions were within the exclusive jurisdiction of courts of equity. . . . This analogy is far more persuasive than the arbitration analogy. Just as a trustee must act in the best interests of the beneficiaries, 2A W. Fratcher, Scott on Law of Trusts § 170 (4th ed. 1987), a union, as the exclusive representative of the workers, must exercise its power to act on behalf of the employees in good faith, Vaca v. Sipes, 386 U.S., at 177, 87 S.Ct., at 909-910. Moreover, just as a beneficiary does not directly control the actions of a trustee, 3 Fratcher, supra, § 187, an individual employee lacks direct control over a union's actions taken on his behalf, see Cox, The Legal Nature of Collective Bargaining Agreements, 57 Mich.L.Rev. 1, 21 (1958).

The trust analogy extends to a union's handling of grievances. In most cases, a trustee has the exclusive authority to sue third parties who injure the beneficiaries' interest in the trust, 4 Fratcher, supra, § 282, pp. 25-29, including any legal claim the trustee holds in trust for the beneficiaries, Restatement (Second) of Trusts, supra, § 82, comment a. The trustee then has the sole responsibility for determining whether to settle, arbitrate, or otherwise dispose of the claim. . . . Similarly, the union typically has broad discretion in its decision whether and how to pursue an employee's grievance against an employer. . . . Just as a trust beneficiary can sue to enforce a contract entered into on his behalf by the trustee only if the trustee “improperly refuses or neglects to bring an action against the third person,” Restatement (Second) of Trusts, supra, § 282(2), so an employee can sue his employer for a breach of the collective-bargaining agreement only if he shows that the union breached its duty of fair representation in its handling of the grievance, DelCostello, supra, 462 U.S., at 163-164, 103 S.Ct., at 2289-2290. . . .

Respondents contend that their duty of fair representation suit is less like a trust action than an attorney malpractice action, which was historically an action at law. . . . In determining the appropriate statute of limitations for a hybrid § 301/duty of fair representation action, this Court in DelCostello noted in dictum that an attorney malpractice action is “the closest state-law analogy for the claim against the union.” . . . The Court in DelCostello did not consider the trust analogy, however. Presented with a more complete range of alternatives, we find that, in the context of the Seventh Amendment inquiry, the attorney malpractice analogy does not capture the relationship between the union and the represented employees as fully as the trust analogy does.

The attorney malpractice analogy is inadequate in several respects. Although an attorney malpractice suit is in some ways similar to a suit alleging a union's breach of its fiduciary duty, the two actions are fundamentally different. The nature of an action is in large part controlled by the nature of the underlying relationship between the parties. Unlike employees represented by a union, a client controls the significant decisions concerning his representation. Moreover, a client can fire his attorney if he is dissatisfied with his attorney's performance. This option is not available to an individual employee who is unhappy with a union's representation, unless a majority of the members of the bargaining unit share his dissatisfaction. . . . Thus, we find the malpractice analogy less convincing than the trust analogy.

Nevertheless, the trust analogy does not persuade us to characterize respondents' claim as wholly equitable. The Union's argument mischaracterizes the nature of our comparison of the action before us to 18th-century forms of action. As we observed in Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970), “The Seventh Amendment question depends on the nature of the issue to be tried rather than the character of the overall action.” . . . As discussed above, see supra, at 1344, to recover from the Union here, respondents must prove both that McLean violated § 301 by breaching the collective-bargaining agreement and that the Union breached its duty of fair representation. When viewed in isolation, the duty of fair representation issue is analogous to a claim against a trustee for breach of fiduciary duty. The § 301 issue, however, is comparable to a breach of contract claim-a legal issue.

Respondents' action against the Union thus encompasses both equitable and legal issues. The first part of our Seventh Amendment inquiry, then, leaves us in equipoise as to whether respondents are entitled to a jury trial.

Our determination under the first part of the Seventh Amendment analysis is only preliminary. . . . In this case, the only remedy sought is a request for compensatory damages representing backpay and benefits. Generally, an action for money damages was “the traditional form of relief offered in the courts of law.” . . . This Court has not, however, held that “any award of monetary relief must necessarily be ‘legal’ relief.” . . . Nonetheless, because we conclude that the remedy respondents seek has none of the attributes that must be present before we will find an exception to the general rule and characterize damages as equitable, we find that the remedy sought by respondents is legal.

First, we have characterized damages as equitable where they are restitutionary, such as in “action[s] for disgorgement of improper profits,” Tull, 481 U.S., at 424, 107 S.Ct., at 1839. . . . The backpay sought by respondents is not money wrongfully held by the Union, but wages and benefits they would have received from McLean had the Union processed the employees' grievances properly. Such relief is not restitutionary.

Second, a monetary award “incidental to or intertwined with injunctive relief” may be equitable. . . . Because respondents seek only money damages, this characteristic is clearly absent from the case. [Footnote 8]

=====FOOTNOTE 8=====

Both the Union and the dissent argue that the backpay award sought here is equitable because it is closely analogous to damages awarded to beneficiaries for a trustee's breach of trust. See post, at 1356. Such damages were available only in courts of equity because those courts had exclusive jurisdiction over actions involving a trustee's breach of his fiduciary duties. . . . The Union's argument, however, conflates the two parts of our Seventh Amendment inquiry. Under the dissent's approach, if the action at issue were analogous to an 18th-century action within the exclusive jurisdiction of the courts of equity, we would necessarily conclude that the remedy sought was also equitable because it would have been unavailable in a court of law. This view would, in effect, make the first part of our inquiry dispositive. We have clearly held, however, that the second part of the inquiry-the nature of the relief-is more important to the Seventh Amendment determination. See supra, at 1345. The second part of the analysis, therefore, should not replicate the “abstruse historical” inquiry of the first part, Ross v. Bernhard, 396 U.S. 531, 538, n. 10, 90 S.Ct. 733, 738, n. 10, 24 L.Ed.2d 729 (1970), but requires consideration of the general types of relief provided by courts of law and equity.

=====Footnote End=====

The Union argues that the backpay relief sought here must nonetheless be considered equitable because this Court has labeled backpay awarded under Title VII, of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1982 ed.), as equitable. . . . It contends that the Title VII analogy is compelling in the context of the duty of fair representation because the Title VII backpay provision was based on the NLRA provision governing backpay awards for unfair labor practices, 29 U.S.C. § 160(c) (1982 ed.) . . .

The Court has never held that a plaintiff seeking backpay under Title VII has a right to a jury trial. . . . Assuming, without deciding, that such a Title VII plaintiff has no right to a jury trial, the Union's argument does not persuade us that respondents are not entitled to a jury trial here. Congress specifically characterized backpay under Title VII as a form of “equitable relief.” . . . Congress made no similar pronouncement regarding the duty of fair representation. Furthermore, the Court has noted that backpay sought from an employer under Title VII would generally be restitutionary in nature, see Curtis v. Loether, supra, at 197, 94 S.Ct., at 1010, in contrast to the damages sought here from the Union. Thus, the remedy sought in this duty of fair representation case is clearly different from backpay sought for violations of Title VII.

Moreover, the fact that Title VII's backpay provision may have been modeled on a provision in the NLRA concerning remedies for unfair labor practices does not require that the backpay remedy available here be considered equitable. The Union apparently reasons that if Title VII is comparable to one labor law remedy it is comparable to all remedies available in the NLRA context. Although both the duty of fair representation and the unfair labor practice provisions of the NLRA are components of national labor policy, their purposes are not identical. Unlike the unfair labor practice provisions of the NLRA, which are concerned primarily with the public interest in effecting federal labor policy, the duty of fair representation targets “ ‘the wrong done the individual employee.’ ” . . . Thus, the remedies appropriate for unfair labor practices may differ from the remedies for a breach of the duty of fair representation, given the need to vindicate different goals. Certainly, the connection between backpay under Title VII and damages under the unfair labor practice provision of the NLRA does not require us to find a parallel connection between Title VII backpay and money damages for breach of the duty of fair representation.

We hold, then, that the remedy of backpay sought in this duty of fair representation action is legal in nature. Considering both parts of the Seventh Amendment inquiry, we find that respondents are entitled to a jury trial on all issues presented in their suit.

On balance, our analysis of the nature of respondents' duty of fair representation action and the remedy they seek convinces us that this action is a legal one. Although the search for an adequate 18th-century analog revealed that the claim includes both legal and equitable issues, the money damages respondents seek are the type of relief traditionally awarded by courts of law. Thus, the Seventh Amendment entitles respondents to a jury trial, and we therefore affirm the judgment of the Court of Appeals.

It is so ordered.

Justice BRENNAN, concurring in part and concurring in the judgment.

I agree with the Court that respondents seek a remedy that is legal in nature and that the Seventh Amendment entitles respondents to a jury trial on their duty of fair representation claims. I therefore join Parts I, II, III-B, and IV of the Court's opinion. I do not join that part of the opinion which reprises the particular historical analysis this Court has employed to determine whether a claim is a “Sui[t] at common law” under the Seventh Amendment, ante, at 1344-1345, because I believe the historical test can and should be simplified.

[ . . . ]

I believe that our insistence that the jury trial right hinges in part on a comparison of the substantive right at issue to forms of action used in English courts 200 years ago needlessly convolutes our Seventh Amendment jurisprudence. For the past decade and a half, this Court has explained that the two parts of the historical test are not equal in weight, that the nature of the remedy is more important than the nature of the right. . . . Since the existence of a right to jury trial therefore turns on the nature of the remedy, absent congressional delegation to a specialized decisionmaker, there remains little purpose to our rattling through dusty attics of ancient writs. The time has come to borrow William of Occam's razor and sever this portion of our analysis.

[ . . . ]

[ . . . ]

[ . . . ]

To rest the historical test required by the Seventh Amendment solely on the nature of the relief sought would not, of course, offer the federal courts a rule that is in all cases self-executing. Courts will still be required to ask which remedies were traditionally available at law and which only in equity. But this inquiry involves fewer variables and simpler choices, on the whole, and is far more manageable than the scholasticist debates in which we have been engaged. Moreover, the rule I propose would remain true to the Seventh Amendment, as it is undisputed that, historically, “[j]urisdictional lines [between law and equity] were primarily a matter of remedy.” . . . . [Footnote 7]

=====FOOTNOTE 7=====

There are, to be sure, some who advocate abolishing the historical test altogether. . . . Contrary to the intimations in Justice KENNEDY's dissent, see post, at 1359-1360, I am not among them. I believe that it is imperative to retain a historical test for determining when parties have a right to jury trial for precisely the same reasons Justice KENNEDY does. It is mandated by the language of the Seventh Amendment and it is a bulwark against those who would restrict a right our forefathers held indispensable. Like Justice KENNEDY, I have no doubt that courts can and do look to legal history for the answers to constitutional questions, see post, at 1359, and therefore the Seventh Amendment test I propose today obliges courts to do exactly that. Where Justice KENNEDY and I differ is in our evaluations of which historical test provides the more reliable results. That three learned Justices of the Supreme Court cannot arrive at the same conclusion in this very case, on what is essentially a question of fact, does not speak well for the judicial solvency of the current test. My concern is not merely the competence of courts to delve into this peculiarly recalcitrant aspect of legal history and certainly not, as Justice KENNEDY summarizes it, the “competence of the Court to understand legal history” in general. . . . My concern is that all too often the first prong of the current test requires courts to measure modern statutory actions against 18th-century English actions so remote in form and concept that there is no firm basis for comparison. In such cases, the result is less the discovery of a historical analog than the manufacture of a historical fiction. By contrast, the nature of relief available today corresponds more directly to the nature of relief available in Georgian England. Thus the historical test I propose, focusing on the nature of the relief sought, is not only more manageable than the current test, it is more reliably grounded in history.

=====Footnote End=====

[ . . . ]

[ . . . ]

[ . . . ]

[ . . . ]

We can guard this right and save our courts from needless and intractable excursions into increasingly unfamiliar territory simply by retiring that prong of our Seventh Amendment test which we have already cast into a certain doubt. If we are not prepared to accord the nature of the historical analog sufficient weight for this factor to affect the outcome of our inquiry, except in the rarest of hypothetical cases, what reason do we have for insisting that federal judges proceed with this arduous inquiry? It is time we read the writing on the wall, especially as we ourselves put it there.

Justice STEVENS, concurring in part and concurring in the judgment.

Because I believe the Court has made this case unnecessarily difficult by exaggerating the importance of finding a precise common-law analogue to the duty of fair representation, I do not join Part III-A of its opinion. Ironically, by stressing the importance of identifying an exact analogue, the Court has diminished the utility of looking for any analogue.

As I have suggested in the past, I believe the duty of fair representation action resembles a common-law action against an attorney for malpractice more closely than it does any other form of action. . . . Of course, this action is not an exact counterpart to a malpractice suit. Indeed, by definition, no recently recognized form of action-whether the product of express congressional enactment or of judicial interpretation-can have a precise analogue in 17th- or 18th-century English law. Were it otherwise the form of action would not in fact be “recently recognized.”

But the Court surely overstates this action's similarity to an action against a trustee. Collective bargaining involves no settlor, no trust corpus, and no trust instrument executed to convey property to beneficiaries chosen at the settlor's pleasure. Nor are these distinctions reified matters of pure form. The law of trusts originated to expand the varieties of land ownership in feudal England, and evolved to protect the paternalistic beneficence of the wealthy, often between generations and always over time. . . . Beneficiaries are protected from their own judgment. The attorney-client relationship, by contrast, advances the client's interests in dealings with adverse parties. Clients are saved from their lack of skill, but their judgment is honored. Union members, as a group, accordingly have the power to hire, fire, and direct the actions of their representatives-prerogatives anathema to the paternalistic forms of the equitable trust.

Equitable reasoning calibrated by the sophisticated judgment of the jurist, the accountant, and the chancellor is thus appropriately invoked when the impact of a trustee's conduct on the future interests of contingent remaindermen must be reviewed. However, the commonsense understanding of the jury, selected to represent the community, is appropriately invoked when disputes in the factory, the warehouse, and the garage must be resolved. In most duty of fair representation cases, the issues, which require an understanding of the realities of employment relationships, are typical grist for the jury's judgment. Indeed, the law defining the union's duty of fair representation has developed in cases tried to juries. Thus, Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967), was itself a jury trial as were, for example, Electrical Workers v. Foust, 442 U.S. 42, 99 S.Ct. 2121, 60 L.Ed.2d 698 (1979), and Bowen v. United States Postal Service, 459 U.S. 212, 103 S.Ct. 588, 74 L.Ed.2d 402 (1983).

As the Court correctly observed in Curtis v. Loether, 415 U.S. 189, 195, 94 S.Ct. 1005, 1009, 39 L.Ed.2d 260 (1974), “in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law.” As I had occasion to remark at an earlier proceeding in the same case, the relevant historical question is not whether a suit was “specifically recognized at common law,” but whether “the nature of the substantive right asserted ... is analogous to common law rights” and whether the relief sought is “typical of an action at law.” . . . Duty of fair representation suits are for the most part ordinary civil actions involving the stuff of contract and malpractice disputes. There is accordingly no ground for excluding these actions from the jury right.

In my view, the evolution of this doctrine through suits tried to juries, the useful analogy to common-law malpractice cases, and the well-recognized duty to scrutinize any proposed curtailment of the right to a jury trial “with the utmost care,” ante, at 1345, provide a plainly sufficient basis for the Court's holding today. I therefore join its judgment and all of its opinion except for Part III-A.

Justice KENNEDY, with whom Justice O'CONNOR and Justice SCALIA join, dissenting.

This case asks whether the Seventh Amendment guarantees the respondent union members a jury trial in a duty of fair representation action against their labor union. The Court is quite correct, in my view, in its formulation of the initial premises that must govern the case. Under Curtis v. Loether, 415 U.S. 189, 194, 94 S.Ct. 1005-1008, 39 L.Ed.2d 260 (1974), the right to a jury trial in a statutory action depends on the presence of “legal rights and remedies.” To determine whether rights and remedies in a duty of fair representation action are legal in character, we must compare the action to the 18th-century cases permitted in the law courts of England, and we must examine the nature of the relief sought. . . . I agree also with those Members of the Court who find that the duty of fair representation action resembles an equitable trust action more than a suit for malpractice. . . .

I disagree with the analytic innovation of the Court that identification of the trust action as a model for modern duty of fair representation actions is insufficient to decide the case. The Seventh Amendment requires us to determine whether the duty of fair representation action “is more similar to cases that were tried in courts of law than to suits tried in courts of equity.” . . . Having made this decision in favor of an equitable action, our inquiry should end. Because the Court disagrees with this proposition, I dissent.

[ . . . ]