Chauffeurs, Teamsters and Helpers, Local No. 391 v. Terry

Supreme Court of United States
494 U.S. 558 (1990)

ELI5:

Rule of Law:

The Seventh Amendment entitles an employee to a jury trial in an action against a union for breach of its duty of fair representation when the employee seeks only compensatory damages in the form of backpay.

Facts:

McLean Trucking Company and the Chauffeurs, Teamsters and Helpers Local No. 391 (Union) were parties to a collective-bargaining agreement covering 27 truckdrivers.
In 1982, McLean reorganized its terminals, transferred the 27 truckdrivers, and granted them special seniority rights over temporarily laid-off 'inactive' employees.
The truckdrivers were subsequently laid off and recalled several times, prompting them to file a grievance with the Union, alleging McLean was improperly favoring the inactive drivers.
A grievance committee initially ruled in the truckdrivers' favor, ordering their recall and the recognition of their special seniority rights.
Shortly thereafter, McLean recalled the inactive employees, which allowed them to regain seniority over the 27 truckdrivers.
During the next round of layoffs, the 27 truckdrivers were laid off first due to their new, lower seniority status.
The truckdrivers filed another grievance, but after a hearing where the Union presented the contentions of both the truckdrivers and the inactive employees, the committee ruled against the truckdrivers.
When the truckdrivers attempted to file a third grievance, the Union declined to refer it to a grievance committee.

Procedural Posture:

The respondents (truckdrivers) filed an action in U.S. District Court against McLean Trucking Company for breach of the collective-bargaining agreement and against the Union for breach of the duty of fair representation.
Subsequently, McLean filed for bankruptcy, and the action against it was voluntarily dismissed.
The Union filed a motion to strike the respondents' demand for a jury trial.
The District Court denied the Union's motion.
The Union filed an interlocutory appeal to the U.S. Court of Appeals for the Fourth Circuit.
The Court of Appeals affirmed the District Court's ruling.
The U.S. Supreme Court granted the Union's petition for a writ of certiorari to resolve a conflict among the circuit courts.

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Issue:

Does the Seventh Amendment entitle an employee to a jury trial in an action against a union for breach of its duty of fair representation when the employee's requested relief is limited to monetary damages for lost wages and benefits?

Opinions:

Majority - Justice Marshall

Yes. The Seventh Amendment entitles an employee to a jury trial in an action against a union for breach of its duty of fair representation when seeking backpay. To determine if a right to a jury trial exists for a statutory cause of action, the Court applies a two-part test. The first part compares the action to 18th-century English common law actions, while the second, more important part, examines the nature of the remedy sought. Here, the duty of fair representation claim is analogous to an equitable action against a trustee for breach of fiduciary duty. However, to succeed, the plaintiffs must also prove the employer breached the collective-bargaining agreement, which is analogous to a legal breach of contract claim. Because this first prong yields both legal and equitable analogs, the Court finds itself in equipoise. The Court then turns to the second prong, the remedy. The backpay sought is compensatory damages, a traditional form of legal relief, not equitable restitution, as the Union did not wrongfully hold the money. Because the remedy sought is legal, the Seventh Amendment right to a jury trial attaches to all issues in the suit.

Dissenting - Justice Kennedy

No. The Seventh Amendment does not guarantee a jury trial in this action. The majority correctly identifies that a suit for breach of the duty of fair representation is most analogous to an equitable action by a beneficiary against a trustee. Once this determination is made, the Seventh Amendment inquiry should end, as such equitable actions were not tried by juries. The majority errs by parsing out a 'legal' issue (the employer's breach of contract) from what is fundamentally a single, 'inextricably interdependent' equitable claim. The nature of the remedy does not convert an equitable action into a legal one, especially since courts of equity could and did award monetary relief comparable to the backpay sought here.

Concurring - Justice Brennan

Yes. While agreeing with the judgment, this opinion argues for simplifying the Seventh Amendment test. The first prong of the test, which requires comparing modern claims to 18th-century English forms of action, is needlessly convoluted, impracticable for judges, and should be eliminated. Seventh Amendment questions should be decided solely on the basis of the remedy sought. If the relief is legal in nature, such as money damages, a right to a jury trial exists, unless Congress has permissibly assigned the dispute to a non-Article III tribunal.

Concurring - Justice Stevens

Yes. While agreeing with the judgment, this opinion argues that the majority exaggerates the action's similarity to a trust claim and understates its similarity to a common-law attorney malpractice action, which is a legal claim. The issues in a duty of fair representation case, involving employment relationships and workplace disputes, are 'typical grist for the jury's judgment.' This strong analogy to a legal malpractice action, combined with the fact that such cases have historically been tried to juries, provides a sufficient basis for affirming the right to a jury trial without the majority's complex analysis of trust law.

Analysis:

This case solidifies the primacy of the 'nature of the remedy' in the Seventh Amendment analysis for modern causes of action. By holding that a request for compensatory monetary damages triggers the jury trial right even when the underlying duty is analogous to an equitable one, the Court reinforces a functional, remedy-focused approach over a strictly historical one. Justice Brennan's concurrence is particularly significant for its forceful critique of the historical prong of the test, signaling a potential future shift in the Court's Seventh Amendment jurisprudence toward a simpler, remedy-only inquiry. The decision ensures that individual employees seeking damages from unions for unfair representation can have their factual disputes resolved by a jury.

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