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Friday, April 06, 2012

Ind. Decisions - 7th Circuit decides one Indiana case today

In Copeland v. Penske Logistics (SD Ind., Young), a 6-page opinion, Chief Judge Easterbrook writes:

Penske Logistics provided transportation services for the Indianapolis Star newspaper between 1999 and 2009. When the end of the contract approached, the Star put the work up for bids, and Penske Logistics lost. It informed the employees’ union (Teamsters Local 135) that it would cease operations on May 19, 2009. The collective bargaining agreement between Penske Logistics and the Union expired two days later. As the Star was Penske Logistics’ only customer, the business itself would be discontinued. * * *

In this court plaintiffs advance two lines of argument. One is that Penske Logistics failed to give them all benefits available under its contract (the “logistics agreement”) with the Star. Plaintiffs describe themselves as third-party beneficiaries of the logistics agreement. One paragraph in the logistics agreement provides that, if Penske Logistics agrees to provide its workers with severance benefits should it lose the business (as it did), the Star will cover the expense of these benefits. Plaintiffs say that, because Penske Logistics could have provided more generous benefits and shifted the cost to the Star, it was required to do so. The other line of argument is that the Union did not bargain hard enough with Penske Logistics to achieve extra benefits and should be held liable on that ground. * * *

To the extent the district court granted summary judgment to the defendants on the hybrid contract/DFR claim, the judgment is affirmed. With respect to the plaintiffs’ claims based on the logistics agreement and the Union’s asserted failure to bargain harder for extra severance benefits, the judgment is vacated and the case is remanded with instructions to dismiss for lack of subject-matter jurisdiction.

Posted by Marcia Oddi on April 6, 2012 02:07 PM
Posted to Ind. (7th Cir.) Decisions