Dakin Matthews is a proud member of Actors Equity for almost 50 years. He has worked under many of its contracts, codes, and plans including, recently, five shows on Broadway. He is also a retired full professor of English with specialties in Shakespeare, linguistics, rhetoric, and grammar. He is a member in good standing of Equity in the Western Region, but is pretty much bi-coastal these days. He was last seen on-screen opposite Tom Hanks in Steven Spielberg’s 2015 film Bridge of Spies and currently stars in the Tony-nominated new musical Waitress at the Brooks Atkinson Theatre.
In the latest installment of his “Layman Looks” series, Dakin gives a close read of Equity’s legal memorandum on why the served lawsuit should be dismissed:
Actors’ Equity has filed a legal memorandum in reply to the plaintiffs’ response to Equity’s motion for dismissal.
In other words, the plaintiffs served, the Union returned service, the plaintiffs volleyed, and the Union is now volleying back. And this is just the qualifying match to see whether there will be a final.
Again, I have no expertise here, except a good familiarity with the issues and some ability in reading complex English and analyzing arguments; and admittedly labor law in particular is a thicket for which I have no road map. But as the plaintiffs are likely excluded from addressing these issues publicly, I thought, in the interests of the affected parties having at least some idea of how the case might stand now, I would try a little analysis of the latest volley.
Equity’s response is a good, strong two-handed backhand down the line. Not quite a slam or a winner perhaps, but certainly challenging.
The essential argument is that “the facts underlying the dispute as pleaded, attached or referenced in the Complaint do not state a claim upon which relief can be granted.” In other words, the plaintiffs have still not made a case that would, according to the facts and the applicable law, justify the court’s involvement.
Accordingly, the response attempts to persuade the judge that its presentation of the facts and the applicable law is the correct one. And it does so by primarily attacking the accuracy or applicability of the plaintiffs’ arguments in the original complaint.
The summary introduction capsulizes the rest of the memorandum. And the introduction lays out defendants’ two-pronged rebuttal to the plaintiffs’ response. There are two different laws in play in the suit: contract law and labor law. The memorandum tries to dismiss almost all of plaintiffs’ complaints under contract law by alleging that the plaintiffs in fact do not dispute any of the facts in question that are governed by contract law. As a result, Equity leaves itself only a “razor-thin” opening to make a complaint based on certain aspects of labor law, which – the defendants assert – are simply not applicable in this case.
The initial and fundamental strategy for this part of the response is to insist that what is at issue is an “internal union Rule… adopted by the National Council.” And therefore, virtually all the rulings cited by the plaintiff’s complaint do not apply to such “internal union rules.” (And if indeed this were the only issue, there might be much more strength in the memorandum’s arguments, both factually and legally. But, in my opinion, the memorandum never frontally faces the fact that this is not the only issue.)
Next, the introduction offers a brief and not together accurate history lesson about how Equity came to change this “internal rule.” (After all, how “exhaustive” could the process of “seeking and receiving feedback from Equity’s Los Angeles members” have been, when the result of that process so overwhelmingly missed the mark as to be defeated by a 2 to 1 majority, unheard of in any previous Equity referendum? In addition, voter turnout in the referendum was equally unprecedented: 44.9% of eligible voters compared to 16.7% in the most recent council election.)
Equity then editorializes, rather off the point legally, about the “changing national dynamic surrounding” the issue of minimum wage, and suggests that its action must be “seen and evaluated in this context.” I really do not understand what this has to do with either the facts or the law in this case.
The next thing the summary promises to do is to dismiss virtually all claims under contractual law – except for the plaintiffs’ weakest arguments. Thus, Equity asserts that there is, in fact, no dispute about whether it fulfilled the actual terms of the contract (i.e. the Settlement Agreement). The only viable claims made by the plaintiffs are instead “meritless arguments, mostly based on Equity’s supposed lack of “good faith and fair dealing.”
Now the summary signals its line of attack. It predictably attacks first, like a good tennis player, at what it deems the opponent’s weakness, and exactly where the plaintiffs’ arguments have always seemed to me to be the least compelling. I’m referring to the plaintiffs’ complaint that the union (i.e. the National Council) should not have “acted on” the proposal the way it did, and that once it did act on the proposal, it should have remained “neutral.”
This takes a little time to unpack. The phrase “act on” comes from the Settlement Agreement, where it might reasonably mean that the National Council may not vote to adopt changes to the Plan without 45-day notice. The plaintiffs’ complaint seems to want to construe that as “take any action at all,” which has always seemed to me unlikely to convince any judge anywhere. And the response pounds very hard on that complaint. The response also pounds hard on the plaintiffs’ assertion that the union was obliged to remain neutral, when by law, a “union does not breach its DFR [duty of fair representation] where, as here, it adopts an internal membership rule.”
So, according to the memorandum, any charges that the union acted unfairly fail because there is no applicable labor law covering this precise situation.
Seems like a powerful argument until it is looked at a bit more closely.
First, because any change to the Plan, significant or minor, is subject to the procedures outlined and agreed to in the Settlement Agreement, there is no way to construe the changes that Equity made, both those it included in the advisory referendum and those it made afterwards, as merely “an internal membership rule,” subject only to the provisions of the labor law governing internal union matters. The memorandum thus asserts something which is palpably untrue: that the issue is merely an “internal union rule.” The memorandum then bases many of its arguments on that unproven and unprovable assertion. Even when Equity itself identifies the two “carve-outs” as “internal membership rules,” the union, by (a) repeatedly having referred to them as “changes to the 99-seat Plan” and (b) having included both of them in the advisory referendum, clearly and specifically acknowledged that the carve-outs were precisely the kind of “changes” subject to the exactly defined procedures of the Settlement Agreement. And thus, any argument based exclusively on labor law regarding “internal union rules” is clearly flawed because contract law is also applicable.
Another assertion made by Equity’s lawyers is that any possible labor laws which the plaintiffs might try to rely on to question the union’s duty of fair representation in “collective bargaining” cannot be used here because, the actors were specifically not employees under the Plan. Since there was no employer/employee relationship, there cannot be “collective bargaining’’ on the actors’ behalf. Yet later in the document, Equity’s lawyers cite another portion of labor law to argue that some “employers” illegally tainted the process by donating to the anti-proposal cause, when it has already argued that there was no employer/employee relationship under the old Plan. That seems a bit disingenuous to this untrained ear; and the justification that those donors might become employers under the new agreement seems tenuous, in spite of the ruling the memorandum cites from another case.
There is another piece of labor legislation that the memorandum tries to exclude from consideration, because the Section which the plaintiffs cited in their complaint was not applicable to “advisory referenda.” This may be true, but the fact also is that the fairness requirement governing this particular referendum was spelled out in the Settlement Agreement. So once again, contract law is also applicable and the question of fairness can be adjudicated beyond the limits of this section of labor law.
The memorandum thus far has been only the summary; now the real arguments begin.
The arguments themselves are thick with citations and precedents, as they should be, and I get the feeling that the defendants, with those citations and precedents, are making their points and making them well. But I am not qualified to judge that part of the argument. So I will only focus on those parts where I think I can comment – on the structure and logic of the arguments and on the presentation of the facts.
The first set of arguments deals with alleged contractual breaches by Equity. Here the Settlement Agreement – as a kind of contract – looms large. The strategy is to dismiss virtually all contractual arguments by asserting that Equity scrupulously fulfilled every obligation in the contract. Equity asserts that even that the plaintiffs agree on this point and don’t contest it. In other words, this section argues that the plaintiffs essentially stipulate that Equity has not directly breached the contract, but only indirectly at best, and by a flawed interpretation of the language of the contract and of labor law.
It’s impressively done – but, as I read it, it’s simply not accurate:
1. In its list of such supposed stipulations, Equity claims that “Plaintiffs agree” that they were provided with the proposed changes 45 days in advance of April 21, when Council “acted on” the proposal. What it fails to mention is that on April 21, Council proposed and acted on more changes without giving the 45-day notice. And the Settlement Agreement states quite specifically that that any and all changes, substantial or minor, must be reported 45 days before the Council acts “on those changes.” Not “any” changes, but “those” changes. It makes a difference.
2. Equity also claims that the Plaintiffs “do not claim that” that the three meetings held constituted “an unreasonable number of meetings.” In fact, the requirement reads that “a reasonable number of meetings… for the purpose of receiving recommendations and opinions of the Review Committee about the proposed changes.” Perhaps it is not the simple number three that plaintiffs reject, but that it was a sufficient number to do the business required by the Settlement Agreement or that at those meetings the union did not reasonably fulfill the requirement of “receiving opinions and recommendations, etc.” The real problem, however, is who shall decide what a reasonable number of appropriately held meetings might be? Since the Review Committee is evenly divided, it seems likely the Committee itself cannot confirm that, so it must be decided by an outside arbiter. Hence, the need for adjudication. Citing this section of the Settlement Agreement actually seems to help make the plaintiffs’ case for the lawsuit, since someone must decide on whether the standard of “reasonableness” was met, and neither the defendants nor the plaintiffs have the unilateral right to do that.
3. With regard to the “advisory referendum,” plaintiffs and defendants do seem to agree that the formal procedures of the contract were not breached. However, the memorandum leaves out an important phrase in the Settlement Agreement – that the referendum must be “conducted fairly.” (SA 4a(iv)). The specific procedures meant to secure fairness are not the only measure of that fairness, but only some of what a fairly run referendum “shall include.” Now, at least in my opinion, Equity has every right to campaign vigorously for its proposal. However, it also has the additional responsibility to do so honestly and fairly, not just according to labor law but also according to the demand for fairness in the Settlement Agreement. The opening to question the fairness of the referendum, which certainly includes “referendum materials” and might also reasonably include the campaign that preceded the actual vote, is therefore a bit more than “razor-thin. And as that “fairness” is not just a matter of labor law but of contractual law as well, someone must adjudicate. Hence the need for the lawsuit. Hence also the need for the plaintiffs to make a strong case that Equity did not live up to the standard of fairness. And one way to do that might be to demonstrate that the union misled its own members on what the referendum was really about, and misinformed them on matters of fact. I’m not sure they’d have to prove it was deliberate, just that it happened enough to suggest at least negligence, as the Council was specifically charged with the responsibility for ensuing fairness.
4. The next argument from the memorandum is rather subtle; it uses for its support a Superior Court ruling that “Where contract language is clear and unambiguous, it governs.” The memorandum asserts that the “Plaintiffs Cannot Create an Ambiguity Where None Exists.” And, rightly I think, they suggest the plaintiffs are trying to expand the unambiguous meaning of “act on” (in the Settlement Agreement) to include “doing anything,” where clearly “The term ‘act on’ a proposal, according to the memorandum, unambiguously refers to Council making a decision on a proposal.” I happen to agree with the memorandum here, and have always found plaintiffs’ argument on this matter weak. (But, again, this is a layman’s look and there may a hidden strength to it that I cannot perceive.)
However, “the unambiguity standard” – if I may call it that – cuts both ways. So when the defendants themselves then try to define “act on” in such a way as to include “modifying an original proposal” at the Council level, it seems to me that a “modification” is a change to the proposal. And since a change to the proposal is a proposed change to the Plan, the unambiguous language of the Settlement Agreement triggers the 45-day notification before the proposed changes can be “acted on.”
If National Council can effectively change the proposal (and thereby the Plan) in whatever way it chooses without notice, then how is the unambiguous requirement of due notice being met? If “act on” includes “change,” then the procedural safeguards unambiguously stated in the Settlement Agreement are unilaterally voided. And even if the “change” is minor, the 45-day notice to the Review Committee is still in effect, and indeed it seems to be up to the Review Committee to decide whether such a change is minor, or substantial enough to trigger the entire procedural cycle again. It’s not pretty, but that’s what it says, and pretty unambiguously. Equity has no more right to define the unambiguous meaning of “act on” any more than the plaintiffs do – but everyone, I think, knows what a “change” is. So someone must adjudicate – hence the need for a lawsuit.
In the thicket of labor law, there is much more to the Equity’s specific arguments, and the many rulings and precedents it cites to bolster their arguments. And much of it is pretty persuasive, as well as beyond my competence to judge. Some of it even seems to fault plaintiffs for simply failing to make the appropriate claims, when there might have been such appropriate claims to be made.
Overall, I would guess Equity’s rebuttal is not as strong as it seems to be and the plaintiffs’ lawyers still have a viable and strong case to make. The match is not over, I think.