Hanson v. Madison Service Corp., 88-0252

• Decision Date: 11 May 1989
• Docket Number: No. 88-0252,88-0252
• Parties: Dean A. HANSON, Plaintiff-Appellant, v. MADISON SERVICE CORPORATION, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

Page 315

443 N.W.2d 315

150 Wis.2d 828

Dean A. HANSON, Plaintiff-Appellant, v. MADISON SERVICE CORPORATION, Defendant-Respondent.

No. 88-0252.

Court of Appeals of Wisconsin.

Argued Nov. 17, 1988.

Opinion Released May 11, 1989.

Opinion Filed May 11, 1989.

Rosemary J. Fox (argued), and Fox, Fox, Schaefer & Gingras, S.C., Madison, for plaintiff-appellant.

James C. Herrick, Michael J. Westcott (argued), and Edith F. Merila, and Axley Brynelson, Madison, for defendant-respondent.

Before GARTZKE, P.J., and EICH and SUNDBY, JJ.

EICH, Judge.

This is an employment termination case in which the employee, Dean A. Hanson, a Madison bus driver, claims that he was denied due process of law because of the failure of his employer, Madison Service Corporation (MSC), to provide him with constitutionally required pre- and post-termination hearings. Hanson appeals from an order overturning a jury verdict, which found that he had not received an adequate pretermination hearing, and refusing to reconsider an earlier ruling that the post-termination procedures provided by MSC were constitutionally adequate.

We agree with the trial court's ruling that Hanson received adequate post-termination process, and we also agree, and the parties concede, that the trial court's reasons for granting judgment notwithstanding the jury's verdict have been nullified by an intervening United States Supreme Court decision. ¹ We therefore reverse the order insofar as it overturned the jury's verdict, and insofar as it declined to grant Hanson's motion for summary judgment on the issue of denial of his pretermination due process rights. We also conclude that he is entitled to only nominal damages not to exceed one dollar for the denial and remand to the trial court for this purpose. Finally, because Hanson has waived any claims for compensatory or actual damages by failing to request their inclusion in the verdict, we affirm the order in all other respects.

While the facts are simply stated, the procedural history of the case is more complex. Hanson was terminated from his employment after MSC, the company operating the bus system in the City of Madison, determined that he had been involved in five "chargeable" accidents within a four-month period in late 1978. Under the company's policy of "cumulative discipline" for drivers involved in traffic accidents, successive accidents are punished by increasing periods of suspension, and the fifth accident subjects a driver to discharge. All accidents in which city bus drivers are involved are reported to and reviewed by an "Accident Review Board" established by the collective bargaining agreement between MSC and the drivers' union. The board is comprised of two drivers, two representatives of MSC management, and a Madison police officer; and it is the board's function to determine whether a given accident should be "chargeable" against the driver for disciplinary purposes.

Hanson filed a grievance protesting his discharge, which MSC denied. After investigating the matter, Hanson's union determined that his grievance lacked sufficient merit to take to arbitration. Hanson then sued MSC and the union, claiming that MSC had discharged him in violation of his due process rights and that the union had breached its duty of fair representation by failing to take his grievance to arbitration. The trial court granted MSC's motion for judgment on the pleadings, concluding that both causes of action were barred by the statute of limitations. Hanson, apparently agreeing in part with that decision, voluntarily dismissed his claim against the union and appealed the trial court's judgment insofar as it held that his action against MSC was untimely. We reversed, holding that a three-year, not a one-year, statute of limitations applied to his claims against the company, and we remanded the case to the trial court for further proceedings. Hanson v. Madison Service Corp., 125 Wis.2d 138, 370 N.W.2d 586 (Ct.App.1985).

Both parties then moved for summary judgment. Hanson's motion claimed that judgment should be entered in his favor confirming the due process violations, and MSC's motion contended that Hanson's action should be dismissed because he had received all of the process that was due him. The court granted MSC's motion with respect to the post-termination procedures, holding that Hanson had received constitutionally adequate post-termination process; and it denied both parties' motions with respect to the pretermination procedures because it believed that issue required resolution by a jury. As indicated, the jury eventually found that the pretermination procedures were constitutionally inadequate and the trial court overturned that verdict on grounds which have since been vitiated by the supreme court decision. For reasons of continuity and ease of exposition, we consider the post-termination issue first.

I. POST-TERMINATION PROCESS

The rights of an employee terminable only for cause, as Hanson was, are considered property rights which may only be abridged pursuant to procedures that are "constitutionally adequate" under the due process clause of the United States Constitution. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541, 105 S.Ct. 1487, 1492, 84 L.Ed.2d 494 (1985). This means that the employee is entitled to notice and an opportunity to be heard prior to termination of his or her employment, and the right to post-termination procedures which provide an opportunity to challenge the merits of the discharge. Id. at 546-48, 105 S.Ct. at 1495-97.

In Eastman v. City of Madison, 117 Wis.2d 106, 342 N.W.2d 764 (Ct.App.1983), we noted that provisions in collective bargaining agreements providing for arbitration of employee grievances have been held adequate to satisfy due process requirements:

The grievance-arbitration provisions of [the] collective bargaining agreement furnished [appellants] with an adequate opportunity to obtain a fair hearing in which to contest the allegedly arbitrary deprivation of [their] job, and therefore [they were] not deprived of a liberty-property interest in violation of due process.

Id. at 113, 342 N.W.2d at 768, quoting Tufts v. United States Postal Service, 431 F.Supp. 484, 488 (N.D.Ohio 1976) (other citations omitted; bracketing in original). In this case, the trial court ruled that Hanson was afforded constitutionally adequate post-termination process through the grievance/arbitration provisions of the collective bargaining agreement, and Hanson does not challenge the adequacy of those procedures. He argues, however, that because the union refused to take his discharge grievance to arbitration, he never had the opportunity to avail himself of that remedy and, as a result, his right to due process was effectively denied.

A union is the "exclusive bargaining representative" for its members and because the grievance procedure is "an integral part of the collective bargaining process," the union's exclusive agency continues with respect to the procedures designed to enforce the collective bargaining agreement--the grievance and arbitration provisions. Malone v. United States Postal Service, 526 F.2d 1099, 1108 (6th Cir.1975). As a result, it has been held that an employee does not have the right to compel his or her employer to meet with him or her to adjust a grievance where, as here, the collective bargaining agreement gives the union control over the grievance machinery. Id. at 1107. In such a situation, the employee must rely on the union to exhaust his or her contractual remedies. Id.

The union, as the employees' exclusive representative, "must, of course, represent all employees fairly and in good faith." Winston v. United States Postal Service, 585 F.2d 198, 208 (7th Cir.1978). The union has the obligation "to serve the interests of all members without hostility or discrimination ... [and] to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct." Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 909, 17 L.Ed.2d 842 (1967). It is a duty of fair representation, which may be breached if the union's decision not to pursue arbitration of a grievance in a given case is made arbitrarily or in bad faith. Id. at 193, 87 S.Ct. at 918.

In Winston, the fired employees had the right under their collective bargaining agreement to grieve their terminations. At their request, the union advanced their grievances through the process. In Winston's case, however, the union declined to take an adverse decision on the grievance to arbitration and he claimed this violated his due process rights. The court disagreed and held that the procedures were constitutionally adequate, noting that: "[A]ppellants through their [union], had an opportunity to request arbitration of their grievances. Although [the union] declined their requests to demand arbitration, appellants could have sued the Union for breach of its duty to fairly represent them if the refusal to demand arbitration was not in good faith." Id., 585 F.2d at 210 (citations and footnotes omitted).

It appears, then, that Hanson's claim for the union's failure to take his grievance to arbitration is against the Union, not MSC. Indeed, Hanson initially joined the union in the lawsuit on grounds that, by failing to process his grievance, it breached its duty of fair representation. The cause of action could not be maintained, however, because the applicable statute of limitations had run.

Hanson argues that the union should not be allowed to "bargain away" or "waive" an individual member's constitutional rights, and that even though the failure to take the case to hearing was the result of the union's action, not MSC's, he nonetheless should be allowed to sue MSC for that failure. He relies on two cases, Clark v. Hein-Werner Corp., 8 Wis.2d 264, 99 N.W.2d 132 (1959), cert. denied, 362 U.S. 962, 80 S.Ct. 878, 4 L.Ed.2d 877 (1960), and Laffey v. Northwest Airlines, Inc., 567 F.2d 429 (D....