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Miller v. General Motors Corp.

decided: April 9, 1982.


Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 79-485-C -- James E. Noland, Judge.

Before Bauer and Wood, Circuit Judges, and Evans, District Judge.*fn*

Author: Evans

A Letter Agreement negotiated by appellees United Auto Workers (UAW) and General Motors (GM) in 1976 provided for the reinstatement of employee grievances if one of the union's internal appellate tribunals determined that the grievance had been improperly disposed of by union officials. A proviso of that agreement shielded GM from back pay liability for the period of time between the initially improper disposition of the grievance and its later reinstatement. The issue before us is whether, given this reinstatement provision, an employee must exhaust internal union appeal procedures as a condition to bringing suit against his union and employer under § 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185(a). The district court, 513 F. Supp. 748, granted summary judgment in favor of the appellees on the ground that exhaustion was required. We affirm.

Appellant Charles P. Miller was terminated by GM in September of 1978 for failing to report for work within three days after the expiration of a sick leave. On October 2, Miller filed a grievance with his local union protesting his discharge and seeking reinstatement and back pay. After investigation and efforts to compromise the grievance, George R. Mapes, Chairman of the local's Shop Committee, withdrew Miller's grievance because, in his opinion, it lacked merit and could not be won. According to Miller, whose version of the facts must be accepted as true, Mapes informed him that he could appeal the withdrawal using internal union appeal procedures, and could succeed in having the grievance reinstated, but that if reinstatement of the grievance occurred, Mapes would again withdraw it. Miller then contacted two higher-ranking union officials who corroborated Mapes' authority to do as he had said. Miller did not attempt to initiate any internal appeals, and on June 13, 1979 commenced this action under § 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185(a), alleging that the appellee unions breached their duty of fair representation by failing properly to process his grievance, and that GM breached the collective bargaining agreement by unlawfully terminating him. His complaint prayed for reinstatement and back pay.

In considering the defendants' motions for summary judgment, the district court addressed separately the exhaustion requirement with respect to the unions and GM. The district court concluded that exhaustion was required with respect to the unions because the internal appeal process was fair and reasonable, the unions were not estopped from requiring exhaustion because of Mapes' representations, and Miller could look to the unions for damages resulting from their unlawful conduct. GM was awarded summary judgment in principal reliance on Harrison v. Chrysler Corp., 558 F.2d 1273 (7th Cir. 1977), the district court concluding that the intra-union appeal process could result in a reversal of the union's refusal to press the grievance, the grievance could be reinstated, and resort to internal appeal procedure would not be futile.

Subsequent to the district court's determination, the Supreme Court decided Clayton v. Int'l Union, UAW, et al., 451 U.S. 679, 101 S. Ct. 2088, 68 L. Ed. 2d 538 (1981), in which it held that an employee must exhaust internal union appeals procedures as a precondition to a § 301(a) suit "(w)here internal union appeals procedures can result in either complete relief to an aggrieved employee or reactivation of his grievance...." 451 U.S. at 692, 101 S. Ct. at 2097. Recently we held that Clayton required exhaustion in a situation where an employee sought only monetary damages which were recoverable through the internal union appeals procedure. Tinsley v. U.P.S., et al., 665 F.2d 778 (7th Cir. 1981). Miller argues that Clayton does not require exhaustion in this case because, even though the Letter Agreement provides for the reactivation of employee grievances, the provision limiting GM's back pay liability prevents an employee from receiving as full a back pay recovery as might otherwise be available in a § 301(a) suit.*fn1

The court in Clayton determined that an exhaustion requirement must be analyzed in terms of the national labor policy encouraging private, as opposed to judicial, resolution of disputes over collective bargaining agreements. That policy "complements the union's status as the exclusive bargaining representative" and "enhance(s) the union's prestige with employees." Republic Steel Corp. v. Maddox, 379 U.S. 650, 652, 85 S. Ct. 614, 616, 13 L. Ed. 2d 580 (1965). Employers also benefit from the policy because it imposes limitations on the employee's choice of remedies. Id. Permitting an employee to sidestep exclusive contract provisions for grievance resolution would " "exert a disruptive influence upon both the negotiation and administration of collective agreements.' " Id., quoting Teamsters Local v. Lucas Flour Co., 369 U.S. 95, 103, 82 S. Ct. 571, 576, 7 L. Ed. 2d 593 (1961). A grievance reactivation provision such as the one involved in this case links the internal union appeals procedure with the collectively bargained grievance resolution mechanism in a way that implicates this important policy:

"Where internal union appeals procedures can result in either complete relief to an aggrieved employee or reactivation of his grievance, exhaustion would enhance the national labor policy of encouraging private resolution of contractual labor disputes. In such cases, the internal union procedures are capable of fully resolving meritorious claims short of the judicial forum. Thus, if the employee received the full relief he requested through internal procedures, his § 301 action would become moot, and he would not be entitled to a judicial hearing. Similarly, if the employee obtained reactivation of his grievance through internal union procedures, the policies underlying Republic Steel would come into play, and the employee would be required to submit his claim to the collectively-bargained dispute-resolution procedures. In either case, exhaustion of internal remedies could result in final resolution of the employee's contractual grievance through private rather than judicial avenues." Clayton, supra.

We believe the policies underlying Republic Steel and reiterated in Clayton are served by requiring exhaustion even if the employee may not be able to obtain the same relief in the reactivated grievance procedure as might have been available in a § 301(a) suit. As long as the intra-union appeals process could result in the reinstatement of a grievance, thus bringing it back within the framework of the collectively negotiated procedure for settling contract disputes, final resolution of the employee's contractual grievance is possible through the preferred private means.

Clayton predicated exhaustion upon the internal appeals procedure being able to produce one of two results: either a reactivation of the grievance, or complete relief (as measured by that available under § 301(a)) through the internal appeals procedure itself. Where intra-union appeals procedures cannot reactivate an employee's grievance, measuring the adequacy of the employee's internal remedies by remedies available under § 301(a) is logical: being foreclosed from the contractual dispute resolution procedure, the employee no longer has the opportunity to effect a settlement of the contract grievance through the collectively negotiated process. While it is permissible under the national labor policy to require an employee to utilize contract grievance procedures before seeking judicial relief, purely intra-union mechanisms are not collectively negotiated, and resort to them by an employee does not necessarily contribute to the integrity of the collective bargaining system or the policy favoring the use of contractual grievance resolution mechanisms. See: Vaca v. Sipes, 386 U.S. 171, 191, 87 S. Ct. 903, 917, 17 L. Ed. 2d 842 (1967). Thus, in order to justify requiring an employee to exhaust non-collectively negotiated procedures, those procedures must be able to provide "complete relief" as measured by § 301(a) standards. Clayton, supra 451 U.S. at 692, 101 S. Ct. at 2097; Tinsley, supra.

The logic requiring "complete relief" compatible with § 301(a) standards does not apply where the grievance can be reinstated through the internal union appeals procedure. The need for complete relief, by § 301(a) standards, is not compelling, and we do not think Clayton requires it, where higher principles favoring collective negotiations and resolution of disputes through negotiated procedures may still be given effect. It is our conclusion that requiring exhaustion of intra-union appeals procedures in the instant case is consistent with Clayton and with national labor policy.

The appellant offers two other reasons why exhaustion in this case should not be required. First, he contends that Mapes' representations regarding the likely fate of a reinstated grievance estop the unions from raising Miller's failure to exhaust the appeals procedure. In Newgent v. Modine Mfg. Co., 495 F.2d 919 (7th Cir. 1974), and again in Baldini v. Local Union No. 1095, et al., 581 F.2d 145 (7th Cir. 1978), we considered similar arguments. Newgent had filed a grievance protesting his termination, but after processing it through the initial stages, the union decided not to seek arbitration. Newgent, claiming that he was told by the union president that any effort to utilize the internal appeals procedure would be fruitless, commenced a § 301(a) suit without attempting an intra-union appeal. Responding to his estoppel argument, we stated:

"As noted supra, the exhaustion of union remedies is mandatory under the Union's Constitution, and there is no question that the Union remedies are in fact fair and adequate and were freely available to Newgent. By becoming a member of the Union Newgent was contractually obligated to exhaust Union remedies before resorting to a court action. Neal (v. System Board of Adjustment) supra, 348 F.2d (722) at 726. Necessarily implied in this obligation is the duty to become aware of the nature and availability of union remedies. Newgent was not "justified in remaining in ignorance of the provisions governing his own union ...

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