Republic Steel Corp. v. Maddox
Opinion of the Court
delivered thé opinion of the Court.
Respondent Maddox brought suit in an Alabama state court against his employer, the Republic Steel Corporation, for severance pay amounting to $694.08, allegedly owed him under the terms of the collective bargaining
The case was tried on stipulated facts without a jury. Judgment was awarded in favor of Maddox, arid the appellate courts of Alabama affirmed on the theory that state law applies to suits for severance pay since, with the employment relationship necessarily ended, no further danger of industrial strife exists warranting the application of federal labor law.
I.
As a general rule in cases to which federal law applies, federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress.
A contrary rule which would permit an individual employee to completely sidestep available grievance procedures in favor of a lawsuit has little to commend it. In addition to cutting across the interests already mentioned, it would deprive employer and union of the ability to establish a uniform and exclusive method for orderly settlement of employee grievances. If a grievance procedure cannot be made exclusive, it loses much of its desirability as a method of settlement. A rule creating such a situation “would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements.” Teamsters Local v. Lucas Flour Co., 369 U. S. 95, 103.
Once it is established that the federal rule discussed above applies to grievances in general, it should next be inquired whether the specific type of grievance here in question — one relating to severance pay — is so different in kind as to justify an exception. Moore v. Illinois Central R. Co., and Transcontinental & Western Air, Inc. v. Koppal, supra, are put forward for the proposition that it is.
In Moore, the Court ruled that a trainman was not required by the Railway Labor Act to exhaust the administrative remedies granted him by the Act before bringing suit for wrongful discharge. Mr. Justice Black, for the Court, based the decision on the use of permissive language in the Act — disputes “may be referred ... to the . . . Adjustment Board . . . .”
“Moore was discharged by the railroad. He could have challenged the validity of his discharge before the Board, seeking reinstatement and back pay. Instead he chose to accept the railroad’s action in discharging him as final, thereby ceasing to be an employee, and brought suit claiming damages, for breach of contract. As we there held, the Railway Labor Act does not bar courts from adjudicating such cases. A common-law or statutory action for wrongful discharge differs from any remedy which*655 the Board has power to provide, and does not involve questions of future relations between the railroad and its other employees.” 339 U. S. 239, at 244.
This distinction was confirmed in Transcontinental & Western Air, Inc. v. Koppal, supra:
“Such [a wrongfully discharged] employee may proceed either in accordance with the administrative procedures prescribed in his employment contract or he may resort to his action at law for alleged unlawful discharge if the state courts recognize such a claim. Where the applicable law permits his recovery of damages without showing his prior exhaustion of his administrative remedies, he may so recover, as he did in the Moore litigation, supra, under Mississippi law.”11 345 U. S. 653, at 661.
Federal jurisdiction in both Moore and Koppal was based on diversity; federal law was not thought to apply merely by reason of the fact that the collective bargaining agreements were subject to the Railway Labor Act. Since that timé the Court has made it clear that substantive federal law applies to suits on collective bargaining agreements covered by § 204 of the Railway Labor Act, International Assn. of Machinists v. Central Airlines, Inc., 372 U. S. 682, and by § 301 (a) of the LMRA, Textile Workers v. Lincoln Mills, 353 U. S. 448. Thus a major underpinning for the continued validity of the Moore case in the field of the Railway Labor Act, and more importantly in the present context, for the extension of its rationale to suits under § 301 (a) of the LMRA, has been removed.
III.
The federal rule would not of course preclude Maddox’ court suit if the parties to the collective bargaining agreement expressly agreed that arbitration was not the exclu
“It is the purpose of this Section to provide procedure for prompt, equitable adjustment of claimed grievances. It is understood and agreed that unless otherwise specifically specified elsewhere in this Agreement grievances to be considered hereunder must be filed within thirty days after the date on which the fact or events upon which such alleged grievance is based shall have existed or occurred.
“Any Employee who has a complaint may discuss the alleged complaint with his Foreman in an attempt to settle it. Any complaint not so settled shall constitute a grievance within the meaning of this Section, 'Adjustment of Grievances’.
“Grievances shall be handled in the following manner:
“STEP 1. Between the aggrieved Employee, his Grievance Committeeman or Assistant Grievance Committeeman and the Foreman.”
The procedure calls for two more grievance-committee steps capped with binding- arbitration of matters not satisfactorily settled by the initial steps.
The language stating that an employee “may discuss” a complaint with his foreman is susceptible to various interpretations; the most likely is that an employee may, if he chooses, speak to his foreman himself without bringing in his grievance committeeman and formally embarking on Step 1. Use of the permissive “may” does not of itself reveal a clear understanding between the contract
Finally, Maddox suggests that it was not possible for him to make use of the grievance procedure, the first step of which called for a discussion within 30 days of his discharge with his foreman, because a mine that has permanently closed has no foreman — indeed, no employees of any kind. This casuistic reading of the contract cannot Ipe accepted. ■ The foreman did not vanish; and it is unlikely that the union grievance procedure broke down within 30 days of Maddox’ discharge. In any event, the case is before us on stipulated facts; in neither the facts nor the pleadings is there any suggestion that Maddox could not have availed himself of the grievance procedure instead of waiting nearly three years and bringing a court suit.
Reversed.
The section of the contract dealing with severance allowance provided in relevant part:
“When, in the sole judgment of the Company, it decides to close permanently a plant or discontinue permanently a department of a mine or plant, or substantial portion thereof and terminate the employment of individuals, an Employee whose employment is terminated either directly as a resúlt thereof because he was not entitled to other employment with the Company under the provisions of Section 9 of this Agreement — Seniority and Subsection C of this Section 14, shall be entitled to a severance allowance in accordance with and subject to the provisions hereinafter set forth in this Section 14.”
See infra, p. 658.
61 Stat. 136 (1947), as amended, 29 U. S. C. §141 et seq. (1958 ed.).
275 Ala. 685, 158 So. 2d 492.
48 Stat. 1185 (1934), 45 U. S. C. § 151 et seq. (1958 ed.).
See infra, p. 657.
Smith v. Evening News Assn., 371 U. S. 195, 196, n. 1 (by implication); Belk v. Allied Aviation Service Co., 315 F. 2d 513, cert. denied, 375 U. S. 847; see Cox, Rights Under a Labor Agreement, 69 Harv. L. Rev. 601, 647-648 (1956). The proviso of § 9 (a) of the National Labor Relations Act, as amended, 29 U. S. C. § 159 (a) (1958 ed.), is not contra; Black-Clawson Co. v. Machinists, 313 F. 2d 179.
See, e. g., Summers, Individual Rights in Collective Agreements and Arbitration, 37 N. Y. U. L. Rev. 362 (1962); Cox, Rights Under a Labor Agreement, 69 Harv. L. Rev. 601 (1956); Note, Federal Protection of Individual Rights Under Labor Contracts, 73 Yale L. J. 1215 (1964).
See infra, pp. 657-658.
45 U. S. C. § 153 (i) (1958 ed.).
Mississippi law, which controlled in Moore v. Illinois Central R. Co., did not require exhaustion (but see Illinois Central R. Co. v. Bolton, 240 Miss. 195, 126 So. 2d 524 (1961)). Missouri law controlled in Koppal and did require exhaustion. The suing employee therefore lost.
See n. 1, supra.
“Between” in the statute refers to “contracts,” not “suits.” Smith v. Evening News Assn., 371 U. S. 195, 200.
By refusing to extend Moore v. Illinois Central R. Co. to § 301 suits, we do not mean to overrule it within the field of the-Railway Labor Act. Consideration of such action should properly await a case presented under the Railway Labor Act in which the various distinctive features of the administrative remedies provided by that Act can be appraised in context, e. g., the make-up of the Adjustment Board, the scope of review from monetary awards, .and the ability of the Board to give the same remedies as could be obtained by court suit.
Of course a court suit on the collective bargaining agreement •would still be governed by federal law. Textile Workers v. Lincoln Mills, 353 U. S. 448.
Dissenting Opinion
dissenting.
This is an ordinary, common, run-of-the-mill lawsuit for breach of contract brought by respondent Charlie Maddox, an iron miner employed by petitioner Republic Steel, to recover $694.08 of wages which he said the company owed him. This amount he said was due by the terms of a contract made between the company and the union representing workers at the mine at which Maddox worked, a contract which provided that if any employee • should be discharged because the company “permanently” closed the mine, he should continue to be paid the amount of his regular wages for a number of weeks after the discharge. The mine closed down, Maddox lost his job, but
In thus deciding on its own, or deciding that Congress somehow has. decided, to expand apparently without limit the kinds of claims subject to compulsory arbitration, to include even wage claims, and in thus depriving individual laborers of the right to handle their wage claims for themselves, today’s decision of the Court interprets federal law in a way that is revolutionary. Yet the .Court disposes of this case as easily as it would reach the conclusion that 2 plus 2 equal 4. First the Court says that the contract between the union and the company provides that a laborer who wants to assert a “contract grievance” is bound to attempt to use the contract grievance procedure, which requires several stages of company-union meetings, negotiations, etc.,
I think one crucial flaw in the Court’s logical presentation is that it treats things as the same which are in fact different. “Grievance” is a word of many meanings in many contexts, and yet the Court uses it without any discrimination among them. As used in the industrial field “grievance” generally signifies something that has happened that is unsatisfactory to employers or employees in connection with their work. Failure to settle serious and widespread grievances has sometimes brought about industrial tensions, strikes and violence, often disrupting the peace and doing irreparable harm to the economy of the Nation. In order to try to prevent such widespread disastrous results to the public, arbitration has come to be accepted as a good way to settle such semi-public controversies, which are more in the nature of power struggles between giants than ordinary justiciable controversies involving individual laborers.
For the individual, whether his case is séttled by a professional arbitrator or tried by a jury can make a crucial difference. Arbitration differs from judicial proceedings, in many ways: arbitration carries no right to a jury trial as guaranteed by the Seventh Amendment; arbitrators need not be instructed in the law; they are hot bound by rules of evidence; they need not give reasons- for their awards; witnesses need not be sworn; the record of proceedings need not be complete; and judicial review, it has been held, is extremely limited.
The past decisions of this Court which are closest to the case before us are not Lincoln Mills and cases like it, which involved broad conflicts between unions and employers with reference to contractual terms vital to settlement of genuine employer-union disputes. The cases really in point are those which involved agreements governed by the Railway Labor Act
The Court’s opinion manifests great concern for the interests of employers and unions, but not, I fear, enough understanding and appreciation for an individual worker caught in the plight Maddox is in. The Court refers with seeming approval to the “ ‘common law’ of the plant,” and directs, attention to the clear interest that the union has in handling employees’ grievances in order to “enhance the union’s prestige with employees.” It also refers to the great interest that an employer has (and I agree) in having a complicated procedural system which dissatisfied employees are here compelled to follow, which ends up in binding arbitration and which relieves the employer of a lawsuit. The Court then expresses its view that allowing this former employee to sue without going through the grievance procedure and arbitration, as he would be permitted to do in this case by the law of his State,
I am wholly unable to read § 301 as laying any such restrictive burdens on an employee. And I think the difference between my Brethren and me in this case, is not simply one concerning this Court’s function in interpreting or formulating laws. There is also apparently a vast difference between their philosophy and mine concerning litigation and the role of courts in our country. At least since Magna Carta people have desired to have a system of courts with set rules of procedure of their own and with certain institutional assurances of fair and unbiased reso- ' lution of controversies. It' was in Magna Carta, the English Bill'of Rights, and other such charters of liberty, that there originally was expressed in the English-speaking world a deep desire of people to be able to settle differences. according to standard, well-known procedures in. courts presided ovefr by independent judges with, jurors taken from the public. Because of these deep-seated'desires, the right to sue and be sued in courts according to the “law of the land,” known later as “due process of law,” became recognized. That right was . written into the Bill of Rights of our Constitution and in the constituí tions of the States. See Chambers v. Florida, 309 U. S. 227, 235-238. Even if it be true, which I do not concede,
I would affirm.
Although the Court calls this “severance pay,” it can be seen that the claim was simply one for wages which were to continue for a stated period after discharge.
The grievance procedure set out in the contract was as follows:
" Any Employee who has a complaint may discuss the alleged complaint with his Foreman in an attempt to settle it. Any complaint.*661 not so settled shall constitute a grievance within the meaning of this. Section, 'Adjustment of Grievances.’
“Grievances shall be handled in the following manner:
“Step 1. Between the aggrieved Employee, his Grievance Committeeman or Assistant Grievance Committeeman and the Foreman.
“Step 2. Between the Employee, his Grievance Committeeman or Assistant Grievance Committeeman and the Superintendent or his representative.
“Step 3. Between the Grievance Committee, a representative of the International Union, the Superintendent of Industrial Relations, the Superintendent, and such Company representatives as he may select. Accurate minutes of this meeting shall be prepared by the Company not later than five days, after the date of the meeting and shall be signed by representatives of the Union and the Company.
“Grievances not appealed from the decision rendered in writing in any of the three steps specified herein, within ten days from the date of such decision, shall be considered settled on the basis of the decision last made and shall not be eligible for further appeal.
“If any grievance is not answered within the time limits hereinafter specified in this Section, unless an extension of time has been mutually agreed upon, either party after notifying the other party by notation on the grievance papers of such intent may appeal to the next step.
“Grievances presented in the first step hereof shall be reduced to writing on forms provided by the Company, dated and signed by the Employee involved and two copies given to the Foreman, the Foreman will have inserted in the appropriate place oh the form his disposition of the matter and will sign and date same, returning one copy to the Assistant Grievance Committeeman or Grievance Committeeman.
“The following time shall be allowed the Company to give an answer in each of the respective steps before the grievance may be processed to the next step: Step 1, three days exclusive of Sundays and Holidays; Step 2, seven days; Step 3, fifteen days.
“Step 4. Except as otherwise expressly provided in this Agreement grievances not satisfactorily settled in Step 3 may bv-written notice within ten days from the date of the written decision in Step 3, be appealed to an impartial Arbitrator to be appointed by mutual*662 agreement of the parties hereto within fifteen days after either party has requested arbitration. The decision-of the Arbitrator shall be final.”
61 Stat. 156, 29 U. S. C. § 185 (a) (1958 ed.). Section 301 (a) in its entirety reads as follows:
“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.”
See, e. g., Teamsters Local v. Lucas Flour Co., 369 U. S. 95; United Steelworkers v. Enterprise Wheel & Car Corp., 363 U. S. 593; United Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574; United Steelworkers v. American Mfg. Co., 363 U. S. 564.
Compare the distinction in cases under the Railway Labor Act, 44 Stat. 577, as amended, 45 U. S. C. § 151 et seq. (1958 ed.) between “major” and “minor” disputes. See, e. g., Brotherhood of R. Trainmen v. Chicago R. & I. R. Co., 353 U. S. 30.
See Bernhardt v. Polygraphic Co., 350 U. S. 198, 203; Wilko v. Swan, 346 U. S. 427, 436. But see Independent Petroleum Workers v. American Oil Co., 324 F. 2d 903 (C. A. 7th Cir.), affirmed by an equally divided Court, 379 U. S. 130.
353 U. S., at 455.
Id., at 459, n. 9.
See, e, g., United Steelworkers v. Enterprise Wheel & Car Corp., 363 U. S. 593; United Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574; United Steelworkers v. American Mfg. Co., 363 U. S. 564.
44 Stat. 577, as amended, 45 U. S. C. § 151 et seq. (1958 ed.). The Act of April 10,1936, c. 166, makes the Railway Labor Act applicable to aviation workers. 49 Stat. 1189, 45 U. S. C. § 181 (1958 ed.).
Alabama law does not require exhaustion of grievance procedures and arbitration in a case like this one. Republic Steel Corp. v. Maddox, 275 Ala. 685, 158 So. 2d 492; Woodward Iron Co. v. Stringfellow, 271 Ala. 596, 126 So. 2d 96.
The AFL-CIO has filed an amicus brief supporting the employer in this case.
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