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Payne v. Pullman Co.

FEBRUARY 19, 1957.




Appeal from Circuit Court of Cook county; the Hon. HARRY M. FISHER, Judge, presiding. Judgment affirmed. JUDGE SCHWARTZ DELIVERED THE OPINION OF THE COURT.

The question presented on this appeal involves the right of a sleeping car porter formerly employed by defendant (a carrier subject to the Railway Labor Act) to sue for damages for alleged wrongful termination of his contract although he has not exhausted all the remedies provided in the collective bargaining agreement of his union and in the Railway Labor Act. The trial court held against plaintiff and dismissed the suit.

Under the terms of the collective bargaining agreement between defendant and the Brotherhood of Sleeping Car Porters, the right of an employee to a fair and impartial hearing before discharge is recognized and provision is made for a hearing before the district representative of the carrier. If the decision of the district representative is not satisfactory, the employee may within twenty days appeal to the assistant to the vice-president in Chicago or to such other operating officer as may be designated. The contract then provides that: "Any further appeal in accordance with provisions of the Railway Labor Act shall be taken within thirty (30) days from date decision is rendered." The Railway Labor Act creates the National Railroad Adjustment Board for the purpose of deciding disputes between carriers and their employees. (45 U.S.C. § 153 (1952).) The Board is composed of four divisions. The third division is the one empowered to act in respect to the controversy here involved. This division is composed of ten members, five selected by the carriers and five by the national labor organizations. In case of deadlock a neutral person is to sit with the division.

Plaintiff was charged with making advances toward a woman passenger, and in accordance with the provisions heretofore recited was given a hearing before the proper official. He was ordered discharged and took an appeal to the Assistant Vice-President, who sustained the order. He then abandoned his right to a further appeal and started this suit.

The question of the right of an aggrieved railroad employee upon discharge to resort to the state courts for relief by way of damages for breach of contract has been the subject of litigation for some years, and three cases have quite definitely established the law. Moore v. Illinois Central R. Co., 312 U.S. 630, 634; Slocum v. Delaware L. & W.R. Co., 339 U.S. 239; Transcontinental and Western Air, Inc. v. Koppal, 345 U.S. 653, 654, 661. In Moore v. Illinois Central R. Co., supra, the plaintiff sued in a Mississippi state court for damages for discharge contrary to provisions of a collective bargaining agreement. The parties were subject to the Railway Labor Act. The case was transferred to the federal court. The plaintiff recovered a judgment. Upon appeal, the United States Supreme Court, while reversing for reasons not relevant here, said that the plaintiff was not required to pursue his remedy by an appeal to the Adjustment Board as a prerequisite to a suit for wrongful discharge. However, the collective bargaining agreement in that case did not provide for appeal to the Adjustment Board. In Slocum v. Delaware L. & W.R. Co., supra, the railroad filed suit for a declaratory judgment interpreting a collective bargaining agreement with respect to a jurisdictional dispute between unions. The court held that the Adjustment Board had exclusive jurisdiction. It distinguished the Moore case on the ground that the Adjustment Board was best designed to handle such jurisdictional disputes. In its opinion the court said:

"The Adjustment Board is well equipped to exercise its congressionally imposed functions. Its members understand railroad problems and speak the railroad jargon. Long and varied experiences have added to the Board's initial qualifications. Precedents established by it, while not necessarily binding, provide opportunities for a desirable degree of uniformity in the interpretation of agreements throughout the nation's railway systems."

Transcontinental and Western Air, Inc. v. Koppal, supra, is the last word on this question. In that case the plaintiff was employed in Kansas City, Missouri, by a common carrier subject to the Railway Labor Act. As in the instant case, the agreement with the union provided for a fair hearing with two appeals, similar to those in the case before us. The plaintiff was charged with abuse of a sick leave provision and after a hearing was told he would be discharged, whereupon he was permitted to resign "under protest." He took no appeal, as provided by his employment contract, but instead instituted suit in the federal court. The case was submitted to a jury which returned a verdict of $7,500. The trial court set aside the verdict and dismissed the complaint on the ground that the respondent had failed to exhaust the remedies prescribed in his employment contract. The Court of Appeals reversed the trial court, and an appeal was taken to the Supreme Court of the United States, which reversed the Court of Appeals and upheld the trial court. The Supreme Court held that the substantive law of Missouri determined the requirements of the cause of action and the interpretation of the contract (Erie R. Co. v. Tompkins, 304 U.S. 64; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487) and that under the law of Missouri (as distinguished from the law of Mississippi where the Moore case was tried) an employee must exhaust the administrative remedies under his contract of employment in order to sustain his cause of action. The order dismissing the suit was affirmed.

The net effect of these cases was to define an area within which the jurisdiction of the Railway Adjustment Board was exclusive and another area within which resort could be had to the courts. When in a proper case resort is had to a state court, it becomes subject to such defenses as are lawful in that state. This includes questions such as are here involved, that is:

1. Whether plaintiff was required to exhaust the remedies provided in the agreement, and

2. Whether the agreement, properly interpreted, provided a complete system of arbitrament of the provisions for discharge, and whether the decisions thereon are final and exclude resort to a court.

We must apply Illinois law to those questions.

While the doctrine of exhaustion of remedies is well established in Illinois, our Supreme Court has never specifically passed upon it in an employer-employee dispute. The Court of Appeals for this circuit, however, has found and applied the Illinois law in a labor case, Anson v. Hiram Walker & Sons, 222 F.2d 100. In that case, employees of a distilling company sought damages for breach of a collective contract of employment and reinstatement of their seniority rights. The court, after finding that plaintiffs had not exhausted their remedies, said, p. 104:

"In Illinois it is well settled that where a member of a union or other association, brings suit and it appears that his remedies are governed by laws and regulations of the association to which he belongs, he must, before he can succeed, show that he has exhausted all of the remedies provided by those laws and regulations. (Citing cases.) This court, in United Protective Workers of America v. Ford Motor Co., 7th Cir., 194 F.2d 997, held that ordinarily a complaint by an employee must show that plaintiff followed the grievance procedure provided for in the collective bargaining agreement. Without such a showing plaintiffs may not resort to the courts for relief. Consequently, under Transcontinental & Western Air, Inc. v. Koppal, supra, and the Illinois governing law, plaintiffs, even if they sued for wrongful discharge, could not maintain their action unless they showed exhaustion of their remedies under the collective bargaining agreement."

Plaintiff in the instant case asserts that this is dicta. With respect to this, we said in Larson v. Johnson, 1 Ill. App.2d 36, 40, 116 N.E.2d 187:

"If the opinion expressed on a legal question is one casually reached by the court on an issue unrelated to the essence of the controversy or based on hypothetical facts, then it is obiter dictum. If, however, the question involved is one of a number of legal issues presented by the facts of that particular case, the court's decision on that question is not dictum even though it be the last ground of many decided by the court, all in support of its final conclusion. (Goodhart, 40 Y.L.J. 161, 180). It is often stated that all except that which is necessary to the decision of a case is obiter dictum. This is misleading, for nothing but the bare finding of the court is absolutely necessary to its decision as between the parties. For the purpose of legal precedent, we must look to all the issues presented by the facts of the case and to the legal principles applied by the court in the final determination of those ...

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