Haney v. CHESAPEAKE & OHIO RAILROAD COMPANY, 73-1328.

• Decision Date: 10 April 1974
• Docket Number: No. 73-1328.,73-1328.
• Citation: 498 F.2d 987
• Parties: Hazel O. HANEY, Appellant, v. CHESAPEAKE & OHIO RAILROAD COMPANY and Baltimore & Ohio Railroad Company.
• Court: U.S. Court of Appeals — District of Columbia Circuit

498 F.2d 987 (1974)

Hazel O. HANEY, Appellant, v. CHESAPEAKE & OHIO RAILROAD COMPANY and Baltimore & Ohio Railroad Company.

No. 73-1328.

United States Court of Appeals, District of Columbia Circuit.

Argued January 25, 1974.

Decided April 10, 1974.

John H. Wilbur, Jacksonville, Fla., of the bar of the Supreme Court of Florida, pro hac vice, by special leave of Court with whom Frederick C. McAlpin, III, Washington, D. C., was on the brief for appellant. Marion Edwyn Harrison, Washington, D. C., also entered an appearance for appellant.

Albert W. Laisy, Baltimore, Md., for the bar of the Court of Appeals of Maryland, pro hac vice, by special leave of Court, with whom Laidler B. Mackall, Washington, D. C., was on the brief, for appellees.

Before LEVENTHAL, MacKINNON and WILKEY, Circuit Judges.

LEVENTHAL, Circuit Judge:

Appellant sued the Chesapeake & Ohio Railroad and the Baltimore & Ohio R.R. ("Railroads"), her former employers, to recover separation pay alleged to be due under a collective bargaining agreement. The District Court, relying upon Andrews v. Louisville & Nashville R.R., 406 U.S. 320, 92 S.Ct. 1562, 32 L.Ed.2d 95 (1972), dismissed her complaint for lack of jurisdiction, in view of plaintiff's failure to utilize arbitration available under the collective bargaining agreement or the Railway Labor Act. Appellant asserts that this case is properly governed by the pre-Andrews law prevailing at the time she was separated and filed the complaint. The pre-Andrews doctrine, established by Moore v. Illinois Central R.R., 312 U.S. 630, 61 S. Ct. 754, 85 L.Ed. 1089 (1941), and followed in Condol v. Baltimore & Ohio R. R., 91 U.S.App.D.C. 255, 256, 199 F.2d 400, 402 (1952), held that a railroad employee suing his employer for damages for wrongful discharge need not exhaust administrative remedies under the Railway Labor Act. Appellant urges that Andrews, which overruled Moore, should be applied only prospectively, in line with considerations set forth by the Supreme Court in the cases limiting retroactive effect of criminal procedure decisions. E. g., Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965).

Although our approach differs from that of the District Court, we affirm its judgment. We conclude that retroactive application of Andrews should not be withheld where, as here, the plaintiff is free to pursue administrative remedies.

I.

In Moore v. Illinois Central R.R., supra, the Supreme Court viewed the grievance adjustment procedures of the Railway Labor Act as an alternative to, and not a precondition of, an action under state law for wrongful discharge. Judicial relief under state law was available, however, only in a suit for damages and not in an action by the employee to compel reinstatement, as became clear from Slocum v. Delaware, L. & W. R.R., 339 U.S. 239, 244, 70 S.Ct. 577, 94 L.Ed. 795 (1950).

The doctrine that state law governed an employee's claim for damages arising from a discharge was reaffirmed in Transcontinental & Western Air, Inc. v. Koppal, 345 U.S. 653, 73 S.Ct. 906, 97 L.Ed. 1325 (1953).¹ However, the rationale of Moore and Koppal was undermined by later decisions holding that federal substantive law applied to suits under collective bargaining agreements mandated by § 204 of the Railway Labor Act,² International Association of Machinists v. Central Airlines, 372 U.S. 682, 83 S.Ct. 956, 10 L.Ed.2d 67 (1963), and § 301 of the Labor Management Relations Act, Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). Their undercutting of the Moore doctrine was noted in Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965), which held that an employee must exhaust contract grievance procedures before suing under § 301 of the LMRA for breach of a collective bargaining agreement. The Court discerned in the federal labor law a strong policy favoring settlement of disputes by arbitration. As to the no-exhaustion rule applicable to the Railway Labor Act cases, the Court observed (p. 655, 85 S. Ct. p. 618):

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 time 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 Ass\'n of Machinists v. Central Airlines, Inc., 372 U.S. 682, 83 S.Ct. 956, 10 L.Ed.2d 67, and by § 301(a) of the LMRA, Textile Workers v. Lincoln Mills, 353 U.S. 448 77 S.Ct. 912, 1 L.Ed.2d 972. 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.

The Maddox Court, however, declined to overrule Moore, but stated that reconsideration should await a case in which "distinctive features of the administrative remedies provided by . . . the Railway Labor 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." 379 U.S. at 657 n. 14, 85 S.Ct. at 619.

Notwithstanding Maddox, the no-exhaustion rule of Moore was applied in Walker v. Southern Railway Co., 385 U. S. 196, 87 S.Ct. 365, 17 L.Ed.2d 294 (1966), another wrongful discharge case. The Court noted that adjustment procedures under the Railway Labor Act had involved long delays and had offered employees no right to seek judicial review of awards. While new legislation had revised the procedures in 1966 to expedite awards and expand employees' right of review, the petitioner in Walker could not take advantage of the modifications, and the Court accordingly declined to require exhaustion "in his case." 385 U.S. at 196, 87 S.Ct. 365.³

Despite the signals that its foundation might be weakening, the no-exhaustion rule of Moore may have induced reliance by aggrieved employees as late as the Andrews decision, thus giving rise to a claim of surprise by the old rule's extinction. Andrews itself was a retroactive application to the petitioner himself, but that is typically the situation in any decision that overrules prior precedents, even though the decision is otherwise given only prospective effect.⁴ In Andrews, the Supreme Court did not discuss the problem of upsetting reliance upon the Moore rule, but the petitioner was left with an administrative remedy. The Court was thus able to overrule Moore without extinguishing the employee's opportunity for relief, in contrast to Walker, where the specter of injustice to the aggrieved employee led the Court to back away from overruling Moore. We believe that Andrews, read in the foregoing context, permits us to consider a claim that its retroactive effect should be withheld where necessary to avoid the kind of injustice produced by leaving an employee who justifiably relied upon the Moore rule without a remedy.

No such injustice is, however, presented by the case at bar. Two administrative tribunals have jurisdiction over the kind of claim she presents—a Special Board of Adjustment established under the collective bargaining agreement between the Railroads and the union which represented appellant while she was employed, and a division of the National Railway Adjustment Board, established under the Railway Labor Act. In either forum, the Railroads may present the same defenses which would be available in a judicial action.

One defense that has been proffered is that appellant's claim was not presented to the Railroads within the time prescribed by the collective bargaining agreement. We pass no judgment on the merits of that defense, beyond saying that it may be presented to the administrative tribunal on the same basis that it would have been available as a defense if the action were continued in court. What we do maintain as a requirement is a point on which counsel for the Railroads has given us assurance at oral argument: that the Railroads will raise no claim of laches based on appellant's delay in taking her case before the administrative tribunal.⁵

Because application of Andrews works no hardship in the sense of leaving appellant without a remedy, we conclude that in light of the strong policy favoring resort to arbitration reaffirmed in that decision appellant should not be relieved of the exhaustion requirement.

II.

Appellant contends that because of the nature of her claim for separation pay, her remedy before the administrative tribunal is not an effective one and urges us to apply the rule that exhaustion is not required where the administrative remedy is inadequate. See, e. g., Steele v. Louisville & Nashville R.R., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944); Order of Railway Conductors v. Swan, 329 U.S. 520, 67 S.Ct. 405, 91 L.Ed. 471 (1947).

The facts which underlie appellant's contention of inadequacy are these. Appellant's job as a ticket agent was abolished in June, 1968, as part of a general work force reduction by the Railroads. Eventually the Railroads closed their Washington, D.C. office in 1970. At the time her job was abolished, there were no vacant positions for her at Washington, and she declined to accept work at the Baltimore, Maryland, office, thereby terminating her employment.

Her claim for separation pay is based, in part, on the following provision of a 1967 collective bargaining agreement between the Railroads and the union:

Any employee involved in or affected by the coordination provided for in . . . this agreement who is deprived of employment as a result of such coordination shall be accorded an allowance (hereinafter termed a coordination allowance). . . .

Section 1(d), Appendix A, Memorandum Agreement of December 2, 1965. A...