Petition — ITT Gilfillan v. Clayton

Supreme Court brief1980

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IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1980

No. 8Q=-54

ITT GILFILLAN, a corporation,

Petitioner,

vs.

CLIFFORD E. CLAYTON,

Respondent.

ON A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A

WRIT OF CERTIORARI

PARKER, MILLIKEN, CLARK & O’HARA

EVERETT F. MEINERS

333 South Hope Street, 27th Floor

Los Angeles, California 90071

(213) 683-6500

Attorneys for Petitioner.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1980

No.

ITT GILFILLAN, a corporation,

Petitioner,

LAY

CLIFFORD E. CLAYTON,

Respondent.

ON A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A

WRIT OF CERTIORARI

PARKER, MILLIKEN, CLARK & O’HARA

EVERETT F. MEINERS

333 South Hope Street, 27th Floor

Los Angeles, California 90071

(213) 683-6500

Attorneys for Petitioner.

No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1980

ITT GILFILLAN, a corporation,

Petitioner,

vs.

CLIFFORD E. CLAYTON,

Respondent.

PETITION FOR A WRIT OF

CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

The petitioner ITT GILFILLAN

respectfully prays that a Writ of

Certiorari issue to review the

Judgment and Revised Opinion of the

United States Court of Appeals for the

Ninth Circuit entered in the entitled

case on April 14, 1980.

QUESTIONS PRESENTED

l. Does the Employee's failure to

exhaust internal union remedies, which

were found to be adequate by the

District Court, bar his action against

the Company as well as the Union.

2. Does the fact that the internal

union remedies only provide monetary

damages and do not’ provide’ for

reinstatement make those’ remedies

"inadequate" as a defense for the

Company.

36 May internal union remedies be

deemed adequate to bar an action

against the Union because of the

Employee's failure to exhaust those

remedies, but be deemed inadequate to

bar an action against the Company

because they can not provide

reinstatement of the grievance.

4. Is the Union a necessary

and indispensable party for’ the

Employee to prove that the Union

breached its duty of fair

representation.

5. May an employee who chooses

not to exhaust internal union

procedures, proceed solely against the

Company and require the Company to

present the Union's defense to the

alleged breach of the duty of fair

representation.

iii

PARTIES APPEARING

BEFORE THE NINTH CIRCUIT

COURT OF APPEALS

Respondent Clifford Clayton was

the plaintiff before the District

Court in the Central District of

California,

Petitioner ITT Gilfillan was one

of the defendants in the District

Court. There were two other

defendants: the United Automobile,

Aerospace and Agricultural Implement

Workers of America, Local Union

No. 509 and the International Union,

United Automobile, Aerospace and

Agricultural Implement Workers’ of

America.

TABLE OF CONTENTS

Page

QUESTIONS is ce cewed eee eee

PARTIES APPEARING BEFORE

THE NINTH CIRCUIT COURT

OF I 6 Ns Ce ee edeneeene

TABLE OF CONTENTS ..ceeeccceccccseeed

TABLE OF AUTHORITIES......eeeeee0001X

OPINIONS BELOW.....cccccccccccseccveed

JURISDICTION. .ccccccccccccecscccccccee

STATUTORY PROVISIONS INVOLVED.......3

1. United States Code,

Title 29 §185

2. United States Code,

Title 29 §411 (a) (4)

3. United States Code,

Title 28 Federal Rules

of Civil Procedure, Rule 19

STATEMENT OF THE Pts ctebovcsestoaeoce

REASONS FOR GRANTING THE WRIT

I COS LE a er ree eee

TABLE OF CONTENTS

(cont inued)

PAGE

II A Serious Conflict Exists

Among Federal Court

Decisions

A. The Nonexhaustion Of

Intraunion Remedies

Defense Is Available

To The Employer Only....19

B. The Employer Can

Rely Upon The

Nonexhaustion Defense

Unless The Plaintiff

Has A Proper Excuse

For Nonexhaustion.......23

C. The Employer Is

Unable To Raise The

Nonexhaustion Defense...32

D. COOTER cécccesseceocedl

III The Union Is A Necessary

Party When Litigation

Concerns A Breach Of The

Union's Duty Of Fair

Representation

A. Breach Of The Union's

Duty Of Fair Represen-

tation Is A Threshold

SBOUR sc cccccececscesssosoese

TABLE OF CONTENTS

(continued)

PAGE

1. The Union As An indispen-

sable Party Because Of

The Duty Of Fair

Representation Issue.........40

2. The Union As An Indispen-

sable Party Because Of

The Relief Sought.......+++++45

B. The Court Of Appeals

Erroneously Concluded

That The Employer

Would Not Be Materially

Prejudiced If The Union

Was Dismissed.......++++47

IV Plaintiff's Failure to Exhaust

His Intraunion Remedies Pre-

vents Any Finding That There

Has Been A Breach Of The

Duty Of Fair Representation

A. The Nonexhaustion

Issue Goes To The

Merits Of The Duty Of

Fair Representation

CLOMc cccecccceevccevscena

vii

TABLE OF CONTENTS

(continued)

PAGE

B. The Intraunion

Remedies Available

To Plaintiff Are

Sufficient To Redress

Any Alleged Wrongs......55

V The Court Of Appeals Erred

In Finding That Intraunion

Remedies Are Adequate As The

Di ie ChhEceee ie hee beeecece cc 59

EEE LEENA ITO ETE Y

APPENDIX REVISED OPINION, U.S.

COURT OF APPEALS FOR THE

NINTH CIRCUIT, FILED

April 14, 1980

ORDER, U.S. COURT OF

APPEALS FOR THE NINTH

CIRCUIT, FILED April

14, 1980

OPINION, U.S. COURT OF

APPEALS FOR THE NINTH

CIRCUIT, FILED Sept. 4,

1979

NOTICE OF ENTRY, U.S.

DISTRICT COURT CENTRAL

DISTRICT OF CALIFORNIA

DATED May 31, 1977

FINDINGS OF FACT AND

CONCLUSIONS OF LAW

FILED May 27, 1977

viii

TABLE OF AUTHORITIES

Cases Page

Aldridge v. Ludwig -

Honold Manufacturing,

385 F. Supp. 695

(E.D. Pa. 1974),

aff'd 517 F.2d 1397

(3rd Cir. 1975), cert.

denied 423 U.S. 937,

96 S. Ct. 298, 46 L.Ed.

2G 270 (1975S) ccccccocscccetes B20

Anderson v. Grocers Supply Co.,

483 F. Supp. 73 (S.D.

Tex. ROUTE Tb 66 cascdsed seaas

Atwood v. Pacific Maritime Ass'n., ‘

432 F. Supp. 491

(D. Ore. i. PEA POT ERE TERT S. . oT 45,

Baldini v. Local Union

No. 1095,

581 F.2d 145

(Feh Cie. LTB) ccccccsccess

Bowen v. United States

Postal Service,

470 F. Supp. 1127

(W.D. Va. 1979) ..22552+--58

TABLE OF AUTHORITIES

Cases Page

Bradley v. Ford Motor Co.,

417 F. Supp. 23 (N.D. Ill.

APTPh cccevsewceseosiossces4O, 41,

42, 45

Brookins v. Chrysler Corp.,

381 F. Supp. 563 (E.D. Mich.

BPTED 66 vewbedebs ceccoseeSee 54

De Arroyo v. Sindicato

de Trabajadores Packinghouse,

425 F.2d 281 (lst Cir.

1970), cert. denied 400

UoBe. OFte Ba Be. Ges

121, 27 L. Ed. 2d 115

CEST) onéocdendcsesecsesce cd

Dezura v. Firestone,

470 F. Supp. 121

(E.D. Pa. 1979), aff'd

mem. 612 F.2d 571 (3rd

i CFG tae ee ee

Fizer v. Safeway Stores, Inc.,

586 F.2d 182

(10th Cir. EPsebooseccoconas 35

Fleming v. Chrysler Corp.,

416 F. Supp. 1258

(E.D. Mich. 1975),

aff'd. 575 F.2d 1187

gs SR | ee ©

TABLE OF AUTHORITIES

Cases Page

Fruit and Vegetable Packers and

Warehousemen Local 760 v. Morley,

378 F.2d 738

(9th Cir. 1967).........-61

Geddes v. Chrysler Corp.,

608 F.2d 261 (6th

Cie. > | ere 33

Gerb v. Boeing Compan

102 LRRM 2854 (E.D.

Pa. >.) ers i

Harrison v. Chrysler Corp,,

558 F.2d O73 (7th

Cir. oy) Pere 21,

John Wiley & Sons, Inc. v.

Livingstun,

U.S. 543, 84

S. Ct. 909, 11 L. Ed.

2d 898 (1964)... eee e eed?

Johnson v. Colts, Inc.,

306 F. Supp. 1076

(D.Conn. 1969) ....22e0002242

Kaiser v. Local No. 83,

577 F.2d 642 (9th

Cir. Dee hcsceuo6eeeseanceeeee

TABLE OF AUTHORITIES

Cases Page

Kinnunnen v. American

Motors Corp.,

56 F.R.D. 102 (E.D.

Wis. BPO) 6006000000 000000Re 46

Kobielnik v. Teamsters,

470 F. Supp. 125 (E.D. Pa.

BCE h 44046064666 boenes-eocee

Miller v. Local 50,

468 F. Supp. 193 (D.

ae oy, ) eee eee

Neal v. System Board of

Adjustment,

348 F.2d 722 (8th

CES... L9SS ciccvcccccvccee cS

Neiger v. Sheet Metal Workers,

470 F. Supp. 622 (W.D.

Mo. Lo, ) eee eee

Neipert v. Arthur G..McKwe

& CO. e

448 F. Supp. 206

(Bebe POs BOTS) ccocvevesscal

xii

TABLE OF AUTHORITIES

Cases Page

Pawlak v. International

Brotherhood of Teamsters,etc.,

444 F. Supp. 807

(M.D. Pa. 1977),

aff'd. 571 F.2d 572

bil go ae > | a | Pe

Petersen v. Rath Packing Co.

461 F.2d 312 (8th

CEL ROT al be cosevicecsoeceaS

Pierce v. Fox Manufacturing

CO. »

97 LRRM 2321 (N.D.

Ga. RUT ED 6s 6060:00066¢6066088

Provencal v. Allegheny

Airlines, Inc.,

383 F. Supp. 159

(D. Rhode

Teland 1974) .ccccccccccceds

Rainey v. Missouri

Utilities Co.,

596 F.2d 310 (8th

Cir. 1979). ccceeeseeceeee 23, 24,

xiii

TABLE OF AUTHORITIES

Cases Page

Rehm v. Quaker Oats,

478 F. Sup. 619 (M.D.

Pa. tl oy ) Pe ee

Richardson v. Communications

Workers of America,

443 F.2d 974 (8th Cir.

RPUA Cb esevictivees cceneeee

Sherba v. Teamsters Local 400,

101 LRRM 2582 (N.D. Ohio

SOTO évod beSS Oe bOskae

Smart v. Ellis Trucking

Co., Inc.,

580 F.2d 215 (6th

Car. io Pee ee ee. |

Soto Segarra v. Sea-Land

Service, Inc.,

581 F.2d 291 (lst Cir.

SOTEL 0 6440000045 0e 4006644

Textile Workers Union of

America v. Lincoln Mills,

353 U.S. 466, 77 &.Ct.

912, 1 L.Ed. 2d 972

Eh 0 } Perera ret ae me,

xiv

TABLE OF AUTHORITIES

Cases Page

Thompson v. Brotherhood

of Sleeping Car Porters,

F. (4th

ee BOB PeesccccccccccecDl

Townsend v. Exxon,

420 F. Supp. 189

(D. Mass. DUPED ieeccoesvce OO

Vaca v. Sipes,

386 U.S. 171, 87 S.Ct.

903, 17 L.Ed. 2d 842

(1967) .ccccccccccccccccceddy Jl,

39, 47,

49, 54

Vara v. Dillon Companies,

Inc.,

615 F.2d 1315 (10th

CEEs BOBO) ccccccccccccccetay 39

Wade v. Southern Pacific

Company,

243 F. Supp. 307 (S.D.

MOR. LOSES) cccccccccccccceda

Willetts v. Ford Motor Co.,

583 F.2d 852 (6th

De BePebevesccccecccecedey IU,

Sie Ja

TABLE OF AUTHORITIES

Cases Page

Winter v. Local Union No. 639,

569 F.2d 146 (D.C.

Cas. Ly esPeererreerererTrire | © 35

xvi

OPINIONS BELOW

The initial opinion filed by the

Ninth Circuit Court of Appeals. on

September 4, 1979 was not officially

reported. That opinion appears in the

Appendix hereto, and is unofficially

reported at 102 LRRM 2190. A timely

Petition for Rehearing and Suggestion

of Appropriateness of Rehearing in

Banc was denied on April 14, 1980. A

Revised Opinion of the Court of

Appeals was entered on April 14, 1980

(hereinafter, "Rev. Op."). It is not

officially reported as of the date of

this Petition and appears in the

Appendix hereto,

The initial Judgment in this case

was entered on May 31, 1977 by Judge

Irving Hill of the United States

District Court for the Central

District of California. The Findings

Of Fact and Conclusions Of Law, were

filed on May 27, 1977. Both documents

appear in the Appendix hereto. No

order or opinion issued by Judge Hill

in this case has ever been

reported officially.

JURISDICTION

This Petition For Writ Of

Certiorari is filed within ninety days

from April 14, 1980 the date of the

entry of judgment upon the Revised

Opinion of the Ninth Circuit Court of

Appeals. This Court's jurisdiction

is invoked under 28 U.S.C. §1254(1).

STATUTORY PROVISIONS INVOLVED

1. United States Code, Title 29, §185

(a) 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.

2. United States Code, Title 29,

§411 (a) (4)

No labor organization shall limit

the right of any member thereof to

institute an action in any court, or in

a proceeding before any administrative

agency, irrespective of whether or not

the labor organization or its officers

are named as defendants or respondents |

in such action or proceeding, or the

right of any member of a labor

Organization to appear as a witness in

any judicial, administrative, or

legislative proceeding, or to petition

any legislature or to communicate with

any legislator: Provided, That any

such member may be required to exhaust

reasonable hearing procedures (but not

to exceed a four-month lapse of time)

ee nnn ne ee ea

within such Organization, before

instituting legal or administrative

proceedings against such organizations

or any officer thereof: And provided

further, That no interested employer

Or employer association shall directly

or indirectly finance, encourage, or

participate in, except as a party, any

such action, proceeding, appearance,

Or petition.

3. United States Code, Title 28,

Federal Rules of Civil Procedure,

Rule 19

(a) Persons to be Joined if

Feasible. A person who is subject to

service of process and whose joinder

will not deprive the court of

jurisdiction over the subject matter

of the action shall be joined as a

party in the action if (1) in his

absence complete relief cannot be

accorded among those already parties,

Or (2) he claims an interest relating

to the subject of the action and is so

situated that the disposition of the

action in his absence may (i) as a

practical matter impair or impede his

ability to protect that interest or

(ii) leave any of the persons already

parties subject to a substantial risk

of incurring double, multiple, or

otherwise inconsistent obligations by

reason of his claimed interest. If he

has not been so joined, the court shall

order that he be made a party. If he

should join as a plaintiff but refuses

to do so, he may be made a defendant,

or, in a proper case, an involuntary

plaintiff. If the joined party

objects to venue and his joinder would

render the venue of the action

improper, he shall be dismissed from

the action,

(b) Determination by Court Whenever

Joinder not Feasible. If a person as

described in subdivision (a) (1)-(2)

hereof cannot be made a party, the

court shall determine whether’ in

equity and good conscience the action

should proceed among the _ parties

before it, or should be dismissed, the

absent person being thus regarded as

indispensable, The factors to be

considered by the court’ include:

first, to what extent a judgment

rendered in the person's absence might

be prejudicial to him or those already

parties; second, the extent to which,

by protective provisions in the

judgment, by the shaping of relief, or

other measures, the prejudice can be

lessened or avoided; third, whether a

judgment rendered in the person's

absence will be adequate; fourth,

whether the plaintiff will have an

adequate remedy if the action is

dismissed for nonjoinder.

STATEMENT OF THE CASE

This case arises from the

discharge of Clifford E. Clayton

("Employee") by his employer, ITT

Gilfillan ("Company"). The Employee

was represented by the International

Union, United Automobile, Aerospace

and Agricultural Implement Workers of

America, and its Local 509 (jointly

referred to herein as "Union") which

had a collective bargaining agreement

("Contract") with the Company. That

Contract contained a mandatory

grievance and arbitration procedure

and within the time limits allowed by

the Contract, the Union filed a

grievance on the Employee's behalf

contesting the discharge. After an

investigation and the pursuit of the

grievance through the third step of

the grievance procedure, the Union

withdrew the grievance. Under the

Contract such a decision, is final and

binding on the Union.

The Employee did not attempt to

exhaust the internal union remedies

available to challenge the Union's

refusal to pursue his’ grievance.

Instead, the Employee filed a lawsuit

alleging that the Union breached its

duty of fair representation and the

Company violated the contract when the

Employee was discharged.

After the first phase of a

trifurcated trial, the District Court

found that: (1) The Employee had

failed to exhaust his’ intraunion

remedies; (2) those intraunion

remedies provided a sufficient means

to redress his grievance; and, (3) the

Employee's failure to exhaust his

intraunion remedies could not. be

excused as futile. The Court held as a

matter of law that the Employee could

not maintain his suit against’ the

Union or the Company.

On appeal the Ninth Circuit Court

of Appeals affirmed the dismissal of

the Union. However, it reversed the

dismissal of the Company on the ground

that “if a claimant, by exhausting

internal union remedies, could not

obtain the same relief sought in a

civil action against an employer, the

employer may not raise the failure to

exhaust internal union remedies as a

defense." (Rev. Op. p.11-12)

REASONS FOR GRANTING THE WRIT

INTRODUCTION

This case raises a basic issue

which must be resolved by this Court in

order to give guidance to federal

courts in the application of the

numerous conflicting duty of fair

representation cases which arise from

the decision in Vaca v. Sipes, 386 U.S.

171 (1967). As is set forth below in

more detail, there are various

interpretations of a company's right

to rely upon the failure of a union

member to exhaust internal union

remedies. Not only are there

conflicting opinions between circuits,

but also conflicting Court of Appeals

opinions within the same circuit.

There are three principal

positions approved by various federal

courts:

1. The employee's failure

to exhaust internal union

procedures may never be raised as

a defense by the employer.

2. The employee's failure

to exhaust internal union

remedies is a defense for both

the union and the’ employer,

provided the remedies available

are adequate, and the pursuit of

those remedies is not futile.

3. The employee's failure

to exhaust internal union

remedies is a defense for the

employer only if the exhaustion

of those remedies could result in

the reinstatement of the

grievance,

The practical effect of the last

position is the same as the first in

most cases since few if any collective

bargaining agreements allow the

reinstatement of the grievance if an

internal union appellate procedure

finds the union breached its duty of

fair representation.

In addition to these’ three

principal positions, the Court of

Appeals in the Clayton case combined

positions two and three. The Court of

Appeals concluded that the internal

union remedy was adequate and freely

available to the Employee. As a result

the Union was dismissed as a defendant

because the Employee failed to exhaust

those remedies. However, the Company

was not dismissed because’ those

internal union remedies could not

result in the reinstatement of the

Employee's grievance. Thus the case

was remanded to the district court

with instructions to hold a trial upon

the duty of fair representation issue

(without the Union) and if the

district court were to conclude a

breach occurred, to proceed to a trial

of the breach of contract issue.

It is the Company's’ position

that if the exhaustion of internal

union remedies is to be allowed as a

defense, it must benefit both the

Union and the Company, provided those

remedies are not inadequate or futile.

As the record below supports, and as

found in many federal court decisions,

the Union's internal remedies. are

among the best of any union in the

United States. In Winter v. Local 639,

569 F.2d 146 (D.C. Car. 1977) the

Court stated:

"The UAW, significantly, has what is

probably the most elaborate and

comprehensive system of internal

appeals of any American union,

culminating in an appeal to a non-

partisan panel composed of eminent

persons with no connection to the

Auto Workers. The UAW procedures,

virtually unique among unions, may

well enable a worker to get redress

‘without prejudice to his rights'."

569 F.2d at 151 n.26.

To adopt the position that the

failure to exhaust internal union

remedies may bar an employee's claim

against his union, but not his claim

against his employer, places an

inequitable burden on the employer,

and may result in the employee

prevailing on the duty of _ § fair

representation (hereinafter sometimes

"DFR") issue by default since the

union is not a party.

If this defense is not equally

available to both the Company and the

Union, it should be available to

neither, TO conclude otherwise

results in the Company defending the

DFR issue because the Union is no

longer a party. The imposition of such

a responsibility upon the Company is

neither fair nor justifiable, It is

the Union which is in possession of the

facts necessary to defend against the

DFR issue. The facts as to the reasons

for the Union's decision not to pursue

the grievance are not within the

knowledge of Company witnesses. Once

the Union is dismissed from. the

lawsuit its officers and members do

not have any incentive to cooperate

with the Company. The Union has no

further exposure to liability. In

fact there is the possibility of

collusion since a finding that the

Union breached its DFR would assist

the member in pursuing his’ case

against the Company and there would be

no liability for the Union.

In addition it is the Company's

position that the attempt to try the

DFR issue without the Union would

constitute the failure to join an

indispensable party, and would result

in material prejudice to the Company

(See Argument infra, at p. 47).

As the arguments below. set

forth, this Court should grant

certiorari and reverse the opinion

below. That decision must treat the

Company and the Union in a like manner.

If.

A SERIOUS CONFLICT EXISTS AMONG

FEDERAL COURT DECISIONS

A. The Nonexhaustion Of

Intraunion Remedies Defense Is

Available To The Employer Only If

Those Remedies Permit Reinstatement

Of the Grievance

The Clayton Revised Opinion

concluded that the internal union

remedies were "insufficient" since

they could not lead to the

reinstatement of Clayton's grievance.

(Rev.Op.p.22). However this internal

union procedure which the court found

to be "insufficient" as a defense for

the Company, was found to be a "fair

and adequate” procedure as a defense

for the Union. (Rev.Op.p.8).

Similar holdings appear to have

been adopted in the Seventh and Tenth

Circuits.

In Harrison v. Chrysler Corp.,

558 F.2d 1273 (7th Cir. 1977), the

Seventh Circuit ruled that the

employee's exhaustion of intraunion

remedies was a legitimate concern of

the employer only when such remedies

could result in a reinstatement of the

= tae o

Pre

grievance. "To raise this defense ...

the employer must establish that an

intraunion appeal could result’ in

reversal of the union's refusal to

press the grievance and that the

grievance could. be reinstated in

accordance with the provisions of the

collective bargaining agreement." 558

F.2d at 1279. The Seventh Circuit

reaffirmed its Harrison ruling in

Baldini v. Local Union No. 1095, 581

F.2d 145 (7th Cir. 1978), where it

found that the nonexhaustion = of

intraunion remedies defense is

inapplicable to the employer where

"the union no longer had the power to

revive the grievance procedure." 581

F.2d at 150.

In Vara _v. Dillon Companies,

Inc., 615 F.2d 1315 (10th Cir. 1980),

the Tenth Circuit allowed the employer

to assert the exhaustion defense only

because it found that the intraunion

remedies in that case could have led to

reinstatement of the grievance.

However, as in other circuits, there

appears to be a split of authority.

(See the discussion of the _ Tenth

Circuit decision in Fizer v. Safeway

Stores, Inc., 586 F.2d 182 (10th Cir.

1978), infra, p. 35.)

B. The Employer Can Rely Upon

The Nonexhaustion Defense Unless The

Plaintiff Has A Proper Excuse For Non-

exhaustion

Federal courts in the First,

Third, Sixth, and Eighth Circuits have

issued decisions permitting an

employer to rely upon the

none xhaustion defense unless the

plaintiff can prove that the

intraunion procedures were inadequate

or it would have been futile to pursue

them.

One of the recent cases rejecting

the rule adopted by the Ninth Circuit

is the case of Rainey v. Missouri

Utilities Co., 596 F.2d 310 (8th Cir.

1979). In that case the court con-

cluded that the International

Brotherhood of Electrical Workers

provided an adequate internal union

remedy and that the plaintiff had no

excuse for his failure to exhaust that

remedy. As a result the Eighth Circuit

affirmed the district court's decision

dismissing the union and the employer.

Subsequent to the Rainey

decision, a district court in the

Eighth Circuit (Neiger v. Sheet Metal

Workers Int'l., 470 F.Supp.622 (W.D.

Mo. 1979), stated as follows:

"The Eighth Circuit rule on failure

to exhaust internal union remedies

is clear. . - That rule was

recently reaffirmed by the Eighth

Circuit in Rainey v. Missouri

Utilities Co. etc., 596 F.2d 310

(1979), where the Court of Appeals

held that summary judgment in favor

of both the union and the employer is

required when a plaintiff in a suit

of this kind has failed to exhaust

all of the union's available

internal remedies, and has failed to

show any reason for his failure to do

so." 470 F. Supp. at 629 (Emphasis

added).

A similar rule has been adopted

by most federal courts in the Third

Circuit. In Aldridge v. Ludwig-Honold

Mfg. Co., 385 F.Supp. 695 (E.D.

Pa. 1974) aff'd mem., 517 F.2d 1397

(3rd. Cir.), cert. denied, 423 U.S.

937 (1975), the plaintiff's failure to

exhaust internal union remedies barred

his claim against the union and the

employer. A subsequent case which

cited Aldridge, supra, and reached the

same conclusion, is Kobielnik v.

International Brotherhood of Teamsters,

etc., 470 F.Supp. 125 (E.D. Pa. 1979).

In explaining that decision the court

stated:

"Furthermore, had plaintiff exha-

usted his internal union remedies,

it might have been shown that the

Union did not breach its duty to

plaintiff. Under these circumstances

the direct action, permitted by Vaca

¥. Sipes, supra, against the

employer (Eastern) would not lie.

Neipert v. Arthur G. McKee & Co.,

448 F.Supp. 206 (E.D.Pa. 1978).

Because plaintiff has challenged

neither the availability nor the

aveeiacy of the internal union

remedies provided by the’ Union

constitution and has not explained

satisfactorily his failure to

utilize them, the mot ion of

defendants Eastern, the Union and

Local 107 will be granted." 470

F.Supp. at 128.

In Pawlak v. International Brother-

hood of Teamsters, etc., 444 F. Supp.

807 (M.D. Pa. 1977), aff'd. mem. 571

F.2d 572 (3rd Cir. 1978), the court

dismissed the action against’ the

employer on the same ground of failure

to exhaust internal union procedures

as it used to dismiss the action

against the union.

In Neipert v. Arthur G. McKee &

Co., 448 F.Supp. 206 (E.D. Pa. 1978),

the court noted that the "Eastern

Michigan rationale applies: had

plaintiff exhausted his [union]

remedies, it might have been’ shown

that the [union] Council did not

breach its duty to plaintiff, in which

case the direct action against the

employer, permitted by Vaca v. Sipes

[citation] when the union is shown to

have breached its duty of fair

representation, would not lie." 448

F.Supp. at 210.

In Gerb v. Boeing Company, 102

LRRM 2854 (E.D. Pa. 1979), which

relied upon Pawlak, supra, among other

cases, the court found that cases in

the Third Circuit have held that

iii:

failure to exhaust internal union

remedies not only bars the claim

against the union but also the claim

against the employer. Other Third

Circuit cases in agreement with this

characterization of the nonexhaustion

defense are: Dezura v. Firestone Tire

& Rubber Company, 470 F. Supp. 121

(E.D. Pa. 1979), aff'd. mem. 612 F.2d

571 (3rd Cir. 1979); and Rehm vy.

Quaker Oats Co., 478 F. Supp. 619

(M.D. Pa. 1979).

The Sixth Circuit has issued con-

flicting decisions on the effect of

the plaintiff's failure to exhaust

internal union remedies. In Willetts

v. Ford Motor Co., 583 F.2d 852 (6th

Cir. 1978), that Court of Appeals was

faced with a situation very similar to

that faced by the Ninth Circuit in the

Clayton case. The plaintiff in that

case was discharged and the union

withdrew the grievance filed on his

behalf after the second step of the

grievance procedure. Without attempt-

ing to exhaust internal union remedies

the plaintiff sued his union and the

employer. The Sixth Circuit in affirm-

ing the district court's decision to

dismiss plaintiff's claim against both

the union and the employer because of

the plaintiff's failure to exhaust

internal union remedies, stated:

"'The reason for this requirement

is that intra-union remedies are

part and parcel of the industrial

in-house procedure for’ settling

labor disputes. The primary benefit

of requiring initial submission of

employee complaints against a union

that refuses to help process a

grievance against a company is that

internal machinery can settle diffi-

culties short of court’ action.

Thus, federal policy requires "stay-

ing the hand of ‘judicial interfer-

ence with the internal affairs of a

labor organization until it has had

at least some opportunity to resolve

disputes concerning its own internal

affairs.‘'"'" 583 F.2d at

855-856 [citation omitted].

Finding that the plaintiff was

responsible for the inability to

invoke this process, the court

dismissed all claims against the union

and the employer.

In contrast, the Sixth Circuit in

a subsequent case, Geddes v. Chrysler

Corp., 608 F.2d 261 (6th Cir. 1979),

without overruling Willetts, supra,

concluded that the failure to exhaust

defense was a contractual defense only

available to the union and that the

employer has no right to raise that

defense.

The Willetts case was expressly

followed by the district court in

Sherba v. Teamsters, Local 400, 101

LRRM 2582 (N.D. Ohio 1979), when it

dismissed the plaintiff's claims

against both the union and the

employer for plaintiff's failure to

exhaust intraunion remedies.

A district court in the First

Circuit, Provencal Vv. Allegheny

Airlines, Inc., 383 F. Supp. 159 (D.

Rhode Island 1974), stated that a

union member "must exhaust his

intra-union remedies in the absence of

a showing that it would be futile to do

so or that said remedies are

inadequate." 383 F. Supp. 161-162.

Because the plaintiff had not

satisfied this rule, the court

dismissed the plaintiff's claim

against the union and his employer.

Se The Employer Is Unable To Raise

The Nonexhaustion Defense

Several federal courts have ruled

contrary to all the decisions

discussed above and have precluded an

employer from ever raising this non-

exhaustion defense,

Though the Fifth Circuit Court of

Appeals has never issued a decision on

this question, a district court within

that Circuit in Wade vy. Southern

Pacific Co., 243 F.Supp. 307 (S.D.

Tex. 1965), Supra, declared the non-

exhaustion defense was available to

the employer subject to the defenses

of futility and inadequacy. Two more

recent district courts in that

Circuit, however, have ruled that the

nonexhaustion defense is unavailable

to the employer. In Anderson vy.

Grocers Supply Co., Inc., 483 F.Supp.

73 (S.D.Texas 1979), and Pierce v. Fox

Manufacturing Co., 97 LRRM 2321 (N. D.

Ga. 1977), the district courts

concluded that the nonexhaustion

defense is a contractual defense which

is only available to the union. As

noted previously the Sixth Circuit in

Geddes v. Chrysler Corp., supra, took

a position diametrically opposed to

its earlier decision in Willetts v.

Ford Motor Co., supra. In Geddes the

court relied on the contract theory

and denied the employer any benefit

from the nonexhaustion defense.

The Eighth Circuit Court of

Appeals in Rainey, supra, found that

summary judgment can be granted an

employer because of the plaintiff's

failure to exhaust his’ intraunion

remedies. The court in Rainey,

however, neglected to distinguish, or

Overrule its earlier decision in

Petersen v. Rath Packing Co., 461 F.2d

312 (8th Cir. 1972). In Petersen the

Court declared: "The question of

exhaustion of internal Union proce-

dures is the Union's concern, not the

Company's." 461 F.2d at 315.

A district court, relying on

Petersen, has stated flatly that the

nonexhaustion of intraunion remedies

defense is not available to a defen-

dant employer. Miller v. Local 50, 468

F. Supp. 193, 198 (D. Neb. 1979).

In Vara, supra, the Tenth Circuit

Court of Appeals recognized the non-

exhaustion defense as one available to

an employer. However, the Court of

Appeals failed in its opinion to

recognize the conflict with Fizer

v. Safeway Stores, Inc., supra. The

Fizer opinion states that the non-

exhaustion defense cannot be raised by

an employer who is not a party to the

contract between the union and its

members. The Vara court clearly was

aware of the Fizer opinion because it

distinguished Fizer on another point.

In Winter v. Local Union No. 639,

569 F.2d 146 (D.C. Cir. 1977), the

District of Columbia Circuit Court of

Appeals concluded that the non-

exhaustion defense is available only

to a defendant union and not a defen-

dant employer, except for "special

circumstances",

D. Conclusion

As is obvious from the discussion

above, federal courts in confronting

the question whether a defendant

employer may assert as a defense the

plaintiff's failure to exhaust avail-

able intraunion procedures have

arrived at three different answers.

One line of decisions, including the

Ninth Circuit's Clayton Revised

Opinion, allows an employer to raise

the defense only if the intraunion

remedies could have led to reinstate-

ment of the grievance. Other court

decisions permit an employer's use of

the defense except when the union

remedies would have been inadequate or

futile. Other decisions hold the

defense is never available to an

employer.

This disarray of decisions on the

Same issue creates a serious conflict

among the different Circuit Courts of

Appeals. The conflict in fact is so

serious that it even has resulted in

conflicting decisions by courts within

the same Circuit. This situation

requires a clarification from the

Court. A decision by this Court is

required in order to create a uniform

law throughout the Circuits. As a

result of the present status of the

law, a plaintiff with identical facts

has a valid claim against his employer

in one of several circuits but no valid

Claim in a number of other circuits.

III.

THE UNION IS A NECESSARY

PARTY WHEN LITIGATION

CONCERNS A BREACH OF

THE UNION'S DUTY

OF FAIR REPRESENTATION

A. Breach Of The Union's Duty Of

Fair Representation Is A _ Threshold

Issue

Although the employer is not a

necessary party to an action by an

employee against his union for breach

of the duty of fair representation

(Kaiser v. Local No. 83, 577 F.2d 642

(9th Cir. 1978)), the same is not true

when an employee attempts to sue his

employer for breach of the collective

bargaining agreement. The plaintiff

may not sue his employer in such a case

unless he can first establish that the

union has breached its duty of fair

representation under the standard set

forth in Vaca v. Sipes, supra, and

subsequent cases. Proof of the breach

of the duty of fair representation is a

threshold finding that must be made

before the issue of whether or not the

collective bargaining agreement was

breached. Such a finding may be made

in a separate civil suit against the

union, prior to the suit against the

employer, or it may be made in the same

action where the employer is a

defendant, so long as such a finding is

made before the court reaches’ the

breach of contract issue. In

determining whether or not a breach of

the duty of fair representation

occurred, the union is- not only a

necessary party, but an_ essential

party. If the case against the union

is dismissed because the plaintiff

failed to exhaust his remedies against

the union, then the plaintiff's suit

must also be dismissed against his

employer because the union is no

longer a party.

1. The Union As_An_ Indispensable

Party Because Of The Duty Of Fair

Representation Issue

The opinion in Bradley v. Ford

Motor Co., 417 F.Supp. 23 (N.D. Ill.

1975), addresses the question of

whether a union is a necessary party,

pursuant to Rule 19 of the Federal

Rules of Civil Procedure, in a suit

against the employer when the union's

performance of its duty of fair

representation is a question. The

court in Bradley stated:

"The plaintiff seeks reinstatement

to his employment and_e seniority

rights, and this remedy would affect

the status of other members of the

union who are employees of the

defendant company. Therefore it

seems to us that this case could not

proceed without the presence of the

union, because the requirements of

F.R.C.P. 19 (b) would not have been

satisfied ." 417 F.Supp. at 25.

Although in the case of Smart v.

Ellis Trucking Co., Inc., 580 F.2d 215

(6th Cir. 1978), the Sixth Circuit

allowed a breach of the duty of fair

—_—

representation issue to be decided

after dismissing the union, the court

did not cite Bradley nor determine if

the union was an indispensable party.

In fact the question of whether the

union was an indispensable party under

Rule 19(b) was neither’ raised nor

discussed in the court's opinion.

Other district court decisions in

this area provide further guidance.

In Johnson v. Colts, Inc., 306 F.Supp.

1076 (D. Conn. 1969), when the

plaintiff sued his former employer for

wrongful discharge the employer moved

for dismissal on the ground that the

plaintiff had failed to join the

related unions as indispensable

parties. The district court denied

the motion but ordered that the unions

be joined as defendants.

"The primary purpose of joining them

as parties is to aid in the Court's

interpretation of the collective

bargaining agreement [to determine

whether the plaintiff was required

to use the grievance procedure

mechanism]." 306 F.Supp. at 1079.

In Kinnunnen v. American Motors

Corp., 56 F.R.D. 102 (E.D. Wis. 1972),

the plaintiff brought a §301l suit

solely against the employer. The

court granted the defendant employer's

motion to join the union as a necessary

party. The court determined that

joinder was mandated in part because

"it would be inappropriate for this

court to make either determination

[that the grievance procedures had

been exhausted or that the union had

breached its duty of fair

representation] without the presence

of the unions." 56 F.R.D. at 103.

In Atwood v. Pacific Maritime

Ass'n, 432 F.Supp. 491 (D. Ore. 1977),

the plaintiffs contended the union was

not responsible for any damage and

therefore moved to dismiss the unions

from the §301 suit. The "most

important [reason for denying the

motion was that]...it is simply unfair

to expect the Employers to litigate

and defend the Union against

plaintiffs' claim of unfair represen-

tation." 432 F. Supp. at 495. The

court further explained that the union

had the best access to evidence

bearing on the alleged breach of the

duty of fair representation. "While

the Employers certainly have an

interest in this issue and may

participate in its trial, they should

not be required to assume sole

responsibility" for it. Ibid. This

reason is even more significant in

Clayton, since the litigation already

had been proceeding for a substantial

period of time with the union as a

party. The court in Atwood also noted

that the defendant employers’ had

prepared their case relying on the

presence of the unions as defendants

and could seek joinder of the unions

pursuant to Rule 19 if they were

dismissed.

2. The Union As An Indispensable Party

Because Of The Relief Sought

The district court in Bradley

also concluded that the union was a

necessary party because the plaintiff

sought reinstatement, a form of relief

which if granted would affect the

rights of other union member

employees. The plaintiff in the case

before the bar, also has’ sought

reinstatement to his job with all

seniority rights which have accrued

since his termination,

A number of federal cases have

held that the union is an

indispensable party in a §301 suit

against an employer where the

requested relief, such as reinstate-

ment with the concomitant seniority

rights, could affect other’ union

members, See, e.g., Neal v. System

Board of Adjustment, 348 F.2d 722,

727-728 (8th Cir. 1965); Townsend v.

Exxon, 420 F. Supp. 189, 190 n.1l (D.

Mass. 1976); and, Kinnunen Vv.

American Motors Corp., supra, 56

F.R.D. at 103.

B. The Court Of Appeals Erroneously

Concluded That The Employer Would Not

Be Materially Prejudiced If The Union

Was Dismissed

This Court stated "the fact is that

the question of whether a union has

breached its duty of fair representa-

tion will in many cases be a critical

issue in a suit under LMRA_ §301

charging an employer with a

breach of contract." Vaca v. Sipes,

Supra, 386 U.S. at 183 (1967). Because

the duty of fair representation claim

is so critical in Clayton, the Ninth

Circuit Court of Appeals recognizes

that its decision will produce a true

anomaly.

“Where the employer raises the

affirmative defense of failure to

exhaust the contract's dispute

resolution machinery, and where the

employee has failed to exhaust

internal union procedures, the

employer will be required to defend

the union's representation of its

members. In an action from which the

union has been dismissed, ITT, to

prevail on its affirmative defense,

must defend the UAW's good faith in

declining to prosecute Clayton's

grievance." Rev. Op. p. 22-23.

As the district court in Atwood,

Supra, so aptly stated: "aas0 49

Simply unfair to expect the Employers

to litigate and defend the Union

against plaintiffs' claim of unfair

representation. The Union has best

access to the appropriate witnesses

and evidence and should defend its own

position." 432 F.Supp. at 495.

The Ninth Circuit Court of

Appeals in its Revised Opinion

recognizes, as dictated by Vaca vy.

Sipes, the necessity of apportioning

damages between the unions and the

employer if the duty of fair

representation were breached. The

Court of Appeals assumes, however, in

reaching its decision to dismiss the

Union, and not the Company, that the

Union will fully cooperate with the

Company, in defending against a claim

on which the Union can no longer be

held liable.

This implicit assumption exposes

a certain degree of naivete about the

Union's real interests. Since the

Union can no longer bear any

liability, proof that it breached the

duty would simply assist a_ union

member's interest in achieving victory

on a wrongful discharge claim against

an employer.

The Clayton decision in fact

encourages collusion in the future

between a union and an employee. By

colluding, these two parties could

circumvent the collective bargaining

agreement's grievance and arbitration

procedures. Once the Union refuses to

pursue a grievance, the employee could

purposefully neglect to use the intra-

union remedies, The employee then

could sue the employer alone and with

the union's cooperation prove the

union had breached its duty of fair

representation. Thereafter, the

employee would be free to pursue his

original grievance against the

employer in court without ever having

had to attempt any alternative

administrative procedures and without

the union being exposed to = any

liability.

To avoid such collusion and the

resultant flood into federal courts of

labor cases which have not passed

through the relevant administrative

procedures, the Clayton Revised

Opinion should be reversed, The

Company should be dismissed on the

ground that the Employee did not

exhaust his intraunion remedies or

because of the absence of an

indispensable party.

IV.

PLAINTIFF'S FAILURE TO EXHAUST

HIS INTRAUNION REMEDIES PREVENTS

ANY FINDING THAT THERE HAS

BEEN A BREACH OF THE

DUTY OF FAIR REPRESENTATION

A. The Nonexhaustion Issue

Goes To The Merits Of the Duty

Of Fair Representation Claim

The nonexhaustion of intraunion

remedies forecloses a finding that the

union breached its duty because the

DFR can not be breached until the union

has had an opportunity to review the

claim through its internal procedures.

The only exceptions to this principle

are when the member can show an inade-

quate remedy or that it would be futile

to pursue that procedure,

As stated in Brookins v.

Chrysler Corp., 381 F. Supp. 563 (E.D.

Mich. 1974):

"If the union's wrongful refusal [to

pursue the grievance’ procedures]

were reversed [during the intraunion

remedies] without prejudice to his

rights, the employee would no longer

have a cause of action for breach of

the duty of fair representation, and

consequently would have no right

under Vaca to sue his employer for

breach of contract." 381 F.Supp. at

569.

Accordingly, the employee on sub-

stantive grounds is precluded from

suing for breach of the duty of fair

representation. When the employee

fails to use the intraunion remedies,

he eliminates the union's only

Opportunity to review its conduct.

The consequence of this fact is that

the employee does not have a claim

against his employer because he can

not establish that a breach of the DFR

occurred. As so succinctly stated by

the Brookins court, when proof of a

breach of the DFR is an impossibility,

the employee also is precluded from

suing the employer under vaca vy.

Sipes. Other courts have agreed with

this conclusion. E.g., Fleming vy.

Chrysler Corp., 416 F.Supp. 1258 (E.D.

Mich. 1975), aff'd. 575 F.2d 1187 (6th

Cir. 1978), and Aldridge v. Ludwig -

Honold Manufacturing, supra.

B. The Intraunion Remedies Available

To Plaintiff Are Sufficient To Redress

Any Alleged Wrongs

The fact that the Employee could

only obtain monetary damages through

the internal union procedure was the

primary reason the Ninth Circuit

reversed the dismissal of the Company.

"{[O]Jnce the union withdrew its

petition for a hearing on his

grievance, Clayton lost any

opportunity he might have had for

reinstatement through the

contractual grievance process....

[The union's internal appellate

procedures] could neither reinstate

Clayton nor reinstate his petition

and prosecute his grievance action."

Rev. Op. p. 21-22.

The Court of Appeals, by conclud-

ing that the intraunion remedies were

insufficient, assumes that any remedy

other than reinstatement to the

employment position in a _ wrongful

discharge case would not be suffi-

cient. However, in De Arroyo vy.

Sindicato de Trabajadores Packing, 425

F.2d 281 (lst Cir. 1970) the First

Circuit Court of Appeals made the fol-

lowing statement:

"Reinstatement still may not be

the appropriate form of prospective

relief in this case, however, for it

may be that the six year delay since

discharge has made reinstatement

impractical.... If such impracti-

cality exists, we can see no reason

why an award for future lost

earnings would not be in order...."

425 F.2d at 292.

In the case at bar there was a delay of

more than five years between the time

the Employee was terminated and the

date of the Revised Opinion by the

Ninth Circuit Court of Appeals.

Prospective monetary damages

cannot be rejected as an alternative

to reinstatement merely because they

may be difficult to quantify.

Thompson _v. Brotherhood of Sleeping

Car Porters, 367 F.2d 489, 493 (4th

Cir. 1966) citing John Wiley & Sons,

tne. Ws Livingston, 376 U.S. 543

(1964) and Textile Workers Union of

America v. Lincoln Mills, 353 U.S. 448

(1956). The Ninth Circuit Court of

Appeals totally ignored the avail-

ability of prospective monetary

damages in concluding that the intra-

union remedies were not sufficient as

to the Company. Prospective monetary

damages are recognized as a viable

alternative to reinstatement as a form

of relief in a §301 suit. E.g., Soto

Segarra v. Sea-Land Service, Inc.,

581 F. 2d 291, 297 (lst Cir. 1978);

Richardson v. Communications Workers

of America, 443 F.2d 974, 985 (8th Cir.

1971); and, Bowen v. United States

Postal Service, 470 F.Supp. 1127, 1131

(W. D. Va. 1979).

Since prospective monetary

damages are an acceptable alternative

to reinstatement, the Ninth Circuit

Court of Appeals was incorrect in

ruling that the intraunion remedies

were not sufficient to bar’ the

Employee's claim against the Company.

THE COURT OF APPEALS ERRED IN FINDING

THAT THE INTRAUNION REMEDIES ARE

ADEQUATE AS TO THE UNION

Assuming the foregoing arguments

are not accepted, the Company

maintains that the Court of Appeals

erred in finding that the nonexhaus-

tion defense justified dismissal of

the Union. Such dism’ssal was

erroneous because the available intra-

union remedies were not sufficient to

redress the plaintiff's complaint.

Since the breach of the duty of

fair representation occurs when a

union " arbitrarily, discriminatorily

Or in bad faith" refuses to take the

employee's grievance to arbitration

(and, as the Company contends, refuses

to change its decision in the course of

the employee's appeal via intraunion

remedies), the only appropriate remedy

to make the employee whole would be

reinstatement of his grievance. As

the Ninth Circuit Court of Appeals has

pointed out, this remedy can not be

granted through the internal union

appellate procedures on the facts of

Clayton. Reinstatement of a grievance

can only occur if permitted by the

terms of the relevant collective

bargaining agreement. See, e.g.,

Harrison, supra. Accordingly, the

Union could not have given’ the

Employee adequate relief via the

intraunion remedies.

The Ninth Circuit Court. of

Appeals itself has declared that in

order to invoke the nonexhaustion

defense "the union must’ show that

there was a procedure available to the

members within the union structure

reasonably calculated to redress the

particular grievance complained of."

Fruit and Vegetable Packers and Ware-

housemen Local 760 v. Morley, 378 F.2d

738, 745 (9th Cir. 1967) [Emphasis

added]. The intraunion procedures

available in Clayton did not allow for

reinstatement of the grievance which

was the ultimate relief sought by the

employee.

Those cases which have found the

UAW's intraunion procedures to be

sufficient and fair in treating an

employee's grievance against the union

are not determinative here. The

Company asserts that the pertinent

question is whether the _ intraunion

remedies can reinstate the grievance,

which could result in reinstatement to

employment. Equity requires that the

intraunion remedies be deemed insuffi-

cient as to the union unless

reinstatement of the grievance at

issue is possible.

CONCLUSION

For all the foregoing reasons, a

Writ of Certiorari should issue to

review the Judgment and the Revised

Opinion of the Court of Appeals in this

case.

Dated: July 9, 1980

Respectfully submitted,

Everett F. hte

Dean A. Robbins

Parker, Milliken,

Clark & O'Hara

333 South Hope Street

27th Floor

Los Angeles,

California 90071

Attorneys for

Petitioner

APPENDIX

FILED

April 14, 1980 Richard H. Deane

Clerk, U.S. Court of Appeals

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ITT GILFILLAN, etc.,

et al.,

Appellee.

CLIFFORD E. CLAYTON, ) NO.77-2756

)

Appellee, )

)

Vv. )

)

ITT GILFILLAN, )

etc., et al., )

)

Appellant. )

CLIFFORD E. CLAYTON, ) NO.77-2763

)

Appellant, ) REVISED

) OPINION

)

Appeal from the United States District

Court for the Central District of

California Irving Hill, Chief Judge,

Presiding Argued and submitted April 4,

1979 Opinion filed September 4, 1979

Before: GOODWIN and KENNEDY, Cir-

cuit Judges, and TAYLOR*, District

Judge

GOODWIN, Circuit Judge:

Clayton, a discharged employee,

appeals from a district court judgment

dismissing his action against ITT-Gil-

fillan for wrongful discharge under

section 301 of the Labor Management

Relations Act (29 U.S.C. § 185) and

-~_,

*The Honorable Fred M. Taylor, United

States District Judge for the District

of Idaho, sitting by designation.

against his union for breach of its

duty to represent him. We affirm the

dismissal in favor of the union, but

reverse the judgment in favor of the

employer.

For alleged misconduct not mate-

rial here, ITT fired Clayton in Febru-

ary 1975. As a member of the United

Auto Workers (UAW) , Clayton was

entitled under a collective bargaining

agreement to seek reinstatement. He

took the first step under the con-

tract, a formal request for reinstate-

ment, but the company denied his re-

quest. Clayton's local union then

filed a timely grievance, but again

the company refused to reinstate him.

The union representative next made

timely demand under the terms of the

collective bargaining agreement for

arbitration of the grievance. For

reasons not stated in the record, how-

ever, the union eventually withdrew

the request for arbitration.

Clayton was notified of the

local official's decision not to press

for arbitration. Under Article 33 of

the union constitution, a member who

is not satisfied with the handling of

his grievance may appeal to. the

local's delegate body or general mem-

bership meeting. Appeal from either

group's decision may next be taken to

the International Executive Board.

The unsatisfied member may then appeal

the Board's decision to the Constitu-

tional Convention Appeals Committee,

Or in some cases to the Public Review

Board (PRB) established in Article 32

of the union's constitution.

Article 33, section 12, of the

union constitution requires any member

who feels aggrieved by any action of

the local to exhaust his constitu-

tional remedy before appealing to a

civil court or governmental agency for

redress.

Clayton admits that he did not

exhaust his union remedies. He did not

appeal the union official's decision

not to proceed to arbitration even to

the first appellate level provided in

Article 33. Instead, he brought this

action in federal district court sev-

eral months later.

Both the union and ITY asserted

as affirmative defenses Clayton's

failure to exhaust his union remedies

under Fed. R. Civ. P. 42. The court

found that (1) Clayton had failed to

exhaust his remedies, (2) the remedies

available to Clayton through the union

appeals process were adequate to re-

dress his grievance, and (3) exhaus-

tion of internal remedies could not be

excused as futile. As a matter of law,

therefore, the district court held

that Clayton could not maintain an ac-

tion against either defendant.

Be The union's exhaustion de-

fense. The exhaustion of internal

remedies as a condition of maintaining

an action against the union is a matter

of judicial discretion. Buzzard v.

Local Lodge 1040, 480 F.2d 35, 41 (9th

Cis, 1973); Keeffe Brothers Vv.

Teamsters Local No. 592, 562 F.2d 298,

302-03 (4th Cir. 1977) (citing cases).

Relying principally on Buzzard _ and

Newgent v. Modine Manufacturing Co.,

495 F.20d 919 (7th Cir. 1974), the

district court held that Clayton's

failure to exhaust his union remedies

as required by the union constitution

prevented him from suing the union. We

agree.

There is no question that Arti-

cle 32, section 12, of the union con-

stitution made exhaustion mandatory

here. Exhaustion is excused only if

the remedies available are inadequate

Or if resort to the internal proce-

dures would be futile. Buzzard v.

Local Lodge 1040, supra, 480 F.2d at

41; Baldini v. Local No. 1095, 581

F.2d 145, 149 (7th Cir. 1978).

Clayton contends that the inter-

nal appeals process was inadequate be-

cause the union could not reinstate

him to his job. The union could "only"

award him money for any wrong it had

caused, he complains.

Many courts examining the same

internal remedies as those provided to

Clayton have found them fair and ade-

quate. See Baldini v. Local No. 1095,

581 F.2d at 149 (citing cases). In

Baldini, the Seventh Circuit upheld

the UAW procedures against an objec-

tion identical to that raised by Clay-

ton. The ability to award only money

damages does not make the process in-

adequate; relief against the union in

the civil action Clayton now brings

would give him no more. A primary rea-

son for requiring exhaustion is to

forestall unnecessary interference

with union affairs. Brady v. Trans

World Airlines, Inc., 401 F.2d 87, 104

(38 Cit. 1968), cert. denied, 393

U.S. 1048 (1969). It follows that ex-

haustion makes especially good sense

when the courts can give no different

relief than that provided by the

union.

More important in this case is

the aid that exhaustion would have

furnished the courts in deciding Clay-

ton's claim against the union.

"A primary reason for the exist-

ence of the exhaustion doctrine is

that prior union action interpreting

union rules and perhaps also further

refining and defining the problem may

well assist the court when it is later

called upon to resolve the contro-

versy." Buzzard v. Local Lodge 1040,

480 F.2d at 4l.

The UAW's liability (if any) for

breach of its duty of fair representa-

tion would depend on the reasons for

the union's withdrawal of the arbitra-

tion request. There is little in the

record to indicate why the local offi-

cial changed his mind and withdrew the

arbitration request. But the missing

motive is precisely the sort of infor-

mation that an appellate body within

the union would have elicited, com-

piling a record that would greatly

assist the court now. >

For all these reasons, the dis-

trict court acted well within its dis-

cretion when it dismissed Clayton's

Claim against the union for failure to

exhaust. Clayton failed to give his

union the opportunity to reverse

itself. He cannot obtain by judgment

now what he would not allow the union

an opportunity to afford him under its

constitution.

Ye Claim against the employer.

We next consider whether, as the

district court held, Clayton's failure

to exhaust internal union remedies

barred his action against his employer

for wrongful discharge. fThis circuit

has discussed the validity of the em-

ployer's asserted exhaustion defense

in dictum, but it has never directly

4 We now find that

decided the issue.

if a claimant, by exhausting internal

union remedies, could not obtain the

same relief sought in a civil action

against an employer, the employer may

not raise the failure to exhaust in-

ternal remedies as a defense.

While exhaustion of union rem-

edies is not a condition precedent to

maintaining an action against an em-

ployer, the employer is protected to a

substantial degree by the exclusivity

of the collective bargaining agree-

ment's arbitration remedy. Exhaustion

of the remedies provided in the agree-

ment is required prior to a breach-of-

contract action when those remedies

are exclusive. Vaca v. Sipes, 386 U.S.

171, 184 (1967).> Remedies are pre-

sumed to be exclusive where, as here,

the parties to the agreement do not ex-

pressly provide that the grievance and

arbitration procedures are not the ex-

clusive remedy. Republic Steel Corp.

v. Maddox, 379 U.S. 650, 657-58

(1965).

The requirement of exhaustion of

collective bargaining remedies’ may

thus bar an employee's action against

an employer. Otero v. Electrical,

Radio and Machine Workers, 474 F.2d 3

(9th Cir. 1973). It is typically the

employee's union, however, and not the

employee himself that controls initia-

tion of arbitration or other remedies.

Therefore, an exception to the exhaus-

tion doctrine is recognized. Where,

as here, the union has scle power to

invoke arbitration, the employee can

obtain judicial relief for breach of

the employment contract only if he

first shows that the union wrongfully

refused to seek arbitration. Vaca v.

Sipes, 386 U.S. at 185. See also

Hines _v. Anchor Motor Freight, Tae. »

424 U.S. 554 (1976); Motor Coach En-

ployees v. Lockridge, 403 U.S. 274

(1971); Beriault v. Local 40, 501 F.2d

258 (9th Cir. 1974). To be wrongful,

however, the failure must be "“arbi-

trary, discriminatory, or in bad

faith." Vaca v. Sipes, 386 U.S. at

190.

The instant case differs from

Vaca and Hines, the leading cases in

this area. The employee's failure to

exhaust against the union was not an

issue in those cases, In both, the

discharged employee faced no exhaus-

tion barrier to union liability for

failure to represent him. Here, ITT

contends that Clayton's failure to

exhaust his intraunion remedies pre-

cluded a showing that the UAW's

failure to prosecute his grievance was

"wrongful," barring his action for

wrongful discharge.

It is initially useful, in de-

termining the applicability of an ex-

haustion defense in this context, to

distinguish two types of exhaustion

requirements and the policies under-

lying each. The first, discussed

above, requires union members to pur-

sue all remedies under a union's con-

stitution and bylaws before bringing

actions against the union. As noted,

this exhaustion requirement prevents

unnecessary judicial interference in

union disputes and conserves judicial

resources.

The second type of exhaustion

requirement compels unions or indi-

vidual employees to follow all grie-

vance procedures under a collective

bargaining agreement before resorting

to judicial remedies against employ-

ers. Exhaustion under the collective

bargaining agreement prevents parties

to the agreement from "“short-circuit-

ing" an agreed upon grievance proce-

dure by resort to the courts. This is

consistent with the policy preference,

declared in section 203 of the Taft-

Hartley Act, that, if at all possible,

labor disputes should be resolved

within the framework of procedures

approved under collective bargaining,

rather than in the courts. 29 U.S.C.

§ 173(d). This primary commitment to

private dispute resolution has been

emphasized in a series of landmark

Supreme Court labor decisions. See,

e.g., Hines v. Anchor Motor Freight,

Inc., supra; Vaca v. Sipes, supra;

Republic Steel Corp. v. Maddox,

Supra.

There are good reasons, then,

for requiring union members to exhaust

procedures under union constitutions

or bylaws before bringing actions

against unions and for compeliing em-

ployees to fully pursue collective

bargaining remedies before bringing

judicial action against employers.

But are there good reasons for trans-

ferring the intraunion exhaustion re-

quirement from the union member versus

union context to cases in which

employees sue employers for wrongful

discharge?

In support of this extension,

ITT argues that if an employee does not

exhaust internal remedies, he or she

is estopped from showing that the

union acted "wrongfully," as is re-

quired by Vaca and Hines. The company

Claims that if Clayton had pursued his

internal remedies after the union had

declined to process his grievance, the

UAW might have reversed itself and the

Vaca-Hines union "wrongfulness" stan-

dard would not have been satisfied.

This argument was most cogently

described in Brookins v. Chrysler

Corp., 381 F.Supp. 563, 568-69 (E.D.

Mich. 1974):

"By exhausting his internal rem-

edies the employee may be able to

eliminate the very wrong of which he

complains, not merely obtain a remedy

therefor in another forum. If the

union's wrongful refusal to continue

the grievance were reversed without

prejudice to his rights, the employee

would no longer have a cause of action

for breach of duty of fair represena-

tion, and consequently would have no

right under Vaca to sue his employer

for breach of contract." 381 F.Supp.

at 569.

We find this analysis persua-

sive. But it does not apply in in-

stances when the employee, by exhaust-

ing intraunion remedies, would not “be

able to eliminate the very wrong of

which he [or she] complains." That is

the case here.

The rationale for requiring a

showing of "wrongful" conduct in the

Vaca-Hines context, as noted, is to

prevent the circumvention of collec-

tively bargained grievance procedures.

A party should be barred from seeking

in court what might still be obtained

through private contractual remedies.

Allowing the employer to raise intra-

union exhaustion as a defense, if ex-

haustion could have resulted in a

Claimant obtaining the same relief he

or she seeks in a civil action, pro-

6 aAc-

motes private dispute resolution.

cordingly, the employer's exhaustion

defense is properly recognized in

those circumstances.

If, however, an aggrieved party

cannot obtain adequate relief through

contractual or internal grievance pro-

cedures, the dispute resolution

rationale is inapplicable. There is

no reason, consistent with Vaca,

Hines, et al., to require exhaustion

if, regardless of the outcome of a full

grievance procedure, a claimant will

be compelled to resort to judicial

process.

Here, once the union withdrew

its petition for a hearing on his grie-

vance, Clayton lost any opportunity he

might have had for’ reinstatement

through the contractual grievance

process. Even if Clayton had success-

fully appealed the withdrawal of the

hearing request and the union had re-

versed itself and found that it should

have processed his grievance,’ the

union's public review board could do

no more than award him damages for

breach of its duty of fair representa-

tion. It could neither reinstate

Clayton nor reinstate his petition

and prosecute his grievance action.

We conclude that Clayton's’ claim

against ITT was not barred by failure

to exhaust such insufficient remedies.

See Winter vv. Local 639, Int'l

Brotherhood of Teamsters, 569 F.2d

146, 150-51 (D.C. Cir. 1977); Harri-

son v. Chrysler Corp., supra. Accord,

Margetta v. Pam Pam Corporation, 501

F.2d 179, 180 (9th Cir. 1974); Fruit &

Vegetable Packers, Local 760 Vv.

Morley, 378 F.2d 739, 745 (9th Cir.

1967).

Conditioning the employer's use

of the internal exhaustion defense on

the adequacy of internal union rem-

edies produces an anomaly. Where the

employer raises the affirmative

defense of failure to exhaust the con-

tract's dispute resolution machinery,

and where the employee has failed to

exhaust internal union procedures, the

employer will be required to defend

the union's representation of its mem-

bers. In an action from which the

union has been dismissed, ITT, to pre-

vail on its affirmative defense, must

defend the UAW's good faith in declin-

ing to presecute Clayton's grievance,

We are aware of the anomaly. But

we have not been directed to any au-

thority that would permit the employer

to escape liability if the trier even-

tually finds that the employee did not

receive the minimum representation his

union owed him. On the contrary, the

cases compel the result we reach,

In Vaca, the Supreme Court said

that the union's wrongful refusal to

process a grievance could not defeat

the employee's right to judicial

relief against the employer, even

though “the employer in such a situa-

tion may have done nothing to prevent

exhaustion of the exclusive contrac-

tual remedies to which he agreed in the

collective bargaining agreement." 386

U.S. at 185. This means that the pro-

tection afforded to an employer by the

collective bargaining agreement is

conditional on the union's discharge

of its duty to represent an employee

fairly. Hines v. Anchor Motor

Freight, Inc., 424 U.S. at 57l. The

Court recognized that this in turn

means courts will have to pass on

whether there has been a breach of the

duty of fair representation in actions

for breach of the employment contract.

Vaca v. Sipes, 386 U.S. at 187. / To

hold here that Clayton has no cause of

action against ITT because of his

union's failure to proceed to arbitra-

tion would run counter to the basic

principles of Vaca and Hines.

We must therefore remand this

case. ITT will be liable only if (a)

the union's withdrawal of its demand

for arbitration was wrongful, as that

term has been construed in Vaca,

Hines, and other cases, and (b) Clay-

ton's discharge was a breach of con-

tract. See Hines v. Anchor Motor

Freight, Inc., 424 U.S. at 570-71.

We note also that, although the

union will incur no liability because

of Clayton's failure to exhaust inter-

nal remedies, the extent of the

union's wrong (if any) can affect the

relief granted against ITT.

"If a breach of duty by the union

and a breach of contract by the em-

ployer are proven, the court must

fashion an appropriate remedy. Pre-

sumably, at least in some cases, the

union's breach of duty will have en-

hanced or contributed to the em-

ployee's injury. * * * The govern-

ing principle, then, is to apportion

liability * * * according to the dam-

age caused by the fault of each."

Vaca v. Sipes, 386 U.S at 187, 197.