Lathrop v. Entenmann's, Inc., 87CA0876

• Decision Date: 23 January 1989
• Docket Number: No. 87CA0876,87CA0876
• Citation: 770 P.2d 1367
• Parties: 119 Lab.Cas. P 56,666 Kenneth W. LATHROP, Plaintiff-Appellant, v. ENTENMANN'S, INC., Defendant-Appellee. . III
• Court: Colorado Court of Appeals

Page 1367

770 P.2d 1367

119 Lab.Cas. P 56,666

Kenneth W. LATHROP, Plaintiff-Appellant, v. ENTENMANN'S, INC., Defendant-Appellee.

No. 87CA0876.

Colorado Court of Appeals Div. III.

Jan. 23, 1989.

Rehearing Denied Feb. 23, 1989.

Haskell and Menter, Jeffrey Menter, Denver, for plaintiff-appellant.

Sherman & Howard, Charles W. Newcom, Susan K. Grebeldinger, Denver, for defendant-appellee.

CRISWELL, Judge.

Plaintiff, Kenneth W. Lathrop, appeals from the summary judgment dismissing his claims for wrongful discharge against the defendant, Entenmann's, Inc. The district court entered its judgment because it concluded that all of the claims asserted by plaintiff were "pre-empted" by the provisions of § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1982). Because we conclude that none of plaintiff's claims are pre-empted by this statute, and because there exist genuine issues of fact to be resolved, we reverse.

Defendant is in the bakery business. Certain of its employees, including plaintiff, are represented for collective bargaining purposes under the National Labor Relations Act, 29 U.S.C. § 151, et seq. (1982), by the Bakery, Confectionary and Tobacco Workers International Union, AFL-CIO, Local 29 (the union). During the period relevant to this litigation, defendant and the union were parties to a collective bargaining agreement (the contract) that regulated the employees' wages, hours of work, and other terms and conditions of employment.

Among the provisions of the contract are those that establish a plantwide seniority system for various purposes, including a seniority "bidding" system for filling any permanent job vacancy. Under the contract, an employee's seniority is terminated only by his discharge, his voluntary quitting of the job, his "layoff" of more than 12 months, or his absence from the job for more than 12 months because of an illness or injury. However, if the employee's absence is necessitated by an occupational illness or injury, that circumstance will merit "exceptional consideration." In addition, defendant has agreed not to discriminate against any employee because of a "non-disabling handicap."

The contract also establishes a mandatory grievance and arbitration procedure which must be followed to resolve any dispute relating to the "administration and interpretation" of any of its terms. Pursuant to this procedure, a "disciplinary penalty" may be made the subject of binding arbitration, if it is alleged that such discipline was imposed without "just cause."

In November 1982, plaintiff sustained an industrial injury while working for defendant, and he filed a claim for workmen's compensation benefits. That claim was settled in July 1985, when defendant's workmen's compensation carrier paid plaintiff a lump sum in full settlement of his workmen's compensation claim.

Plaintiff's employment status with defendant during the time that his workmen's compensation claim was pending is unclear. Apparently, plaintiff continued to work at his regular job until sometime in November 1984, when he was informed that he would not be able to work any longer without providing a written statement from his physician fully releasing him to perform his job.

Defendant asserted in the trial court that, when plaintiff was unable to produce such a statement, he was placed on "medical absence" and that, as of October 15, 1986--some five months after plaintiff's complaint in this suit was filed--plaintiff remained in that status. Implicitly, this assertion denied that plaintiff's status as an employee, or his seniority, had been terminated as of that date. During this period, however, the record is silent whether plaintiff was allowed to engage in seniority bidding for job vacancies, or was otherwise treated as an active employee.

Plaintiff's evidence was that, when defendant requested the production of a physician's statement, he provided a letter authorizing him to perform light duty. He testified that defendant then had a policy of allowing employees to perform light duty, but, when he made such a request of his supervisor, he was told he could no longer work for defendant. He contends that he contacted both his attorney and the union at that time, but was told that nothing could be done for him under the contract until his workmen's compensation claim was resolved.

He further alleges that, in August 1985, defendant's operations manager informed him that he would be allowed to work, if he returned to defendant the amount he had received as a result of the settlement of his workmen's compensation claim. He says that he later obtained another physician's statement, attesting that he could return to work in another area of the bakery, but defendant refused him such employment on January 2, 1986, at which time he considered that he had been constructively discharged.

On January 14, 1986, plaintiff filed a written grievance under the contract, protesting his "layoff" since November 1984 and his "constructive discharge" on January 2, 1986. In this grievance, plaintiff asserted that his layoff and discharge were in retaliation for his filing of a workmen's compensation claim. For reasons that do not appear in this record, this grievance was not referred to arbitration, and in May 1986 plaintiff commenced this suit.

Plaintiff's complaint seeks recovery on two theories of relief, and in a third part, seeks the award of exemplary damages, based upon the factual predicate alleged in the first two claims. The two theories of recovery are each based upon the assertion that plaintiff had been constructively discharged by defendant in retaliation for his filing a workmen's compensation claim. The first claim asserts that his discharge was without "just cause," and the second claim alleges that his discharge was "wrongful." He alleges that the dispute was not submitted to arbitration under the contract because the union "breached its duty of fair representation by failing to request arbitration" of the grievance filed by him.

I. Federal Pre-Emption

A. The general rule.

In authorizing the federal courts to adjudicate claims based upon the breach of a contract between an employer and a labor organization, § 301 of the Labor Management Relations Act requires the development of a body of substantive federal law applicable to union contracts. Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). And, while this statute does not prohibit an action based upon a violation of such a contract from being adjudicated by the state courts, the federal law developed under § 301 must be applied by those courts to the exclusion of any inconsistent state law that might otherwise be applicable. Teamsters Local No. 174 v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962); Digby v. Denner, 156 Colo. 260, 398 P.2d 30 (1965).

Under this federal law, if a union contract requires disputes arising under that contract to be resolved by binding arbitration, neither the federal nor state courts have the authority to pass upon the merits of those disputes. United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960). Indeed, a state may not recognize any type of state claim, whether that claim is grounded in contract or in tort, that would require an interpretation of the union contract, if its interpretation has been committed to the jurisdiction of an arbitrator. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) (state may not grant relief against insurance carrier for bad faith refusal to settle claim where right to payment of benefits depends upon terms of union contract).

Here, the contract is clear that the propriety of any "disciplinary penalty" is to be determined under the contract's grievance and arbitration proceedings. Whether "just cause" existed for plaintiff's alleged constructive discharge would, therefore, normally be determined by the arbitrator, and the courts could not become involved in the controversy. There are, however, certain exceptions to § 301's general prohibition against judicial intervention, and in our view, each of the claims asserted by plaintiff falls within such an exception.

B. The federal claim for contract breach.

A labor organization selected as the exclusive representative for an appropriate unit of employees has a duty to represent each employee within the unit fairly, irrespective of the employee's union membership. If a union violates this duty, the employee may assert a claim against it. See Ford Motor Co. v. Huffman, 345 U.S. 330, 73 S.Ct. 681, 97 L.Ed. 1048 (1953); Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944).

A union violates its duty of fair representation only when its action, or its failure to act, is based upon "arbitrary, discriminatory or ... bad faith" reasons; simple negligence on behalf of the bargaining representatives does not give rise to any claim. Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967).

Moreover, if the union's violation of its duty of fair representation owed to an employee consists of its arbitrary or discriminatory failure to submit an employee's grievance to the arbitration procedures set forth in the union contract, or its failure to prosecute the employee's claim in more than a perfunctory manner, the employee is permitted to institute a direct action against his employer, based upon a claimed breach of the union contract, without regard to any contractual requirement for arbitration. Vaca v. Sipes, supra.

Because such a claim against the employer is based upon the union contract, while the claim against the union is based upon its statutory duty to represent the employees in the bargaining unit, each claim is separate. Thus, an employee may maintain his action against his employer for breach of contract without joining the union. Czosek v. O'Mara, 397 U.S. 25, 90...