O'Keefe v. Department of Social Services

• Decision Date: 15 October 1987
• Docket Number: Docket No. 90334
• Citation: 162 Mich.App. 498,413 N.W.2d 32,127 L.R.R.M. (BNA) 2904
• Parties: Sean O'KEEFE, Plaintiff-Appellant, and Kathleen Billmieir, Plaintiff, v. DEPARTMENT OF SOCIAL SERVICES and Michigan State Employees Association, Defendants-Appellees. 162 Mich.App. 498, 413 N.W.2d 32, 127 L.R.R.M. (BNA) 2904
• Court: Court of Appeal of Michigan — District of US

Page 32

413 N.W.2d 32

Sean O'KEEFE, Plaintiff-Appellant and Kathleen Billmieir, Plaintiff, v. DEPARTMENT OF SOCIAL SERVICES and Michigan State Employees Association, Defendants-Appellees.

Docket No. 90334.

162 Mich.App. 498, 413 N.W.2d 32, 127 L.R.R.M. (BNA) 2904

Court of Appeals of Michigan.

Submitted Dec. 2, 1986.

Decided May 7, 1987.

Released for Publication Oct. 15, 1987.

[162 MICHAPP 500] Frank & Forester by Michael J. Forester, Saginaw, for plaintiff-appellant.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and Gary P. Gordon, and Cheryl B. Lord, Asst. Attys. Gen., for Dept. of Social Services.

[162 MICHAPP 501] Jinger K. Andrews, Lansing, for the Michigan State Employees Ass'n.

Before BEASLEY, P.J., and R.B. BURNS and LOSTRACCO, ^* JJ.

PER CURIAM.

In June, 1982, plaintiffs, Sean O'Keefe and Kathleen Billmieir, were laid off by defendant Department of Social Services. Defendant Michigan State Employees Association was their exclusive union representative. The collective bargaining agreement between the DSS and the MSEA established layoff and recall procedures. This lawsuit originated in the interpretation of those procedures.

Basically, the agreement provided that recall was to be made in the inverse order of seniority. Seniority was defined as "length of service at a level, including service at a higher level." "Level" was defined as the "Civil Service position comparison equivalent level."

On October 18, 1982, the DSS and the MSEA entered into a "letter of understanding" in which they defined how seniority would be computed for purposes of recalls, commencing in October, 1982, and also specified that the MSEA would "remove as an issue for arbitration the issue of layoff by level within a class series." This letter of understanding was apparently not ratified by the employees affected. The MSEA constitution in effect at that time provided that the MSEA, when acting as an exclusive representative, "shall not enter into any unit-wide agreement, excluding ground rules, unless the agreement has been ratified by the Association members in the affected unit". The collective bargaining agreement provided that the "MSEA, through an authorized Officer or Staff Representative,[162 MICHAPP 502] may grieve an alleged violation concerning the application or interpretation of this Agreement."

Plaintiffs were recalled under the letter of understanding later than certain other employees, to whom they would have been senior under what they allege to be the clear and unambiguous definition of seniority prior to the letter of understanding.

Plaintiffs initially filed individual grievances. O'Keefe also filed a "group grievance." On January 29, 1983, the MSEA arbitration committee declined to arbitrate O'Keefe's "group grievance" on the ground that no provision of the collective bargaining agreement had been violated. O'Keefe appealed that decision to the MSEA president, but did not appeal to the next higher levels of appeal, namely, the MSEA board of directors and general assembly. The MSEA constitution and bylaws required union members to exhaust all intra-union remedies before resorting to any court or administrative body.

On January 4, 1983, before the decision of the arbitration committee, O'Keefe filed an unfair labor practice charge against the MSEA and the DSS, which was reviewed by the Michigan Civil Service Commission (MCSC), Bureau of Labor Relations, Hearing Division. The hearing officer dismissed O'Keefe's charge in a decision and order dated August 23, 1983. The hearing officer held that the MSEA's handling of O'Keefe's grievances did not constitute a breach of the duty of fair representation and that any violation of the underlying collective bargaining agreement would be contractual, not giving rise to a violation of the employer relations policy rule. In particular, the heariing officer held as follows regarding such a breach of contract:

[162 MICHAPP 503] "The undersigned Administrative Law Judge hereby adopts and adheres to the consistent policy of the Michigan Employment Relations Commission in refusing to decide mere contract interpretation questions under the heading or guise of an unfair labor practice....

"When an exclusive representative and an employer negotiate a grievance procedure for the express purpose of deciding contractual disputes, MERC has reasoned and the undersigned agrees, it is normally inappropriate for an Unfair Labor Practice hearing officer to step in and determine what the parties to the contract meant by particular language. The only exception recognized by MERC is that where the contractual violation and the employer's conduct amounts to a complete renunciation of the agreement, the resulting breach may constitute evidence of a failure to bargain in good faith. In the instant case the exception is not applicable because the allegedly violated layoff and recall provisions constitute only a small portion of the overall agreement and it cannot reasonably be argued that their violation is a renunciation of the entire contract.

"The fact that the instant charge was filed against the Union in addition to the employer does not alter the essential nature of the complaint as being a contractual dispute which should be resolved via the grievance procedure rather than by an unfair labor practice proceeding." (Citations omitted.)

On May 7, 1984, the employee relations board denied leave to appeal because O'Keefe had not timely filed his appeal and, in any event, he had no meritorious basis for appeal. The MCSC affirmed that decision as its final decision. Plaintiff did not appeal the MCSC final decision to the circuit court.

While administrative review of the hearing officer's decision was pending, plaintiffs filed suit against the DSS and the MSEA in the United States [162 MICHAPP 504] District Court for the Eastern District of Michigan on October 24, 1983. In an order entered November 2, 1984, the United States District Court dismissed the case without prejudice as to state court remedies under state law.

On December 12, 1984, plaintiffs filed the action which forms the basis for this appeal in the Saginaw Circuit Court. The complaint alleged deprivation of due process rights, violation of civil rights under 42 U.S.C. Sec. 1983, violation of the right of fair representation, violation of the right to fair treatment, and breach or impairment of contractual rights. On May 2, 1985, the MSEA filed a motion for summary disposition under MCR 2.116(C)(4)--(7) on the grounds that (a) the subject matter was within the exclusive jurisdiction of the MCSC, (b) plaintiffs failed to fully exhaust their administrative remedies after their claims were heard by a hearing officer, and (c) plaintiffs failed to exhaust their intra-union remedies.

On July 11, 1985, the circuit court entered an opinion granting summary disposition to the MSEA and the DSS on the specific grounds that plaintiffs had failed to exhaust both their administrative remedies and their intra-union remedies. The court seems not to have addressed the question of whether the subject matter was within the exclusive jurisdiction of the MCSC, nor used that issue as a basis of its decision. Plaintiffs filed a motion for reconsideration, which was denied. They then filed a motion to set aside the orders granting summary disposition and denying reconsideration based on the Supreme Court decision in Demings v. City of Ecorse. ¹ The motion was denied on January 14, 1986. Plaintiff Billmieir has not appealed. Plaintiff O'Keefe appeals as of by right.

[162 MICHAPP 505] Plaintiff's first argument appears to be a response to the MSEA's allegation at the circuit court level that the MCSC had exclusive jurisdiction to hear the subject matter of the dispute. As the circuit court neither based its decision on this allegation nor mentioned the allegation in its opinion, we need not respond to plaintiff's argument.

Plaintiff next raises a set of arguments apparently meant to respond to the circuit court's determination that plaintiff failed to exhaust his administrative remedies. We note at the outset that, while the exhaustion doctrine as described in M.C.L. Sec. 24.301; M.S.A. Sec. 3.560(201) appears by its terms to apply only to appeals from administrative decisions, it has been applied in cases where the only action brought was brought in the circuit court. ² There is no reason not to apply the doctrine to cases where suits have been brought in administrative agencies but not carried to their final point of appeal. No purpose would be served by requiring exhaustion in cases never brought to an agency and in cases appealed from an agency, but not in cases originally brought in an agency and later brought before a court.

In the first argument with which he attempts to obviate the need for exhaustion of administrative remedies, plaintiff says that his complaint contained constitutional claims which could not be addressed by the MCSC. This would make no difference, however, as it is clear that some of the claims, most notably the claim that defendant MSEA violated plaintiff's right to fair representation, were within the jurisdiction of the MCSC. ³ The fact that the agency could not provide all of the [162 MICHAPP 506] relief requested does not obviate the requirement that plaintiff exhaust the available administrative remedies before the circuit court acquires jurisdiction. Further, the mere presence of a constitutional issue does not excuse the exhaustion requirement where, as here, there are other issues in controversy. ⁴

Plaintiff also argues that the hearing officer never decided the merits of plaintiff's contractual claim. Plaintiff cites the above quoted language from the hearing officer's opinion regarding his contractual claim, as well as defendants' arguments at the administrative level, that interpretation of the contract by the hearing officer was inappropriate. Plaintiff reasons that, because a...