Clayton v. ITT Gilfillan

• Decision Date: 14 April 1980
• Docket Number: Nos. 77-2756,77-2763,s. 77-2756
• Citation: 623 F.2d 563
• Parties: 104 L.R.R.M. (BNA) 2118, 87 Lab.Cas. P 11,545, 88 Lab.Cas. P 12,009 Clifford E. CLAYTON, Appellee, v. ITT GILFILLAN, etc., et al., Appellant. Clifford E. CLAYTON, Appellant, v. ITT GILFILLAN, etc., et al., Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 563

623 F.2d 563

104 L.R.R.M. (BNA) 2118, 87 Lab.Cas. P 11,545,

88 Lab.Cas. P 12,009

Clifford E. CLAYTON, Appellee, v. ITT GILFILLAN, etc., et al., Appellant.

Clifford E. CLAYTON, Appellant, v. ITT GILFILLAN, etc., et al., Appellee.

Nos. 77-2756, 77-2763.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 4, 1979.

Decided April 14, 1980.

Everett F. Meiners, Parker, Milliken, Clark & O'Hara, Los Angeles, Cal. (on brief), and Lawrence Rosenzweig, Los Angeles, Cal., argued, for appellants.

John T. McTernan (argued), Margolis, McTernan, Scope, Sacks & Epstein, Los Angeles, Cal., on brief, for appelles; Elizabeth Spector, Los Angeles, Cal., argued.

Appeal from the United States District Court for the Central District of California.

Before GOODWIN and KENNEDY, Circuit Judges, and TAYLOR ^*, District Judge.

GOODWIN, Circuit Judge:

Clayton, a discharged employee, appeals from a district court judgment dismissing his action against ITT-Gilfillan for wrongful discharge under section 301 of the Labor Management Relations Act (29 U.S.C. § 185) and 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. ¹

For alleged misconduct not material here, ITT fired Clayton in February 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 contract, a formal request for reinstatement, but the company denied his request. 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, however, 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 membership 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 Constitutional 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 constitutional 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 several months later.

Both the union and ITT 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 redress his grievance, and (3) exhaustion 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 action against either defendant.

1. The union's exhaustion defense.

The exhaustion of internal remedies as a condition of maintaining an action against the union is a matter of judicial discretion. ² Buzzard v. Local Lodge 1040, 480 F.2d 35, 41 (9th Cir. 1973); Keeffe Brothers v. 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.2d 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 Article 32, section 12, of the union constitution made exhaustion mandatory here. Exhaustion is excused only if the remedies available are inadequate or if resort to the internal procedures 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 internal appeals process was inadequate because 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 adequate. See Baldini v. Local No. 1095, 581 F.2d at 149 (citing cases). In Baldini, the Seventh Circuit upheld the UAW procedures against an objection identical to that raised by Clayton. The ability to award only money damages does not make the process inadequate; relief against the union in the civil action Clayton now brings would give him no more. A primary reason for requiring exhaustion is to forestall unnecessary interference with union affairs. Brady v. Trans World Airlines, Inc., 401 F.2d 87, 104 (3d Cir. 1968), cert. denied, 393 U.S. 1048, 89 S.Ct. 680, 21 L.Ed.2d 691 (1969). It follows that exhaustion 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 Clayton's claim against the union.

"A primary reason for the existence 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 controversy." Buzzard v. Local Lodge 1040, 480 F.2d at 41.

The UAW's liability (if any) for breach of its duty of fair representation would depend on the reasons for the union's withdrawal of the arbitration request. There is little in the record to indicate why the local official changed his mind and withdrew the arbitration request. But the missing motive is precisely the sort of information that an appellate body within the union would have elicited, compiling a record that would greatly assist the court now. ³

For all these reasons, the district court acted well within its discretion 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.

2. 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. This circuit has discussed the validity of the employer's asserted exhaustion defense in dictum, but it has never directly decided the issue. ⁴ We now find 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 remedies as a defense.

While exhaustion of union remedies is not a condition precedent to maintaining an action against an employer, the employer is protected to a substantial degree by the exclusivity of the collective bargaining agreement's arbitration remedy. Exhaustion of the remedies provided in the agreement is required prior to a breach-of-contract action when those remedies are exclusive. Vaca v. Sipes, 386 U.S. 171, 184, 87 S.Ct. 903, 913, 17 L.Ed.2d 842 (1967). ⁵ Remedies are presumed to be exclusive where, as here, the parties to the agreement do not expressly provide that the grievance and arbitration procedures are not the exclusive remedy. Republic Steel Corp. v. Maddox, 379 U.S. 650, 657-58, 85 S.Ct. 614, 618-619, 13 L.Ed.2d 580 (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 initiation of arbitration or other remedies. Therefore, an exception to the exhaustion doctrine is recognized. Where, as here, the union has sole 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, 87 S.Ct. at 914. See also Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976); Motor Coach Employees v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971); Beriault v. Local 40, 501 F.2d 258 (9th Cir. 1974). To be wrongful, however, the failure must be "arbitrary, discriminatory, or in bad faith." Vaca v. Sipes, 386 U.S. at 190, 87 S.Ct. at 916.

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 exhaustion barrier to union liability for failure to represent him. Here, ITT contends that Clayton's failure to exhaust his intraunion remedies precluded a showing that the UAW's failure to prosecute his grievance was "wrongful," barring his action for wrongful discharge.

It is initially useful, in determining the applicability of an exhaustion defense in this context, to distinguish two types of exhaustion requirements and the policies underlying each. The first, discussed above, requires union members to pursue all remedies under a union's constitution and bylaws before bringing actions against the union. As noted, this exhaustion requirement prevents unnecessary judicial interference in union disputes...