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Union Member Cannot Bring Legal Malpractice Claim Against Union Or Its Lawyer

Zander v. Carlson and the Illinois Fraternal Order of Police, 2019 IL App (1st) 181868, is a legal malpractice opinion which holds that a union member who retains a union appointed attorney to represent him in challenging an employment action, cannot file a malpractice claim because filing such a claim would circumvent the collective bargaining agreement.

The facts and procedural history are set forth as follows:

¶ 4 Under the Illinois Municipal Code, a police officer facing discharge is entitled to a hearing before the local Board of Fire and Police Commissioners (police board), unless a collective bargaining agreement between the municipality and the officer’s union provides for arbitration of such disputes. See 65 ILCS 5/10-2.1-17 (West 2018). The collective bargaining agreement between the Village and the FOP provides that an officer may elect to challenge his discharge either before the police board or through the agreement’s ordinary grievance-arbitration procedure. On Carlson’s advice, Zander elected to proceed via arbitration. After a two-day hearing, the arbitrator upheld the decision to terminate Zander’s employment.

¶ 5 Zander then filed a two-count complaint against Carlson and the FOP. Count I alleged that Carlson owed Zander a duty of care arising from their attorney-client relationship and that Carlson breached that duty by negligently advising Zander to waive his right to a hearing before the police board and by inadequately representing him at the arbitration hearing. Count II alleged that the FOP assumed its own duty of care to Zander by providing him with legal representation and that it breached that duty by assigning him an inexperienced and incompetent lawyer. Alternatively, count II alleged that the FOP was vicariously liable for Carlson’s negligence.

¶ 6 Carlson and the FOP moved to dismiss the complaint. Citing Atkinson v. Sinclair Refining Co., 370 U.S. 238 (1962), they argued that Zander’s claim against Carlson should be dismissed pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2018)) because a union agent is immune from personal liability for actions taken on the union’s behalf in the collective bargaining process. And they argued that Zander’s claim against the FOP should be dismissed under section 2-619(a)(1) of the Code (735 ILCS 5/2-619(a)(1) (West 2018)) because the Illinois Labor Relations Board (Board) has exclusive jurisdiction over claims that a union violated its duty to fairly represent its members.

¶ 7 In response, Zander argued that Carlson was not entitled to immunity under Atkinson because the arbitration proceeding challenging his termination was unrelated to the collective bargaining process and because Carlson acted on his (rather than the union’s) behalf due to their attorney-client relationship. Zander argued, alternatively, that he should be able to sue Carlson for malpractice as a third-party beneficiary of the FOP’s attorney-client relationship with Carlson. Finally, Zander argued that his claim against the FOP did not fall within the Board’s exclusive jurisdiction because it was not based on the duty of fair representation but instead sought to hold the FOP vicariously liable for Carlson’s malpractice.

¶ 8 The circuit court dismissed the complaint, holding that Carlson was immune from suit under Atkinson and that Zander’s claim against the FOP fell within the Board’s exclusive jurisdiction. In a motion to reconsider, Zander argued that Carlson should be subject to liability to the extent of his malpractice insurance coverage. The circuit court denied the motion, finding that Zander’s new argument was forfeited. Zander then filed a timely notice of appeal.

The Appellate Court’s opinion is thoughtful and carefully analyzes that National Labor Relations Act as follows:

¶ 14 Zander appears to accept that Atkinson immunity applies under the Labor Relations Act, but he argues that such immunity should not extend to a union’s lawyers. We disagree. In Peterson v. Kennedy, 771 F.2d 1244, 1257 (9th Cir. 1985),the Ninth Circuit refused to create “an exception to the Atkinson rule * * * for union employees who happen to be attorneys.” The court recognized that “[l]abor grievances and arbitrations frequently are handled by union employees or representatives who have not received any professional legal training at all.” Id. at 1258. When a union instead hires an attorney “to act for it in the collective bargaining process”—including in an “arbitration proceeding” where “the underlying grievance belongs to a particular union member”—the union itself continues to “represent[,] and is ultimately responsible to[,] the member.” Id. In those circumstances, the court held, “the rationale behind the Atkinson rule is squarely applicable.” Id.

¶ 15 As Peterson explained, sound policy reasons support the extension of Atkinson immunity to attorneys who act on behalf of a union in matters arising under a collective bargaining agreement or that otherwise relate to the collective bargaining process. As we noted above, a union may be held liable to a member for breaching its duty of fair representation “only where it commits intentional misconduct in representing an employee.” Knox, 2018 IL 162265, ¶ 32. In a legal malpractice action, by contrast, an attorney may be held liable for merely negligent conduct. Fox v. Seiden, 2016 IL App (1st) 141984, ¶ 25. Allowing union members to file malpractice suits against union attorneys for actions taken in connection with the collective bargaining process would “anomalous[ly]” hold “certain agents or employees of the union * * * to a far higher standard of care than the union itself.” Peterson, 771 F.2d at 1259. Worse yet, because duty of fair representation claims are subject to a six-month statute of limitations (see 5 ILCS 315/11(a) (West 2008)), while legal malpractice actions are subject to a lengthier two-year statute of limitations (see 735 ILCS 5/13-214.3(b) (West 2018)), failing to extend Atkinsonimmunity to union attorneys would subject them to personal liability for actions taken on behalf of a union well after the limitations period for a claim against the union itself had expired. See Peterson, 771 F.2d at 1259 (observing that, under such a rule, “the union attorney would often be the only defendant against whom a disappointed [union member] could proceed”).

¶ 16 For these reasons, courts have consistently followed Peterson in “reject[ing] efforts to distinguish lawyers from other union agents for purposes of Atkinsonimmunity” (Arnold v. Air Midwest, Inc., 100 F.3d 857, 862 (10th Cir. 1996)) and “have uniformly concluded that Atkinson prohibits claims made by a union member against attorneys employed by or retained by the union to represent the member in a labor dispute.” Carino v. Stefan, 376 F.3d 156, 160 (3d Cir. 2004).

¶ 17 Zander argues that Atkinson and Peterson do not support the dismissal of his malpractice claim under section 2-615 because his complaint alleged a direct attorney-client relationship between him and Carlson. While we must accept the well-pleaded allegations of Zander’s complaint as true when assessing its legal sufficiency, we are not required to accept “mere conclusions of law or fact unsupported by specific factual allegations.” Anderson v. Vanden Dorpel, 172 Ill. 2d 399, 408 (1996). Zander’s complaint alleged that Carlson was an FOP employee who regularly represented police officers in labor disputes, grievances, and termination proceedings. He alleged that, by acquiescing in Carlson’s representation of him, he formed an attorney-client relationship with Carlson. But he conceded that he and Carlson did not sign a retainer agreement; that he had no input into the FOP’s decision to assign Carlson to represent him; and that he did not pay for Carlson’s services, other than indirectly through his union dues. Zander’s contention that his mere acceptance of Carlson’s representation created an attorney-client relationship is foreclosed by Peterson, which rejected the notion that “an attorney who is handling a labor grievance on behalf of a union as part of the collective bargaining process has entered into an `attorney-client’ relationship in the ordinary sense with the particular union member who is asserting the underlying grievance.” 771 F.2d at 1258.

¶ 18 Peterson recognized that “union members who have themselves retained counsel to process grievances on their behalf” are not prohibited from bringing malpractice suits against their retained attorneys, even if the attorney otherwise “serves as the union’s regular outside counsel and is employed at the union’s suggestion.” Id. at 1259. But to invoke this exception, the union member must show that the attorney “specifically agreed * * * to provide direct representation to [the union member] as an individual client” and was not merely “acting pursuant to [his] obligation to provide representation for or on behalf of the union.” Id. at 1261. Notably, Zander’s complaint did not allege any specific agreement by Carlson to directly represent Zander as an individual client. To the contrary, Zander alleged that Carlson was an FOP employee whose duties included regularly representing union members in grievance and termination proceedings and whose services were provided to Zander (and other union members) as a benefit of union membership. Even viewing the allegations in Zander’s complaint in the light most favorable to him, he failed to sufficiently allege an attorney-client relationship between him and Carlson. See Arnold, 100 F.3d at 862-83 (rejecting union member’s attempt to “recharacterize” his relationship with union attorney where the attorney was “retained by the union,” the attorney’s services were “provided to [the union member] as a benefit of [his] union membership,” and the attorney “also provided services on behalf of [the union] to * * * other [union members] threatened with termination”).

Comment: Union members who use the Union’s attorney give up certain rights, including the right to sue for legal malpractice. In return they get free or low cost representation. Whether the trade off is worth it, is up to each union member.

Ed Clinton, Jr.

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