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Vegas v. United Steel Workers

United States District Court, D. Hawaii

December 18, 2014

UNITED STEEL WORKERS, LOCAL 12-591; et al., Defendants

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For Michael Vegas, Plaintiff: Georgette Anne Yaindl, LEAD ATTORNEY, Preventive Law Hawaii LLLC, Hilo, HI.

For United Steelworkers, headquartered in Pennsylvania, Defendant: Ashley K Ikeda, Stephanie L. Marn, LEAD ATTORNEYS, Weinberg Roger & Rosenfeld, Union Plaza, Honolulu, HI; Keren Wheeler, LEAD ATTORNEY, PRO HAC VICE, Pittsburgh, PA.

For USW, AFL-CIO, Local 12-591, headquartered in Washington, Defendant: Ashley K Ikeda, Stephanie L. Marn, LEAD ATTORNEYS, Weinberg Roger & Rosenfeld, Union Plaza, Honolulu, HI.

For Tesoro Corporation, headquartered in Texas, Par Petroleum Corporation, headquartered in Texas, Hawaii Independent Energy, headquartered in Texas, Defendants: Christie M. Trenholme, Patrick H. Jones, LEAD ATTORNEYS, Marr Jones & Wang LLLP, Pauahi Tower, Honolulu, HI.

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Susan Oki Mollway, Chief United States District Judge.


Plaintiff Michael Vegas alleges that he was wrongfully terminated by his employer and that his union did not fairly represent him in subsequent grievance proceedings. Defendants move for summary judgment, arguing that Vegas cannot demonstrate that his discharge was both contrary to the collective bargaining agreement and that his union breached its duty of fair representation.

This case involves what is known as a " hybrid" claim in the context of claims by unionized employees. The record includes evidence supporting Vegas's employer's determination that Vegas fraudulently claimed to have been sent wrong items in a company-sponsored incentive program, that Vegas returned the items and sought to exchange them for more expensive items, and that Vegas lied during the employer's investigation of his actions. Vegas's employer reasonably relied on FedEx packing slips indicating that the weights of the items shipped to Vegas differed greatly from the weights of the items he returned, and on the unavailability of the items returned in the shipper's stock at the time the items were allegedly sent. Based on this same evidence, Vegas's union, United Steelworkers, Local 12-591, rationally decided not to take Vegas's grievance to arbitration, instead deeming it unlikely that Vegas would recover in an arbitration and opting to settle the matter. The court, concluding that Vegas identifies no triable issue as to his " hybrid" claim, grants summary judgment in favor of Defendants.


Vegas began working for BHP at an oil refinery on the West side of Oahu on October 7, 1991. See Deposition of Michael Vegas at 75-76, ECF No. 65-2, PageID #s 472-73.

Tesoro bought BHP in the mid-1990s. Id. at 78, PageID # 474. Vegas received Tesoro's Code of Business Conduct, Doing the Right Thing. Id. at 79, PageID # 475; ECF No. 65-2, PageID # 491 (October 18, 2001, acknowledgment of receipt). This code expressed Tesoro's " core values," including honesty and integrity. Id., PageID # 494. It required Tesoro employees to " Always obey the law and act in a professional, honest, and ethical manner when acting on behalf of or as a representative of the company." Id., PageID # 504. It also required Tesoro employees to " Cooperate and tell the whole truth when responding to an investigation or audit." Id.

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Clayton Tamashiro, a human resources manager for Tesoro, stated that Tesoro had a " safety incentive program" called " LOKAHI," which stood for " Leading Onward, Keeping All Employees Healthy & Industrious." See Declaration of Clayton Tamashiro ¶ ¶ 1, 2, ECF No. 65-3, PageID # 533. Through this program, Tesoro employees could earn points by completing approved safety activities, and the points could be redeemed for various rewards. The incentive program was run by an outside vendor, Inspirus, LLC, which provided for the online redemption of points. When a Tesoro employee redeemed points for merchandise, the merchandise was shipped directly to the employee by Inspirus, which was responsible for any return or exchange of the merchandise. Id. ¶ ¶ 2, 3, PageID # 533-34.

On or about July 2, 2012, Colleen Umathum of Inspirus informed Tamashiro of a possible fraudulent return by Vegas. Umathum told Tamashiro that, in January 2012, Vegas had returned a Bissell vacuum cleaner and had claimed to have redeemed his points for a more expensive Dyson vacuum cleaner. Umathon also told Tamashiro that, in June 2012, Vegas had returned a Lasko fan, claiming that he had redeemed points for a more expensive Dyson fan.

Umathum said that the shipping weights of the boxes sent to Vegas via FedEx were different from the shipping weights of the boxes returned by Vegas to Inspirus. For example, the box with the fan sent to Vegas weighed about 15 pounds, but the box with the fan Vegas returned weighed 4.5 pounds. Id. ¶ 4, PageID # 53; ECF No. 68-3, PageID # 325 (email from Umathum to Tamashiro). According to Umathum, FedEx records indicated that box with the vacuum cleaner sent to Vegas in January 2012 weighed 9.9 pounds, but the box he returned weighed 4.4 pounds. See ECF No. 63-8, PageID # 326. Umathum told Tamashiro that neither the Lasko fan nor the Bissell vacuum cleaner returned by Vegas was carried by Inspirus's distribution center. See ECF No. 63-8, PageID # 325. Inspirus appears to have offered some Lasko fans and Bissell vacuum cleaners, see ECF No. 81-2, PageID # 639 and 649 (copy of Inspirus's online catalog), but there is no evidence in the record that Inspirus carried the models Vegas returned or that those models were in stock at the relevant times. Umathum stated that, nevertheless, when the distribution center received the Bissell vacuum cleaner as a return from Vegas, it sent Vegas a Dyson vacuum cleaner. Id.

Tamashiro says that, based on the information from Inspirus, Tesoro initiated an investigation into possible misconduct by Vegas. See Tamashiro Decl. ¶ 4, ECF No. 65-3, PageID # 534.

On July 5, 2012, Tamashiro met with Vegas and Clyde Foreman, Tesoro's regional security manager, regarding Vegas's redemption of points and the return of the Lasko fan and the Bissell vacuum cleaner. See Tamashiro Decl. ¶ 5, ECF No. 65-3, PageID # 535. Asked about the differences in shipping weights, Vegas had no explanation other than to suggest that someone at Inspirus or FedEx may have switched the merchandise. In July 2012, Vegas was placed on administrative leave with pay pending further investigation. Id. Vegas says he grieved this suspension, although the court does not have before it an initial grievance document relating to the suspension. See Vegas Decl. ¶ 14, ECF No. 81, PageID # 632.

Article 19 of Tesoro's collective bargaining agreement governs the grievance process. Section 19.01 establishes a " Worker's Committee" with not more than five Tesoro employees. See ECF No. 63-20, PageID # 409. Under section 19.05 of the CBA, an employee is required to " seek

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direct adjustment with his/her supervisor" in a process called " Step One." Id. If the grievance is not resolved by the supervisor to the employee's satisfaction, a " Step Two" grievance may be instituted within 15 days of the supervisor's decision through a request by the Worker's Committee for a meeting with local management to discuss the grievance. Id. " The time and place of the meeting [would] be designated by the Local Management," which was to issue a written decision within 14 days of the meeting. Id., PageID # 410. Within thirty days of that decision, the union could request arbitration, which would be " Step Three" of the grievance process. Id.

At some point after Vegas's suspension, Umathum told Tamashiro that Inspirus had asked FedEx to look into Vegas's claim that the wrong box had been delivered. FedEx responded that it found no evidence of tampering or of Vegas's receipt of the wrong fan. Umathum sent copies of the FedEx labels for the shipping and return of the fans to Tamashiro. Id. ¶ 6, PageID #s 535-36. The FedEx tracking label for the fan sent to Vegas indicates that the box weighed 14.3 pounds. See ECF No. 63-8, PageID # 335; ECF No. 81-3, PageID # 645 (better copy of same). The tracking label for the fan returned by Vegas indicates that it weighed 9.5 pounds. See ECF No. 63-8, PageID # 333.

On or about July 17, 2012, United Steelworkers notified Tesoro that it wished to proceed to Step Two of the grievance procedure for Grievance Number THC-007-12. See ECF No. 81-7, PageID # 656. This document was copied to members of the Worker's Committee. Id.

No Step Two meeting with local management actually occurred concerning Vegas's July 2012 suspension, possibly because, on August 2, 2012, Tesoro terminated Vegas. Tesoro had determined that, in violation of its Code of Business Conduct, Vegas had attempted to defraud Inspirus by returning products of a lesser quality and value than the ones shipped to Vegas. See Tamashiro Decl. ¶ ¶ 7, 9, ECF No. 65-3, PageID # 537; ECF No. 63-4, PageID # 307 (termination letter). Tamashiro says that, at the time Vegas was terminated, Tamashiro knew of no other Tesoro employee who had had " issues with product returns . . . to Inspirus." Supp. Tamashiro Decl. ¶ 3, ECF No. 96-3, PageID # 811.

On August 6 or 7, 2012, United Steelworkers filed a written grievance on Vegas's behalf, which was also given number THC-007-12 (the same number assigned to the suspension grievance). The August 2012 grievance sought to rescind the termination, to remove all record of the incident from Vegas's file, and to have Vegas reimbursed for lost wages. See Tamashiro Decl. ¶ 10, ECF No. 65-3, PageID # 538; ECF N0 81-6, PageID # 653 (copy of grievance); ECF No. 63-6, PageID # 311 (same). Because it has the same grievance number as Vegas's purported grievance of his suspension, it appears that this document amended the earlier grievance, assuming an earlier grievance existed, and became a Step One grievance relating to the termination.

On August 12, 2012, Tamashiro responded to the grievance, as required by the CBA's Step One grievance procedure. Tamashiro's response stated that Tesoro did not believe that Tesoro had violated any provision of the CBA. See Tamashiro Decl. ¶ 11, ECF No. 65-3, PageID # 538. On or about August 15, 2012, Tesoro sent a letter to Vegas's union denying any violation of the CBA. See ECF No. 82-3, PageID # 701.

On September 12, 2012, Tesoro sent Vegas's union

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information and documents that the union had requested, including the information and documents obtained from Inspirus. See Tamashiro Decl. ¶ 12, ECF No. 65-3, PageID # 538-39; ECF No. 63-8, PageID #s 319-51.

In a letter dated October 16, 2012, the union (through Patricia Koge) asked that Vegas's grievance, THC-007-12, proceed to Step Two of the grievance process. See ECF No. 63-10, PageID # 359. Tamashiro says Tesoro received that letter on October 22, 2012. See Tamashiro Decl. ¶ 13, ECF No. 65-3, PageID # 539. That letter does not appear to have been a timely invocation of Step Two of the grievance process concerning Vegas's termination, as it does not appear to have been submitted within 15 days of Vegas's receipt of Tamashiro's response of August 12, 2012, as required by section 19.05 of the CBA.

On January 7, 2013, Tamashiro sent Vegas's union a letter indicating that its Step Two request was untimely. See ECF No. 63-11, PageID # 361. Gaylan Prescott, who worked for Vegas's union's international representative, says that, although Tesoro initially asserted the untimeliness of the Step Two grievance procedure request, Tesoro nevertheless " worked to resolve" it. See Declaration of Gaylan Prescott ¶ 13, ECF No. 63-19, PageID # 385.

At the beginning of 2013, Tesoro was preparing to shut down its refinery. It therefore met with the union to conduct " effects bargaining" and to resolve all outstanding grievances, including Vegas's. See Tamashiro Decl. ¶ 14, ECF No. 65-3, PageID # 539-40. Tesoro put aside its procedural objection to the timeliness of the request for a Step Two grievance proceeding. See Prescott Decl. ¶ 16, ECF No. 63-19, PageID # 386.

Because Prescott thought Vegas would lose in any arbitration and believed that settling the grievance was in Vegas's best interest, the union proposed to settle Vegas's grievance for $12,500. See id. ΒΆ 22, PageID # 388; ECF No. 63-14, PageID # 367. A few weeks later, Tesoro made a ...

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