Schum v. South Buffalo Railway Co.

• Decision Date: 25 April 1974
• Docket Number: Docket 73-2276.,No. 457,457
• Citation: 496 F.2d 328
• Parties: James C. SCHUM, Appellant, v. SOUTH BUFFALO RAILWAY CO., Appellee.
• Court: U.S. Court of Appeals — Second Circuit

496 F.2d 328 (1974)

James C. SCHUM, Appellant, v. SOUTH BUFFALO RAILWAY CO., Appellee.

No. 457, Docket 73-2276.

United States Court of Appeals, Second Circuit.

Argued January 18, 1974.

Decided April 25, 1974.

Grover R. James, Jr., Buffalo, N. Y. (Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, N. Y., on the brief), for appellee.

Lauren D. Rachlin, Buffalo, N. Y. (Rachlin & Rachlin, Buffalo, N. Y., on the brief), for appellant.

Before FRIENDLY and MANSFIELD, Circuit Judges, and ZAMPANO, District Judge.^*

ZAMPANO, District Judge:

James C. Schum, a former employee of the South Buffalo Railway Company, instituted this suit with a complaint alleging four causes of action, one based upon wrongful discharge by the railroad in violation of the collective bargaining agreement between the union and the company, and the remaining three counts against the union and its General Chairman for breach of their duty of fair representation. The district court granted the railroad's motion for summary judgment on the ground Schum was barred from recovery because he failed to exhaust the remedies available to him under the collective bargaining contract. In so doing, the court rejected Schum's contention that this failure was excused by his reliance upon the union to process his grievance within the timetable established in the labor agreement. We reverse and remand.¹

The facts may be briefly stated. On March 11, 1966, Schum, a longtime employee of the railroad, received personal injuries during the course of his employment. Although he attempted to return to work in September and October of 1966, company doctors were unable to certify that he was physically able to resume his employment. Thereafter a dispute arose between Schum and the company's representatives concerning his ability to perform his regular duties and, on March 23, 1967, he was ordered to report for another physical examination on March 27, 1967. When Schum's request for a postponement was denied, he refused to appear. The following day he received a notice that a disciplinary hearing would be held on April 3, 1967. Schum informed the railroad that his lawyer would be unavailable on that date and asked that the hearing be adjourned one week. The request was denied and Schum was subsequenty discharged for insubordination. On April 23, Schum wrote a letter to the national headquarters of his union in Cleveland seeking advice and assistance. Within a few days, General Chairman Dolan of the local met with Schum and agreed to process his grievance through the administrative appellate procedures set forth in the bargaining agreement.

Essentially the contract creates two administrative levels for the handling of grievances. The first step allows either the aggrieved employee or the union's representative to present the grievance to a high ranking company official for consideration. If the claim is disallowed, an appeal must be filed within six months by the employee or the union with the National Railroad Adjustment Board. If a timely appeal is not instituted, the claim is barred and the company's decision becomes "final and binding." The contract further provides "that the parties may by agreement in any particular case extend the 6 months' period herein referred to."

General Chairman Dolan completed the first step of the grievance procedure on May 9, 1967, by requesting that the company reconsider its decision to terminate Schum's employment. On May 17, 1967, the railroad affirmed the discharge. In the following months, there was further correspondence between the railroad and the union with respect to Schum's case, but the union made no effort to carry a timely claim to the second step of the grievance procedure. On November 15, 1967, the union unsuccessfully attempted to obtain the company's consent to an extension of the six-month limitations period in order to process Schum's appeal to the Board. It was not until Dolan was replaced as General Chairman in early 1968 that Schum claims he first learned, much to his chagrin, that the time period to appeal had elapsed and that the union had failed to take appropriate action to preserve his grievance for a hearing before the Board. Unable to pursue further the administrative remedies, Schum commenced the instant action for reinstatement and damages.

In Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965), an action commenced under the provisions of the Labor Management Relations Act, 29 U.S.C. § 141 et seq., Maddox sued his employer for severance pay allegedly due him under the terms of the collective bargaining agreement between his employer and his union. Although the contract provided for a three-step grievance procedure followed by binding arbitration, Maddox made no effort to seek arbitration. The Supreme Court held that the contractually created grievance procedures were exclusive and that Maddox was required to attempt to exhaust these procedures before instituting a court suit against the company. Left open by the Court was the question concerning the nature and form of the remedy available to an employee whose union refused to press his claim or presented it with little interest or care.

This undecided issue was squarely answered in the landmark case, Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L. E.2d 842 (1967), wherein the Supreme Court stated that in an action against his employer for wrongful discharge an employee will be excused from the exhaustion-of-remedies requirement upon a showing that the union breached its duty of fair representation in processing his claim. Id. at 186. While not defining precisely the duty of fair representation, the Court noted that "a union may not arbitrarily ignore a meritorious grievance or process it in perfunctory fashion. . . ." Id. at 191. The Court further acknowledged that the employee may sue the employer and the union in separate actions or may join both parties as defendants in the same lawsuit. Id. at 197.

Many of the principles enunciated in Maddox and Vaca have been applied to actions commenced by railroad employees pursuant to the provisions of the Railway Labor Act, 45 U.S.C. § 151 et seq. While it is true that a railroad employee generally must exhaust the administrative remedies set forth in the Act² and the labor contract before seeking a judicial determination of his grievance, see Andrews v. Louisville & Nashville R. Co., 406 U.S. 320, 92 S.Ct. 1562, 32 L.Ed.2d 95 (1972), there are exceptions. In Glover v. St. Louis — S. F. R. Co., 393 U.S. 324, 329-331, 89 S.Ct. 548, 21 L.Ed.2d 519 (1969), the Supreme Court recognized three situations in which suit could be instituted by a railroad employee despite his failure to exhaust fully his contractual remedies: (1) when the employer repudiates the private grievance machinery; (2) if the union breaches its duty of fair representation; or (3) where the administrative remedies would be wholly futile. See also Griffin v. International U., United Automobile, A. & A. I. W., 469 F.2d 181, 183 (4 Cir. 1972); Nemitz v. Norfolk and Western Railway Company, 436 F. 2d 841, 849-850 (6 Cir. 1971).

Thus, construing the complaint and moving papers liberally, Czosek v. O'Mara, 397 U.S. 25, 27, 90 S.Ct. 770, 25 L.Ed.2d 21 (1970), and accepting Schum's factual allegations as true, as we must, Gore v. Northeast Airlines, Inc., 373 F.2d 717, 726 (2 Cir. 1967), it seems clear that Maddox, Vaca, and Glover provide ample legal bases upon which Schum would have viable causes of action against both his union and his employer.

The appellee railroad, however, seeks to distinguish these authorities on the ground that the Vaca exception to the exhaustion requirement applies only if the union has the sole power under the labor contract to activate the various steps in the grievance procedure. Schum, unlike the employee in Vaca, technically had the right to process the appeal on his own through the higher appellate stages of the grievance machinery,³ but under the circumstances of this case we do not believe this distinction is sufficiently meaningful to justify the dismissal of the suit.

Schum was seeking to protect one of his most basic rights in the employee-employer relationship — the right not to be wrongfully discharged. As a general rule, grievances do not succeed without the full support of the union. Normally employees do not have the expertise, knowledge or experience to interpret the complicated substantive and procedural provisions of a collective bargaining...