Nagel v. United Food and Commercial Workers Union, Local 653

Background

The dispute arose from a March 4, 2018 collective bargaining agreement between United Food and Commercial Workers Union, Local 653, and SuperValu Cub Foods and other independent grocers. Under the prior agreement, employees with 30 years of qualifying employment could retire with full pension benefits under a “30-and-out” plan. Nagel alleged that Local 653 gave up that benefit while negotiating the new agreement and failed to tell union members before the ratification vote.

Nagel alleged that the union’s written materials did not disclose the loss of the pension benefit and incorrectly described the bargaining committee’s recommendation as unanimous, even though one committee member voted against it. He also alleged that union representatives answered questions about the pension plan only when members raised the subject and moved those members to another room, suppressing information from others. The amended complaint asserted a breach of the duty of fair representation and a violation of the Labor-Management Reporting and Disclosure Act.

Count 1: Duty of Fair Representation

Local 653 moved to dismiss Count 1 under Rule 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. The court held that Nagel did not adequately allege arbitrary conduct. A union’s bargaining decision is arbitrary only when it is so far outside a reasonable range that it is wholly irrational. The loss of a benefit for some members, member dissatisfaction, and the alleged concession of the benefit without further consideration were not enough, without additional supporting facts, to meet that standard.

The court also held that Nagel did not adequately allege discriminatory conduct. A union may balance the interests of different groups during collective bargaining, and an unfavorable result for some members does not by itself establish unlawful discrimination. Nagel’s allegations that the pension concession benefited some members at the expense of others did not sufficiently allege intentional discrimination unrelated to legitimate union objectives.

The court reached a different conclusion about bad-faith conduct. Bad faith requires facts supporting an inference of fraud, deceit, or dishonest conduct. The allegations that Local 653 concealed the pension change, falsely described the committee vote as unanimous, failed to provide information that its president had promised to provide, and instructed representatives to suppress questions about the pension plan plausibly supported such an inference.

The court also rejected Local 653’s argument that Nagel had to plead a detailed chain of hypothetical events proving that the pension benefit would ultimately have been preserved. The court held that Nagel sufficiently alleged that, if the union had disclosed the information, the members would not have ratified the proposed agreement and later negotiations could have produced a more favorable result. The court therefore granted in part and denied in part Local 653’s motion to dismiss Count 1, as described in the order.

Count 2: Labor-Management Reporting and Disclosure Act

Local 653 moved to dismiss Count 2 under Rule 12(b)(1), which permits dismissal when the court lacks subject-matter jurisdiction—the legal authority to hear the claim. The court held that the relevant Labor-Management Reporting and Disclosure Act provision protects union members against discrimination in the application of union rules. Although some courts recognize a broader right to a “meaningful” vote, the court concluded that controlling Eighth Circuit authority did not establish jurisdiction based only on the alleged denial of meaningful voting information without discrimination.

The amended complaint did not allege that Local 653 treated members differently when distributing information, establishing voting procedures, or conducting the ratification vote. Because Nagel did not allege the required discrimination, the court concluded that it lacked subject-matter jurisdiction over Count 2 and granted Local 653’s motion to dismiss that count.

Disposition

The order states that Local 653’s motion to dismiss was granted in part and denied in part as to Count 1, and granted as to Count 2. Judge Wilhelmina M. Wright signed the order on March 4, 2019.