Rule 206 ELECTRONIC CITATION: 2004 FED App. 0142P (6th Cir.) File Name: 04a0142p.06… v. Rbx Industries, Inc.

*Judge Daniel M. Friedman, Circuit Judge of the United States Court
of Appeals for the Federal Circuit, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0142P (6th Cir.)
File Name: 04a0142p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
CARL BAUER et al.,
Plaintiffs,
CRAIG M. BENNETT et al.,
Plaintiffs-Appellants,
v.
RBX INDUSTRIES, INC. et al.,
Defendants-Appellees.
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No. 02-4327
Appeal from the United States District Court
for the Northern District of Ohio at Akron.
No. 02-00415—James Gwin, District Judge.
Argued: March 12, 2004
Decided and Filed: May 17, 2004
Before: NELSON, MOORE, and FRIEDMAN, Circuit
Judges.*
2 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
_________________
COUNSEL
ARGUED: John L. Wolfe, Akron, Ohio, for Appellants.
David F. Dabbs, McGUIRE WOODS LLP, Richmond,
Virginia, Melvin P. Stein, UNITED STEELWORKERS OF
AMERICA, Pittsburgh, Pennsylvania, for Appellees.
ON BRIEF: John L. Wolfe, Akron, Ohio, for Appellants.
David F. Dabbs, Jonathan P. Harmon, McGUIRE WOODS
LLP, Richmond, Virginia, Melvin P. Stein, UNITED
STEELWORKERS OF AMERICA, Pittsb urgh,
Pennsylvania, Clair E. Dickinson, BROUSE McDOWELL,
Akron, Ohio, for Appellees.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. The
contentious relationship between a corporation and a group of
its former employees following the closing of a
manufacturing facility in Barberton, Ohio is the milieu for
this appeal. At issue is a significant question of whether
federal courts have the ability to hear claims filed pursuant to
§ 301 of the Labor Management Relations Act (“LMRA”), 29
U.S.C. § 185(a), and pursuant to the Employee Retirement
Income Security Act (“ERISA”), 29 U.S.C. § 1132, when an
accord reached between the corporation and the employees’
union terminates a previously negotiated Collective
Bargaining Agreement (“CBA”), the breach of which
provided the factual basis for both claims. Additionally, we
must evaluate the scope of the “right to sue” provision of the
Labor-Management Reporting and Disclosure Act
(“LMRDA”), 29 U.S.C. § 411, to determine whether a viable
LMRDA claim has been alleged.

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 3
1Initially, Carl Bauer and twenty-one other former employees of the
Barberton, Ohio factory filed this action. Five new plaintiffs were added
in April 2002. Only twenty of the twenty-seven Plaintiffs are parties to
the appea l. The nam ed Plaintiffs represent approximately 17% of the
bargaining unit formerly represented by Local Union # 77L, United Steel
W orkers of America (“Local 77L”).
2The Plaintiffs brought their action against RB X Industries, Inc. and
RBX Corporation (collectively “RBX ”). RBX Corp. is a Delaware
corporation, whose parent, RB X H oldings, Inc., had purchased Midwest’s
stock in 1990. RBX Industries, also known as RBX Reorganized, was
RBX Corp.’s successor-in-bankruptcy. Midwest merged into RBX
Industries on August 16, 2001. The Plaintiffs also named as defendants
three benefits plans and RB X in its capacity as administrator of those
plans: the Midwest Rubber Custom M ixing Corp. Unio n Ho urly
Employees Pension Plan (“Pension Plan”); the Midwest Rubber
Supplemental Unemployment Benefits Plan (“SUB Plan”); and the
Midwest Rubber Custom M ixing Corp. Union Hourly Employees Medical
and Life Insurance Plan (“Medical Plan”).
Plaintiffs-Appellants (“Plaintiffs”) were a group of former
employees1 at the Barberton, Ohio mixing facility owned by
Midwest Rubber Custom Mixing Corp. (“Midwest”), which
in turn was controlled by RBX Industries, Inc. (“RBX”).
Following the closure of the Barberton facility, the Plaintiffs’
national union, the United Steel Workers of America, AFL-
CIO (“USWA”), and RBX signed a Settlement agreement
(the “Settlement”) in April 2002, which abrogated the
previously negotiated CBA and purported to resolve all
disputes between RBX and its former employees. The
Plaintiffs filed an action against RBX, the USWA, and the
employees’ local union, Local Union # 77L, United Steel
Workers of America (“Local 77L”)2, alleging a “hybrid”
§ 301 breach of contract/breach of duty of fair representation
claim under the LMRA, 29 U.S.C. § 185(a), and various
claims relating to the denial of benefits under ERISA.
29 U.S.C. § 1132.
The district court granted RBX’s and the Unions’ motions
for summary judgment and denied Plaintiffs’ motion to
4 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
3Midwest and the employees had also previously negotiated the
Pension Plan, which is not at issue in this appeal and which was not
affected by the Settlement.
amend their complaint to include a claim under the LMRDA,
29 U.S.C. § 411. On appeal, the Plaintiffs argue that because
the district court did not have jurisdiction over their § 301
hybrid claim, it erred in reaching the merits of the § 301 and
ERISA claims, as it should have dismissed the action without
prejudice. The Plaintiffs also argue that the district court
erred in denying their motion to add the LMRDA claim. We
agree that the district court lacked jurisdiction over the
Plaintiffs’ § 301 and ERISA claims, and consequently we
VACATE the judgment of the district court and REMAND
with instructions that the district court dismiss the Plaintiffs’
action without prejudice. We AFFIRM the district court’s
denial of the Plaintiffs’ motion to amend the complaint to add
an LMRDA claim.
I. BACKGROUND FACTS AND PROCEDURE
A. The 1997 CBA
The effects of the Settlement can not be fully understood
without explaining the 1997 CBA, which the Settlement
superseded. The 1997 CBA was the latest in a series of pacts
negotiated between Midwest and Local 77L, and it tied in
several previously negotiated benefit plans. Two of these
plans are pertinent3: the Midwest Rubber Supplemental
Unemployment Benefits Plan (“SUB Plan”) and the Midwest
Rubber Custom Mixing Corp. Union Hourly Employees
Medical and Life Insurance Plan (“Medical Plan”), the latter
of which is also referred to as the “Agreement on Welfare
Benefits Programs.” With regard to the Medical Plan, the
1997 CBA stated, “It is recognized by the parties hereto that
the provisions as outlined in Section 1 Paragraph (a) of [the
CBA] may be applied to and shall include the [Pension Plan]
and the Agreement on Welfare Benefits Programs . . . .” Joint

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 5
Appendix (“J.A.”) at 1022 (art. XV, § 2(a)). Additionally, the
1997 CBA explicitly incorporated the SUB Plan. J.A. at 1022
(art XV, § 2(b)) (“It is recognized by the parties hereto that
the separate Agreement on [SUBs] . . . is a part of this
Agreement.”). Either Midwest, a committee appointed by
Midwest, or RBX, as Midwest’s successor, administered all
three plans and possessed discretionary authority to determine
eligibility, disburse benefits, and manage disputes.
1. The SUB Plan
The SUB Plan gave the Barberton employees “certain
Benefits in the event of their layoff,” J.A. at 284 (art. I),
which were “intended to supplement any State System
Benefits,” J.A. at 284, rather than replace them. The SUB
Plan provided for the disbursement of benefits and separation
payments at amounts commensurate with seniority. A
general trust fund served as the Plan’s only financial source.
Midwest was required to pay a certain amount into the fund
each month, but Midwest’s contribution could be offset or
reduced by the costs of providing medical benefits for laid-off
employees.
A Midwest employee at Barberton earned SUBs based
upon several factors. An employee accrued “credit units” for
each work week completed. The amount of the employee’s
SUBs consequently depended on seniority, whether that
employee had used his or her credit units for prior benefits,
and the status of the “fund position.” The SUB fund position
was determined by dividing the current market value of the
fund’s assets by a number proportional to the number of
covered employees. Credit units were canceled if the fund
position fell below a certain level. For example, if the fund
position fell below 80%, credit units were canceled in a
manner that rewarded seniority. If the fund position fell
below 4%, no SUBs were payable. The fund position also
determined the payment of separation payments: separation
payments would be distributed only if the fund position
equaled or exceeded 80%. If the fund position fell below
6 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
80%, the separation payments would be deferred until the
fund position exceeded 80%. The SUB Plan explicitly stated
that employees did not have any rights or vested interests in
the assets of the fund. J.A. at 322 (art. IX, § 5). Furthermore,
the SUB Plan’s existence was tied to the CBA’s: “Upon the
termination of the [CBA], [Midwest] shall have the right to
continue the Plan in effect and to modify, amend, suspend, or
terminate the Plan, except as may be otherwise provided in
any subsequent [CBA] . . . .” J.A. at 326 (art. X, § 4(a))
(emphasis added).
2. The Medical Plan
The Medical Plan gave employees medical benefits and life
insurance both during employment and in the event of a
layoff. Following termination of employment, an employee
would continue to receive medical benefits “for a period of 90
days beginning with the first day of layoff.” J.A. at 217 (art.
IV, § K.1(a)). An employee would also be covered for an
additional time period beyond the first ninety days, which
varied as a function of the number of SUBs an employee
would expect to receive given an employee’s available credit
units on the last day worked prior to the layoff. For example,
if an employee were entitled to thirty-three weeks of SUBs,
as determined by the employee’s seniority and the SUB
Plan’s fund position, the employee would receive ninety days
plus five months of full medical coverage. See J.A. at 218
(art. IV, § K.1(b), (c)). If the SUB fund position dropped
below 4% at the time of layoff, the employee would not be
entitled to any SUB benefits, which consequently would limit
the employee’s post-layoff medical coverage to ninety days.
Furthermore, if the SUB Plan were terminated, a laid-off
employee would only be entitled to ninety days of medical
care following the date of termination.

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 7
4The bankruptcy petition was filed in the Bankruptcy Court for the
District of Delaware, but the case was transferred to the Bankruptcy Court
for the Western District of Virginia.
B. RBX’s Bankruptcy Proceedings
RBX entered bankruptcy proceedings in December 2000
after one of its creditors filed an involuntary Chapter 11
bankruptcy petition against it.4 On June 29, 2001, RBX filed
a motion seeking authority to close the Barberton plant and to
transfer all operations to another RBX-owned plant in
Tallapoosa, Georgia in the hopes that consolidating RBX’s
mixing operations into one location would maximize RBX’s
profits from that sector. As required by the bankruptcy court,
RBX sent a letter dated June 29, 2001, to the USWA and
Rose Jones (“Jones”), who was the USWA representative
serving Local 77L, explaining that RBX would be closing the
Barberton facility subject to the approval of the bankruptcy
court. It emphasized that “the Midwest operation has been
losing money for two years and, at current sales levels, our
employees could work at minimum wages and no benefits
and the Midwest operation would still fail to reach
profitability levels competitive with our other locations.” J.A.
at 331 (RBX Letter 06/29/01). On July 12, 2001, the
bankruptcy court granted RBX’s motion to discontinue
operations at Barberton.
C. The Closing of the Barberton Plant
After learning of RBX’s intentions, Local 77L met with
representatives of the government of the City of Barberton in
early August to explore ways of forestalling the plant’s
closure. This meeting was not fruitful because no one from
RBX attended the meeting. Quickly recognizing that the
plant closure was a fait accompli, the parties entered into
“effects” negotiations.
8 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
1. Negotiations Between RBX and the Unions
a. The First Proposal
On August 14, 2001, Jones, acting as the USWA
representative, and several Local 77L officers met with
RBX’s attorneys, led by William Twomey (“Twomey”) in
what became a contentious meeting. Twomey commenced
the meeting by claiming that no severance payments would be
available because the SUB fund position was below 4% on
account of health care benefits paid to laid-off employees in
recent years. Several Barberton employees expressed anger
regarding the apparent lack of severance pay, accusing RBX
of having negotiated the SUB Plan in bad faith. J.A. at 916
(Minutes, 08/14/01). The union representatives sought to
persuade RBX not to close the plant, suggesting that the City
of Barberton might be able to provide assistance, but Twomey
made it clear that RBX had no choice but to close the plant.
Failing to reach any solution on August 14, the parties
reconvened the following day. RBX provided Local 77L with
an official Worker Adjustment and Retraining Notification
Act (“WARN”) notice, as is required by federal statute. See
29 U.S.C. § 2102 (a). The WARN letter, dated August 14,
2001, clarified that “all employees in the collective bargaining
unit at Midwest will be permanently laid off sometime during
the period between October 15th, 2001 and 14 days
thereafter.” J.A. at 50 (WARN Letter). The union
representatives complained to no avail that the notice was
late. The parties then turned their attention to the issue of
severance pay. RBX offered one of two alternatives to the
Barberton employees: 1) each employee would receive a
lump-sum payment equal to one week of severance pay for
each year of service, plus a $1,000 cash bonus, but no medical
insurance beyond the first ninety days; or 2) each employee
would receive one week of severance pay for every year of
service paid on a weekly basis, plus company-paid health
insurance for the same period of time. The Local 77L

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 9
representatives took the offer back to the union membership,
which rejected the proposal on August 19.
b. The Second Proposal
The parties reconvened on October 8, 2001. Twomey
proposed a new offer: each employee would receive one
week’s severance pay for each year of service, plus RBX
would pay its share of each employee’s health premium,
which would be applied to the employee’s COBRA premium.
The membership rejected this proposal on October 12,
demanding increased severance pay and longer lasting
medical benefits.
c. The Third Proposal
A third meeting was held on November 9, 2001. RBX
offered a sharply scaled-back proposal. RBX would pay a
lump-sum severance payment of one day’s pay for each year
of service, plus RBX would pay for health benefits through
November 30, 2002 (by applying the premium RBX would
have paid towards an employee’s COBRA payments).
However, the employees would have to pay a $250 monthly
co-payment from June 1 to November 30. The membership
eventually turned down this last proposal on December 30,
2001.
2. The Relationship Between Local 77L and the USWA
As predicted in the WARN letter, RBX closed the
Barberton facility and fired nearly all of its employees on
October 15, 2001. Pursuant to Article IX of the USWA
Constitution, the USWA placed Local 77L in
Administratorship on November 29, 2001, suspending the
Local 77L officers because the plant had closed and naming
Rose Jones as the Administrator of Local 77L. Owing to the
large number of unresolved disputes between the employees
and RBX, the USWA filed multiple grievances on behalf of
the Barberton employees. Several of these grievances were
10 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
filed by Jones in response to a letter sent by RBX, which
informed the Barberton employees that their health insurance
ended on January 13, 2002, ninety days after the closing of
the plant. Some Local 77L members objected to the manner
in which Jones handled the filing of grievances and the effects
negotiations. In January, a Local 77L member, Douglas
Sauerbrei, requested that Jones be removed as administrator.
However, during a February 13, 2002, hearing held by the
USWA to determine if the Administratorship was properly
established, there was allegedly no objection to the
establishment of the Administratorship or to Jones’s abilities
in that role.
D. The Lawsuit and the Settlement
1. The Initial Complaint
The Plaintiffs filed their complaint on March 5, 2002,
setting forth two claims for relief. In the first claim, the
Plaintiffs alleged that RBX breached the 1997 CBA and that
the two Unions breached their duties of fair representation in
violation of § 301 of the LMRA. In the second claim, the
Plaintiffs alleged that RBX “neglected and refused to pay,”
J.A. at 35-36 (Pl. Compl.), the benefits provided in the three
plans, which entitled the Plaintiffs to receive the benefits and
punitive damages pursuant to ERISA.
2. The Settlement
In March 2002, the USWA met again with RBX officials.
Twomey made clear that RBX was lowering its offer and that
he did not believe the Plaintiffs’ lawsuit would succeed.
RBX appeared to have the upper hand in these negotiations,
mainly as it believed it did not have any obligation to provide
health insurance coverage beyond ninety days because the
SUB fund position fell below 4% in early 2001. RBX made
no contributions to the SUB Plan trust fund in 2001 “because
the required contributions were reduced, under the terms of
the SUB Plan, by the cost of providing medical insurance to

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 11
employees on layoff.” J.A. at 481 (McMillan Aff.). The
Unions and the Plaintiffs countered that even if the fund
position dipped below 4% at some point in October 2001, the
fund position was over 4% in September 2001 and that was
the position that should have been used to calculate the
benefits.
Twomey drafted a settlement proposal for Jones to review,
and the USWA ultimately agreed to its terms. The Settlement
was signed and completed on April 5, 2002, although the
membership of Local 77L never voted on the matter. The
Settlement bound RBX to pay all Barberton employees:
1) nine days of pay, equal to the number of days that the plant
closing notice was allegedly late; and 2) ninety days of
RBX’s share of health insurance premiums, plus payment of
the same amount toward COBRA premiums for a number of
additional weeks equal to the number of years worked. J.A.
at 101. Additionally, the Settlement resolved many of the
outstanding employee grievances pursued by the USWA.
The Settlement superseded the 1997 CBA and all the Plans,
except for the Pension Plan. J.A. at 99 (“This Agreement
shall be controlling and superior to any inconsistent
provisions of the currently applicable [CBA] between the
Parties and to any other document or documents . . . .”); J.A.
at 100 (“Any and all other severance provisions and/or other
benefits . . . including but not limited to the [SUB] Plan, [the
Medical Plan] and any other plans . . . hereafter shall be null
and void in their entirety.”). The Settlement contained a
provision regarding the SUB Plan, which stated that RBX met
its SUB Plan funding obligations, that there were insufficient
funds to pay a benefit, and that the fund assets would be used
to administer the SUB Plan with the remainder to be
distributed to the Barberton employees. Finally, the
Settlement purported to resolve all lingering issues,
providing: “[T]his Agreement provides a full remedy for the
effects of the Company’s decision and . . . no further
negotiation of the decision to close and/or the effects of that
decision shall be required,” J.A. at 100, and “This Agreement
12 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
completely and finally resolves all disputes, grievances and
disagreements between the Parties[,] and the Company has no
continuing obligations under the [CBA].” J.A. at 103.
3. The Continuing Legal Proceedings
The Plaintiffs filed a motion for a temporary restraining
order and a preliminary injunction on March 26, 2002, to
prevent RBX and the Unions from completing the effects
negotiations that eventually produced the Settlement. The
district judge denied the motion for a temporary restraining
order as moot on April 16, 2002, because the Settlement had
already been signed. On May 2, 2002, the district court heard
arguments regarding the Plaintiffs’ renewed motion for a
preliminary injunction. The district judge denied the motion
for a preliminary injunction, ruling that the Plaintiffs failed to
demonstrate a strong likelihood of success on the merits.
The Plaintiffs then sought to amend their complaint on
July 11, 2002, alleging a claim under the LMRDA, 29 U.S.C.
§ 411, that the Defendants deprived them of the “right to sue”
promised by the LMRDA. RBX and the Unions opposed this
amendment because it was filed only three weeks before the
close of discovery and because, they asserted, it would not
survive a Rule 12(b)(6) motion to dismiss. The district judge
agreed with the Defendants and denied the motion to amend
on futility grounds. The Plaintiffs moved for reconsideration
of this denial, arguing that the Settlement had divested the
district court of subject matter jurisdiction, and thus the
Unions, by allegedly acting in concert with RBX, effectively
destroyed the Plaintiffs’ lawsuit, all of which violated the
LMRDA. The district court declined to reconsider its
decision.
Both defendants moved for summary judgment in early
August. The district court granted both motions on
October 17, 2002. The district court did not rule against the
Plaintiffs based upon a jurisdictional defect. Instead, it held
that the Plaintiffs could not succeed on their § 301 claim

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 13
because: 1) the Union had the authority to negotiate and enter
into the settlement agreement; 2) the Union did not breach its
duty of fair representation in representing the Plaintiffs; and
3) RBX did not breach the 1997 CBA. The district court
granted the Defendants’ motions for summary judgment and
dismissed the case. Plaintiffs timely appealed, and we have
jurisdiction over the final order of the district court pursuant
to 28 U.S.C. § 1291.
II. ANALYSIS
A. Standards of Review
Normally, we review de novo a grant of summary
judgment. Flint v. Ky. Dep’t of Corr., 270 F.3d 340, 346 (6th
Cir. 2001). However, here we must first determine whether
the district court properly had jurisdiction to issue a summary
judgment. We review de novo questions of subject matter
jurisdiction. Caudill v. N. Am. Media Corp., 200 F.3d 914,
916 (6th Cir. 2000). Additionally, the denial of the Plaintiffs’
motion to amend is also reviewed de novo. “Denial of leave
to file an amended complaint is usually reviewed under an
abuse of discretion standard.” LRL Props.v. Portage Metro
Hous. Auth., 55 F.3d 1097, 1104 (6th Cir. 1995). “When,
however, the district court denies the motion to amend on
grounds that the amendment would be futile, we review
denial of the motion de novo.” Inge v. Rock Fin. Corp., 281
F.3d 613, 625 (6th Cir. 2002). The district court ruled on
such “futility” grounds, and therefore we review de novo the
denial of leave to amend.
B. The District Court’s Jurisdiction over the § 301 Claim
We are presented with a counterintuitive appeal in which
the Plaintiffs argue that the district court did not have
jurisdiction over their own § 301 claim. Accordingly, the
Plaintiffs ask us to vacate the judgment of the district court
and to dismiss the action without prejudice. RBX, and to a
more limited extent the Unions, contend that the district court
14 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
had jurisdiction, and thus its opinion is valid. Therefore, we
are faced with the slightly strange situation in which the
Plaintiffs seek to undermine the jurisdictional basis for their
own claim, but their opponents, in order to maintain an
advantageous judgment, suggest the opposite. We hold that
the district court erred in reaching the merits of the § 301
claim: the Settlement superseded the 1997 CBA, making a
§ 301 claim impossible and consequently precluding the
district court from asserting jurisdiction.
1. The Plaintiffs’ § 301 “Hybrid” Claim
Section 301(a) of the LMRA provides the jurisdictional
basis for the Plaintiffs’ breach of contract/breach of duty of
fair representation claims, which are deemed “hybrid” § 301
claims:
Suits for violation of contracts between an employer and
a labor organization representing employees in an
industry affecting commerce as defined in this chapter, or
between any such labor organizations, may be brought in
any district court of the United States having jurisdiction
of the parties, without respect to the amount in
controversy or without regard to the citizenship of the
parties.
29 U.S.C. § 185(a). The Plaintiffs’ claim actually comprised
two causes of action that are “inextricably interdependent,”
DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 164-65
(1983) (quotation omitted), such that “[t]o prevail against
either the company or the Union, [Plaintiffs] must not only
show that [the company acted] contrary to the contract but
must also carry the burden of demonstrating breach of duty by
the Union.” Hines v. Anchor Motor Freight, Inc., 424 U.S.
554, 570-71 (1976). “[I]f the first claim anchored in the
employer’s alleged breach of the [CBA] fails, then the breach
of duty of fair representation claim against the union must
necessarily fail with it.” White v. Anchor Motor Freight, Inc.,
899 F.2d 555, 559 (6th Cir. 1990).

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 15
Jurisdiction in a § 301 claim is premised upon the existence
of a contract, which an employer subsequently breaches.
Section 301 opens the federal courthouse only to “[s]uits for
violation of contracts.” 29 U.S.C. § 185(a). “Where there is
no contract, the courts have no jurisdiction.” 1 Patrick Hardin
& John E. Higgins, Jr., The Developing Labor Law 1321 (4th
ed. 2001); see also 5 N. Peter Lareau, National Labor
Relations Act: Law & Practice § 41.02[2][a], at 41-7 (2d ed.
2003) (“Jurisdiction under Section 301 is premised on the
existence of a viable contract (usually a [CBA]); courts do not
have Section 301 jurisdiction over expired [CBAs].”);
Johnson v. Pullman, Inc., 845 F.2d 911, 914 (11th Cir. 1988)
(“A federal court has jurisdiction over a suit for a violation of
a collective bargaining agreement under section 301 only
while the agreement is in force.”).
Initially, the Plaintiffs pleaded that RBX breached the 1997
CBA by failing to pay SUBs, by failing to fund the SUB Plan,
and by terminating the employees’ health benefits. Then, the
Settlement superseded the 1997 CBA, rendering the SUB
Plan and the Medical Plan null and void. The only contract
in existence after April 2002 was the Settlement. The
Plaintiffs do not allege that RBX breached the Settlement, and
to the extent they argue that the Settlement was invalid,
“[d]istrict courts do not . . . possess subject matter jurisdiction
under Section 301(a) in cases concerning the validity of a
contract.” Heussner v. Nat’l Gypsum Co., 887 F.2d 672, 676
(6th Cir. 1989); see also Textron Lycoming Reciprocating
Engine Div., Avco Corp. v. UAW, 523 U.S. 653, 657 (1998)
(“‘Suits for violation of contracts’ under § 301(a) are not suits
that claim a contract is invalid, but suits that claim a contract
has been violated.”). Thus, the Plaintiffs are unable to
demonstrate that a contract existed, which RBX could have
breached.
The absence of a contract and the consequent inability to
prove a breach of that contract condemn jurisdictionally the
entire hybrid § 301 claim. In Adcox v. Teledyne, Inc., 21 F.3d
1381 (6th Cir. 1994), a group of former employees filed a
16 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
5There is some ambiguity over whether the expiration or supersession
of a labor contract that is the subject of a § 301 claim is better viewed as
raising a jurisdictional prob lem or, instead, a failure-to-state-a-claim
problem. On the one hand, federal courts have limited jurisdiction in the
area of federal labor law because the National Labor Relations Board
“was Congress’ chosen instrument for effecting national lab or policy.”
Storey v. Local 327, Int’l Bh’d of Team sters, 759 F.2d 51 7, 522 (6th Cir.
1985). Generally, the NLRB has jurisdiction over labor disputes. “When
§ 301 claim alleging that Teledyne breached a 1988 CBA by
refusing to pay certain benefits after closing down the facility
at which the employees worked. As part of the shutdown, the
workers’ union and Teledyne reached a Plant Closing
Agreement that settled the disputes over the benefits and that
expressly superseded the 1988 CBA. On appeal, we affirmed
the district court’s dismissal of the § 301 claim for lack of
jurisdiction, ruling that there could be no breach of contract
claim when the Plant Closing Agreement abrogated the 1988
CBA that was allegedly violated. Id. at 1385-86. We held
that if there was no breach-of-contract claim, there could be
no § 301 duty-of-fair-representation claim against the union
because a plaintiff in a § 301 claim must show both a breach
of a CBA and a breach of the duty of fair representation. Id.
at 1386-87. In Heussner, we confronted a similar case in
which former employees alleged a breach of a 1984 CBA that
had been superseded. We ruled that we only “possess[ed]
subject matter jurisdiction in cases involving an alleged
violation of an existing [CBA].” Heussner, 887 F.2d at 676
(emphasis added). Because the 1984 CBA had been
abrogated, we affirmed the district court’s dismissal for lack
of subject matter jurisdiction. Id; see also Storey v. Local
327, Int’l Bh’d of Teamsters, 759 F.2d 517, 523 (6th Cir.
1985) (“If the plaintiffs had relied only on section 301 as a
jurisdictional basis for this action, the absence of a collective
bargaining agreement at the time of the alleged misconduct of
the defendants would have been significant.”). There is
virtually no difference between the facts of Adcox and
Heussner and this case. Thus, the Settlement negated our
jurisdiction over the Plaintiffs’ § 301 action.5

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 17
an activity is arguably subject to § 7 or § 8 of the [NLRA], the States as
well as the federal courts must defer to the exclusive competence of the
National Labor Relations Board.” San Diego Bldg. Trades Council v.
Garmon, 359 U.S. 236, 245 (1959). However, § 301 carved out a limited
exception to the NLRB’s exclusive jurisdiction: “Section 301 of the
[LMRA] specifically created jurisdiction in the district courts to hear suits
for violation of [CB As] and contracts b etween labo r organizations.”
Storey, 759 F.2d at 522. W hen there is no existing labor contract, the
violation of which is the kernel of a § 301 suit, the district courts may not
have jurisdiction, because any allegations o f unfair labor prac tices should
be litigated before the NLRB.
On the other hand, the expiration or supersession of a contract can be
seen as a non-jurisdictional issue. The lack of a labor contract may
simply d emo nstrate that a plaintiff has failed to state a claim upon which
relief can be granted, but not deprive a federal court of jurisdiction. The
Supreme Court, in a case that postdates our precedents in Adcox v.
Teledyne, Inc., 21 F.3d 1381 (6th Cir. 1994), and Heussner v. National
Gypsum Co., 887 F.2d 672, 676 (6th Cir. 1989), stated:
[§ 301] simply erects a gateway through which parties may pass
into federal court; once they have entered, it does not restrict the
legal landscape they may traverse. Thus if, in the course of
deciding whether a plaintiff is entitled to relief for the
defendant’s alleged violation of a contract, the defendant
interposes the affirmative defense that the contract was invalid,
the court may, consistent with § 301(a), adjudicate that defense.
Textron Lycoming Reciprocating Engine Div., Avco Corp. v. UAW, 523
U.S. 653 , 657 -58 (1 998 ). This language suggests that a federal court has
jurisdiction to rule that a labor contract is invalid when the legality of the
contract is raised as an affirmative defense to a plaintiff’s claims that the
contract has been violated. One reading of this dicta is that a federal court
may possess jurisdiction over a plaintiff’s § 301 claim based on a
violation of a CBA, but the defendant may raise the affirmative defense
of the invalidity (here expiration or supersession) of the CBA; in such a
case the fede ral court could dism iss the claim because relief cannot be
granted for the vio lation of a contract that no longer exists. Another
reading of this quotation is that federal courts only possess jurisdiction to
rule that a contract is invalid because of some defect, e.g., lack of
consideration or anticipatory brea ch, but that federal courts do not have
jurisdiction when there is no dispute that the contract in question does not
exist.
Comp aring (1) our precedents in Adcox and Heussner and (2) the
general principle that federal courts have limited jurisdiction in this area,
with a lone ambiguous statemen t by the Supreme Court, we believe that
our prior rulings that a federal court does not have jurisdictio n to hear a
18 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
§ 301 claim premised upon an expired or sup ersed ed co ntract are still
binding on us.
2. The Impact of the Jurisdictional Divestment
The parties disagree over what should be the next step once
we rule that the district court did not have jurisdiction over
the § 301 claim. The Plaintiffs argue that the district court
should have dismissed their § 301 claim without prejudice,
but should have retained jurisdiction over their ERISA
claims. Pls. Br. at 31-33. Accordingly, the Plaintiffs believe
that the district court’s opinion, which holds that summary
judgment was proper because there were no genuine issues of
material fact regarding the USWA’s alleged breach of its duty
of fair representation, should be disregarded. For their part,
RBX and the USWA suggest that the district court properly
granted summary judgment. They ask the panel to affirm the
district court’s opinion as “a straightforward application of
binding precedent.” Unions Br. at 19; see also RBX Br. at
16-20.
Generally, when a court lacks jurisdiction over a particular
claim for relief, that court cannot proceed. “Whenever it
appears by suggestion of the parties or otherwise that the
court lacks jurisdiction of the subject matter, the court shall
dismiss the action.” Fed. R. Civ. P. 12(h)(3); see also Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998)
(“Without jurisdiction the court cannot proceed at all in any
cause. Jurisdiction is power to declare the law, and when it
ceases to exist, the only function remaining to the court is that
of announcing the fact and dismissing the cause.”) (quotation
omitted). No formal motion is needed to raise the issue, and
an objection to subject matter jurisdiction can be raised at any
time at either the trial or appellate level. 5A Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure
§ 1393, at 773-75 (2d ed. 1990).

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Dismissal is undoubtedly the appropriate action, but the
remaining question is whether prejudice should attach. The
Supreme Court recognized that “[a]t common law dismissal
on a ground not going to the merits was not ordinarily a bar
to a subsequent action on the same claim.” Costello v. United
States, 365 U.S. 265, 285 (1961). The Supreme Court has
declined to alter this common-law rule, writing, “If the first
suit was dismissed for . . . want of jurisdiction . . . the
judgment rendered will prove no bar to another suit.” Id. at
286; see also Mitan v. Int’l Fid. Ins. Co., No. 00-1554, 2001
WL 1216978, at *5 (6th Cir. Oct. 3, 2001) (“Dismissals of
actions that do not reach the merits of a claim, such as
dismissals for lack of jurisdiction, ordinarily are without
prejudice.”). In Heussner, a case that like Adcox is directly
on point, we affirmed the district court’s dismissal without
prejudice when the district court lacked subject matter
jurisdiction pursuant to § 301. Heussner, 887 F.2d at 675.
We therefore vacate the district court’s judgment because the
court was without jurisdiction to consider whether the Unions
breached their duty of fair representation. The district court
should have dismissed the § 301 claim without prejudice and
should have refrained from granting summary judgment on
the § 301 issue because it did not have jurisdiction to do so.
We do not reach the merits of the duty-of-fair representation
component of the § 301 claim because of this jurisdictional
limitation.
C. The District Court’s Jurisdiction over Plaintiffs’
ERISA Claims
The parties further disagree on whether the Settlement also
divests the district court of jurisdiction over the Plaintiffs’
ERISA claims. The Plaintiffs believe that no matter the fate
of their § 301 claim, the district court properly retained
jurisdiction over the ERISA claims and should have ruled
upon them. We disagree and hold that just as the Settlement
divested the district court of jurisdiction over the § 301 hybrid
claim, so too it eliminated the district court’s ability to hear
the ERISA claims.
20 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
6The Plaintiffs’ de sired re med y of compe nsatory and punitive
damages payable to the Plaintiffs is not available as a remedy for a
breach-of-fiduciary-duties claim. A party alleging breach of fiduciary
duties cannot seek personal remuneration. “[A] cause of action under
§ 1132(a)(2) permits recovery to inure only to the ERISA plan, not to
individual beneficiaries.” Adcox v. Teledyne, Inc., 21 F.3d 1381, 1390
(6th Cir. 19 94) (emp hasis ad ded ). Thus, the P laintiffs’ breach-of-
fiduciary-duties claim would not survive a mo tion to dismiss.
Furthermore, a company does not breach its fiduciary duties under ERISA
when it terminates a non-vested welfare benefit plan. Fiduciary duties do
not apply to the termination of a welfare bene fit plan, see Gregg v.
Transp. Workers of Am. Int’l, 343 F.3d 833, 844 (6th Cir. 200 3), because
the company does not act in a fiduciary capacity in amending or
terminating a non-vested plan. Hunter v. Caliber Sys., Inc., 220 F.3d 702,
718 (6th Cir. 2000) (“W e have reco gnized that employers who are also
1. The Plaintiffs’ ERISA Claims
The Plaintiffs brought their action against the Plans and
RBX as the administrator of the Plans, pursuant to several
different ERISA provisions. First, the Plaintiffs claimed that
RBX violated 29 U.S.C. § 1109(a) by breaching their
fiduciary duties as described by 29 U.S.C. § 1104(a). See
29 U.S.C. § 1132(a)(2) (“A civil action may be brought . . .
by a participant, beneficiary or fiduciary for appropriate relief
under section 1109 of this title.”); 29 U.S.C. § 1109(a) (“Any
person who is a fiduciary with respect to a plan who breaches
any of the responsibilities, obligations, or duties imposed
upon fiduciaries by this subchapter shall be personally liable
to make good to such plan any losses to the plan resulting
from each such breach.”) (emphasis added); 29 U.S.C.
§ 1104(a)(1)(B) (“[A] fiduciary shall discharge his duties with
respect to a plan solely in the interest of the participants and
beneficiaries . . . with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with
like aims.”). The main relief sought by the Plaintiffs for the
breach of fiduciary duties was a monetary settlement that
inured to them.6 Second, the Plaintiffs sought “to recover

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 21
plan sponsors wear two hats: one as a fiduciary in administering or
managing the plan for the benefit of participants and the other as
employer in performing settlor functions such as establishing, funding,
amending, and terminating the trust. The fiduciary obligations imposed
by ERISA are implicated only where an employer acts in its fiduciary
capacity.” (citations omitted)).
7The district court did not analyze the Plaintiffs’ ERISA claims. It
instead focused solely on whether the USW A had the authority to
nego tiate and enter into the S ettlement and whether US W A breached its
duty of fair representation in doing so. Nonetheless, by granting the
Defend ants’ motions for summary judgment in their entirety, dismissing
the Plaintiffs’ claims, and terminating the action, the district court
implicitly ruled against the Plaintiffs on their ERISA claims.
benefits due to [them] under the terms of [the] plan.”
29 U.S.C. § 1132(a)(1)(B). Third, the Plaintiffs sought to
recover compensatory and punitive damages under 29 U.S.C.
§ 1132(a)(3), even though § 1132(a)(3) does not specifically
mention the availability of punitive damages and provides
only for equitable relief.7
2. Jurisdiction Over the ERISA Claim
The district court did not have jurisdiction over the
Plaintiffs’ ERISA claims because the Settlement rendered
null and void the welfare benefit plans upon which the ERISA
claims were premised. Our ruling above that the district court
did not have jurisdiction to hear the § 301 claim does not
automatically deprive the district court of the ability to hear
the ERISA claims; the court’s power to entertain the ERISA
claims springs from a different statutory provision, as the
court has jurisdiction over a § 1132(a)(1)(B) action pursuant
to 29 U.S.C. § 1132(e)(1). Nonetheless, the Settlement that
divested the district court of jurisdiction over the § 301 claim
has the same effect on the ERISA claims. In Adcox, we held
that because a settlement agreement superseded a CBA,
which included a benefit plan, “the district court lacked
jurisdiction under § 1132 to entertain a challenge to the Plant
Closing Agreement’s validity.” Adcox, 21 F.3d at 1388. This
22 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
court concluded that “[b]ecause . . . the [CBA] pursuant to
which plaintiffs seek the special distribution benefits is no
longer ‘in force,’ the district court lacked subject matter
jurisdiction over the . . . claim.” Id. In Heussner, we reached
the exact same conclusion when a plaintiff argued that 29
U.S.C. § 1132 “provided an independent basis for district
court jurisdiction over claims [for pension, health, insurance,
and unemployment benefits] based on the superseded
[CBA].” Heussner, 887 F.2d at 677. We held, “Section 502
[§ 1132] does not give subject matter jurisdiction to federal
courts over actions to collect benefits due under an expired
collective bargaining contract. Because Section 502
authorizes suits for benefits to be brought in federal court only
while a collective bargaining contract remains in force, the
district court in this case did not have jurisdiction . . . .” Id.
(citations omitted) (emphasis added).
There is no doubt that the Settlement superseded the
Medical and SUB Plans. First, the Medical and SUB Plans
were fully incorporated into the CBA, and the Settlement
expressly trumped all previous CBAs and agreements.
Additionally, the Settlement explicitly stated that “[a]ny and
all other severance provisions and/or or [sic] other benefits, of
whatever nature, including but not limited to the [SUB] Plan
[and the Medical Plan] . . . shall be null and void in their
entirety.” J.A. at 100 (Settlement). Because the agreements
that created the plans are no longer in force, Heussner and
Adcox apply, and the district court did not have jurisdiction
over the ERISA claim. The Plaintiffs urge us to reconsider
these precedents, but we are bound by our prior decisions.
The Plaintiffs offer several responses, all unsuccessful
variations of the assertion that Heussner and Adcox do not
apply because the Settlement either did not or could not
supersede the Medical and SUB Plans. First, the Plaintiffs
claim that the Medical and SUB Plans were not a part of the
CBA. This is a highly dubious point, given that the 1997
CBA specifically incorporates the SUB Plan as part of the
CBA and applies the CBA’s duration period to the Medical

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 23
8Section K(1)(b) sets out the schedule for how long each emp loyee
will receive continuing coverage beyond the first ninety days after layoff.
Plan. It is also a moot point because the Settlement not only
expressly superseded the CBA but also explicitly abrogated
the Medical and SUB Plans.
Second, the Plaintiffs try to demonstrate, to no avail, that
the terms of the Medical and SUB Plans precluded their
elimination by the Settlement. Each plan, however, can by its
terms be abrogated by subsequent agreement or by the
residual effect of the termination of other benefit plans. The
Medical Plan generally states that termination of the CBA
does not affect the duration of the Medical Plan. J.A. at 224
(art. V, § 6). The Settlement, however, did not just terminate
the CBA; it specifically voided the Medical Plan as well. The
only provision of the Medical Plan to address the termination
of the Plan states, “Notwithstanding the termination of the
Plan in accordance with its terms, the benefit programs
provided for therein shall be continued for a period of 90 days
following such termination.” J.A. at 224 (art. V, § 7). The
Settlement provided for the ninety-day coverage required in
the event of the Medical Plan’s termination. J.A. at 101
(Settlement, § 9.b).
Additionally, Article four, section K(3) of the Medical
Plan, which is the operative provision dealing with continued
medical benefits following layoff, states, “In the event that the
[SUB] Plan shall be terminated in accordance with its terms
prior to the termination of this Plan, Section K(1)(b) shall
thereupon cease to have any force or effect.” J.A. at 219
(art. IV, § (K)(3)).8 The fate of the continuing-coverage
provisions of the Medical Plan is tied with that of the SUB
Plan. The interdependence of the Plans is logical given that
the length of the continuing coverage depended on the
number of weeks of SUBs to which an employee was entitled.
If the SUB Plan no longer existed or the funding position
24 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
dropped below 4%, no continuing medical coverage beyond
the ninety days would be afforded to the employees.
Similarly, the SUB Plan was terminable. The SUB Plan
provided, “So long as the [CBA] of which this Plan is a part
shall remain in effect, the Plan shall not be . . . terminated.”
J.A. at 326 (art. X, § 4(a)) (emphasis added). “Upon the
termination of the [CBA], the Company shall have the right
to continue the Plan in effect and to . . . terminate the Plan
. . . .” J.A. at 326 (art. X, § 4(a)) (emphasis added). The
Settlement superseded the 1997 CBA, and therefore the terms
of the SUB Plan did not prevent its termination.
Third, the Plaintiffs contend that the benefits conferred by
these two plans were vested and thus could not be affected by
the Settlement. The terms of the agreement, the plain
language of ERISA, and our caselaw interpreting ERISA
belie such a statement. The SUB Plan explicitly declared that
the employees did not have a vested interest in the assets of
the SUB fund or in the company contributions to the fund.
J.A. at 322 (art. IX, § 5). The Medical Plan did not explicitly
state that the health care benefits were vested. ERISA
distinguishes between welfare benefit plans and pension
plans. Compare 29 U.S.C. § 1002(1) with 29 U.S.C.
§ 1002(2)(A). Welfare benefit plans include severance
benefit plans, Adams v. Avondale Indus., Inc., 905 F.2d 943,
947 (6th Cir. 1990), medical, surgical, or hospital care benefit
plans, 29 U.S.C. § 1002(1)(A), and unemployment benefit
plans. Id. “Welfare benefit plans are not subject to
mandatory vesting requirements under ERISA, unlike pension
plans. Therefore, there is no statutory right to vested . . .
benefits, and the parties must agree to vest a welfare benefit
plan.” Maurer v. Joy Techs., Inc., 212 F.3d 907, 914 (6th Cir.
2000) (citation omitted). “As a matter of law under ERISA,
one of the key differences between welfare and pension plans
is that welfare plan benefits do not vest.” Gregg v. Transp.
Workers of Am. Int’l, 343 F.3d 833, 844 (6th Cir. 2003). We
have explained,

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 25
Apparently, Congress chose not to impose vesting
requirements on welfare benefit plans for fear that
placing such a burden on employers would inhibit the
establishment of such plans. In drawing the line between
employer actions subject to the fiduciary duty
requirement and those not, we must avoid any rule that
would have the effect of undermining Congress’
considered decision that welfare benefit plans not be
subject to a vesting requirement.
Adams, 905 F.2d at 947 (citation omitted). Plaintiffs are thus
simply incorrect in their protestations that their welfare
benefits were vested interests, particularly given that the
terms of the Plans either specifically disclaim vesting or are
silent on the issue.
In sum, the district court did not have jurisdiction to hear
the Plaintiffs’ ERISA claims because the Settlement
terminated the SUB and Medical Plans. Our precedents, such
as Adcox and Heussner, clearly dictate that federal courts
have no power to hear an ERISA claim regarding a welfare
benefit plan that has been superseded. On remand, the district
court should dismiss the ERISA claims.
D. The Denial of the Plaintiffs’ Motion to Amend
Finally, the Plaintiffs appeal the district court’s denial of
their motion to amend their complaint to add a claim under
§ 101 of the LMRDA, 29 U.S.C. § 411(a). Although the
district court most likely would have been justified in denying
the motion to amend because of its tardiness — the Plaintiffs
filed the motion three months after the deadline for amending
the pleadings, two months after the Settlement that allegedly
gave rise to the LMRDA claim, and only eleven days before
the Defendants’ summary judgment motions were due — the
district court declined to permit the Plaintiffs to add an
26 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
9Even though the district court did not have jurisdiction over the
Plaintiffs’ § 301 and ERISA claims, there is an independent jurisdictional
basis for the LMRDA claim such that the district court could have
properly heard the case had it permitted the Plaintiffs to amend their
com plaint. See 29 U.S.C. § 41 2 (“Any person whose rights secured by
the provisions of this subchapter have been infringed by any violation of
this subchapter may bring a civil action in a district court of the United
States for such relief (including injunctions) as may be appropriate.”).
LMRDA claim on the basis of futility. We review de novo its
decision.9
The Plaintiffs’ proposed LMRDA claim alleged that the
USWA and RBX “conspired together to violate and to limit
Plaintiffs’ rights . . . to institute and to proceed with this
action in this Court.” J.A. at 432 (Pls. Motion for Leave to
File a Second Am. Compl.). Recognizing that the Settlement
divested the district court of jurisdiction over the § 301 claim,
the Plaintiffs chiefly assert that the agreement to the
Settlement left the Plaintiffs without relief in federal court.
The Plaintiffs contended that this deprived them of the “right
to sue” ensconced in the LMRDA. Because the LMRDA
does not serve the role envisioned by the Plaintiffs and
because they did not state a claim upon which relief can be
granted, we agree with the district court’s denial of the motion
to amend on futility grounds.
“The Labor-Management Reporting and Disclosure Act of
1959 was the product of congressional concern with
widespread abuses of power by union leadership.” Finnegan
v. Leu, 456 U.S. 431, 435 (1982). It was “designed
specifically to regulate internal union affairs.” Hrometz v.
Local 550, Int’l Ass’n of Bridge Constr. & Ornamental
Ironworkers, 227 F.3d 597, 601 (6th Cir. 2000) (quotation
omitted). The LMRDA
[P]laced emphasis on the rights of union members to
freedom of expression without fear of sanctions by the
union, which in many instances could mean loss of union

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 27
membership and in turn loss of livelihood. Such
protection was necessary to further the [LMRDA]’s
primary objective of ensuring that unions would be
democratically governed and responsive to the will of
their memberships.
Finnegan, 456 U.S. at 435-36. As part of the “Bill of Rights
of Members of Labor Organizations,” § 101 of the LMRDA
in part mandates,
No labor organization shall limit the right of any member
thereof to institute an action in any court, or in a
proceeding before any administrative agency,
irrespective of whether or not the labor organization or
its officers are named as defendants or respondents in
such action or proceeding, or the right of any member of
a labor organization to appear as a witness in any
judicial, administrative, or legislative proceeding, or to
petition any legislature or to communicate with any
legislator: Provided, That any such member may be
required to exhaust reasonable hearing procedures (but
not to exceed a four-month lapse of time) within such
organization, before instituting legal or administrative
proceedings against such organizations or any officer
thereof: And provided further, That no interested
employer or employer association shall directly or
indirectly finance, encourage, or participate in, except as
a party, any such action, proceeding, appearance, or
petition.
29 U.S.C. § 411(a)(4). To establish a prima facie violation of
this right to institute a legal action, a plaintiff must
demonstrate that he or she engaged in the protected conduct,
the union retaliated against the plaintiff, and the plaintiff
suffered an injury as a result of the union’s action. Thompson
v. Office & Prof’l Employees Int’l Union, 74 F.3d 1492, 1506
(6th Cir. 1996).
28 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
There are no cases that support the Plaintiffs’ belief that the
actions of RBX and the USWA give rise to a valid LMRDA
claim. The plain language of the statute also demonstrates
that the Plaintiffs’ claim, if added, would not survive a motion
to dismiss. First, RBX is not liable under § 411(a)(4). The
statute only prohibits “labor organizations” from inhibiting a
plaintiff’s right to file suit against that organization. It does
not authorize a cause of action against employers.
Because they take it out of context, Plaintiffs
misunderstand the meaning of the statute’s second proviso,
which states that a union cannot infringe a member’s right to
sue, provided that “no interested employer or employer
association shall directly or indirectly finance, encourage, or
participate in, except as a party, any such action, proceeding,
appearance, or petition.” See Pls. Br. at 54 (citing 29 U.S.C.
§ 411(a)(4)). This provision limits the union member’s
complete right to initiate a legal proceeding when the
member’s suit is funded by the employer. The exception
exists to prevent employers from interfering in the relations
between union members and the unions, but it does not create
an independent basis for employer liability under the
LMRDA. Funding by an interested employer of a union
member’s suit does not make the employer liable; rather, such
funding only limits the union member’s absolute freedom to
initiate legal proceedings. The exception, which if applicable
would hurt, rather than help the Plaintiffs’ alleged LMRDA
claim, is not relevant here in any event given that RBX and
the Plaintiffs are adversaries, not allies.
Second, the claim must fail as asserted against the USWA,
because the union has not limited the Plaintiffs’ ability “to
institute” its action. The Plaintiffs successfully instituted
their action against both RBX and the USWA in federal court
and proceeded to litigate the case for over a year. The
Plaintiffs have not even alleged, let alone offered any
evidence, that the USWA retaliated against them for engaging
in this lawsuit. It is true that the Settlement has impeded the
Plaintiffs’ ability to win their lawsuit in federal court by

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No. 02-4327 Bauer et al. v. RBX Industries, Inc. et al. 29
divesting the district court of subject matter jurisdiction and
by purporting to settle all claims between the Barberton
employees and RBX. However, the LMRDA does not create
a cause of action against unions for actions that diminish the
chances for a member to succeed in a lawsuit against a union.
To the extent that the Plaintiffs could argue that the USWA
retaliated against Plaintiffs’ lawsuit by negotiating and
signing the Settlement, this contention would be misguided;
if successful, such an assertion would significantly limit the
ability of unions to represent the entire bargaining unit. Any
suggested causal connection between the Settlement and the
lawsuit is tenuous. The Plaintiffs comprised less than 20% of
the total membership of Local 77L, but the USWA was
charged with obtaining some modicum of benefits for all the
Barberton employees. There is no evidence that the USWA
signed the Settlement to impact the court’s jurisdiction over
the action, even though the Settlement had that incidental
effect. Signing a settlement that has such a secondary effect
does not constitute the type of behavior that § 411(a)(4) is
designed to prohibit.
Additionally, subjecting unions to liability under the
LMRDA for actions such as the USWA’s would place into
direct conflict the LMRDA and the duty of labor
organizations to represent their members under the National
Labor Relations Act. A union is obligated to represent all the
members of a bargaining unit in negotiations as the exclusive
bargaining agent. 29 U.S.C. § 159(a); see also Vaca v. Sipes,
386 U.S. 171, 177 (1967) (“It is now well established that, as
the exclusive bargaining representative . . . the Union had a
statutory duty fairly to represent all . . . employees.”). If a
union were forced to refrain from negotiating plant-closing
settlements, which are applauded by some union members
and derided by others, whenever a faction of the union
membership filed suit over an alleged breach of a CBA, the
union could harm the non-litigious members by refusing to
negotiate until the conclusion of the lawsuit. The union could
also be liable to the nonparty union members for its failure to
30 Bauer et al. v. RBX Industries, Inc. et al. No. 02-4327
negotiate. To hold that the USWA’s actions here violated the
LMRDA would establish a troublesome precedent, because
it would prevent unions from reaching settlements when such
settlements potentially could have a secondary effect on
pending litigation filed by a small percentage of the
bargaining unit’s members.
III. CONCLUSION
In sum, the Settlement divested the district court of
jurisdiction over both the § 301 and ERISA claims. The
district court erred when it proceeded to reach the merits of
the case. We VACATE the district court’s grant of summary
judgment and REMAND with instructions to dismiss the
Plaintiffs’ action without prejudice. The district court’s
denial of the motion to amend the complaint to add an
LMRDA claim is AFFIRMED, because the Plaintiffs did not
state a claim that would survive a motion to dismiss.

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