Republic Steel Corp. v. Maddox

• Decision Date: 14 March 1963
• Docket Number: 6 Div. 696
• Citation: 158 So.2d 492,275 Ala. 685
• Parties: REPUBLIC STEEL CORP. v. Charlie MADDOX.
• Court: Alabama Supreme Court

Page 492

158 So.2d 492

275 Ala. 685

REPUBLIC STEEL CORP. v. Charlie MADDOX.

6 Div. 696.

Supreme Court of Alabama.

March 14, 1963.

Rehearing Denied Dec. 12, 1963.

Moore, Thomas, Taliaferro & Burr, Jas. R. Forman, Jr., and Samuel H. Burr, Birmingham, for petitioner

Brobston & Brobston and R. L. Jones, Bessemer, opposed.

LIVINGSTON, Chief Justice.

Certiorari to the Court of Appeals of Alabama to review the opinion of the Court of Appeals in the case of Republic Steel Corporation, a Corporation, v. Charlie Maddox.

The sole question involved in this proceeding is whether or not the plaintiff below must have exhausted administrative remedies before resorting to the courts of Alabama for the breach of an employment contract in failing to pay an employee severance pay upon the permanent closing of a mine.

The facts are agreed to by the parties as shown by the opinion of the Court of Appeals.

The petitioner, the Republic Steel Corporation, seems to insist that the adjudicated cases support the theory that administrative remedies must be exhausted except in wrongful discharge cases, as in Moore v. Illinois Central Railroad, 312 U.S. 630, 61 S.Ct. 754, 85 L.Ed. 1089.

On the other hand, the respondent's contention is that under the law of Alabama, administrative remedies need not be pursued where the relationship of the employer and employee has terminated at the time the proceedings are instituted.

The decision of the Court of Appeals rests largely on the recent decision of this court in the case of Woodward Iron Co. v. Stringfellow, 271 Ala. 596, 126 So.2d 96.

But petitioner insists, as regards the Stringfellow case, that there is now a body of federal law which preempts state law, making mandatory on the employee the use of arbitration and grievance procedures as set out in the union contract. It is insisted here that since the instant case is one involving severance pay, the Stringfellow decision is not applicable. In support of this position, petitioner cites the case of Pennsylvania Railroad Co. v. Day, 360 U.S. 548, 79 S.Ct. 1322. 3 L.Ed.2d 1422, and insists that this case draws a distinction between wrongful discharge cases and an action by an employee in other types of union contract actions. It is conceded that Moore v. Illinois Central Railroad, supra, is still the law as recognized by the federal courts, but it is insisted that any other type of breach claimed under a union contract is not within what the petitioner terms 'the wrongful discharge exception.'

We think there is a distinction between that group of cases requiring exhaustion of administrative remedies, and that group of cases which permit the plaintiff to resort directly to the court for his remedy. We think the distinction recognized by all the cases is between that group of cases where the employer-employee relationships still exist, or where the damages claimed relate to a period of time when the employment relationship existed between the parties on the one hand and that group of cases where the employment relationship has ceased and the employee is suing for damages resulting from a breach of the contract not related to any continuing employer-employee relationship.

In the case of Slocum v. Delaware L. & W. R. Co., 339 U.S. 239, 70 S.Ct. 577, 94 L.Ed. 795, the court distinguished between the situation there presented and the Moore case, supra, which is emphasized by Justice Frankfurther in the Day case. This distinction in no way puts the wrongful discharge cases into one category and all other cases into another category. The cases cited by petitioner where the courts have required the plaintiff to resort to administrative remedies of grievance and arbitration under the union contract, the plaintiff's claim was based on either differences by way of lost earnings since the date of discharge, plus a prayer for reinstatement of employment status, or additional compensation claimed by the plaintiff to be due during the terms and during the time of the employment relationship. On the other hand, the Moore case held that where the employee accepted his discharge as final and brought an action for damages by way of lost earnings for duration of the union contract, he could resort to courts directly without having to exhaust his administrative remedies.

We think a claim for severance pay is analogous to a claim for damages by way of lost wages resulting from wrongful discharge. The very nature of the claim for severance pay precludes the relationship of employer and employee. The contract involved in this case gives the employee the election to remain on the unemployment list subject to recall as an employee, or to sever his relationship as an employee and claim severance pay. His suit for severance pay manifests this election, and the damages which he now seeks in no way relate to the continuing existence of the employer-employee relationship, nor are they based on a claim for additional compensation which allegedly accrued during the employment status.

Severance pay, by its very definition, means compensation due an employee, upon the severance of his employment status with the...