Wagner v. Columbia Hospital Dist.

• Decision Date: 19 May 1971
• Docket Number: R,No. 49,49
• Citation: 259 Or. 15,485 P.2d 421
• Parties: , 78 L.R.R.M. (BNA) 2169, 9 Fair Empl.Prac.Cas. (BNA) 270, 3 Empl. Prac. Dec. P 8236, 66 Lab.Cas. P 11,939 Rachel WAGNER, Appellant, v. COLUMBIA HOSPITAL DISTRICT and Service Employees Union Local espondents.
• Court: Oregon Supreme Court

Page 421

485 P.2d 421

259 Or. 15, 78 L.R.R.M. (BNA) 2169,

9 Fair Empl.Prac.Cas. (BNA) 270,

3 Empl. Prac. Dec. P 8236, 66 Lab.Cas. P 11,939

Rachel WAGNER, Appellant, v. COLUMBIA HOSPITAL DISTRICT and Service Employees Union Local

No. 49, Respondents.

Supreme Court of Oregon.

Argued and Submitted April 7, 1971.

Decided May 19, 1971.

William C. Grant, Portland, argued the cause and filed briefs for appellant.

Herbert G. Galton, Portland, argued the cause for respondent Service Employees Union, Local No. 49. With him on the brief were Galton & Popick and Gary M. Galton, Portland.

Jay W. Whipple, St. Helens, argued for respondent Columbia Hospital District. With him on the brief were Williamson & Whipple and David B. Williamson, St. Helens.

Before McALLISTER, P.J., and DENECKE, HOLMAN, TONGUE, HOWELL and BRYSON, JJ.

TONGUE, Justice.

This is an action for damages by a discharged employee against both her former employer and the union with which her employer had a labor contract. Plaintiff's complaint alleges that she was discharged for refusing to join the union, contrary to her religious beliefs. She also alleges that her discharge was the result of a 'conspiracy' between the employer and union, with knowledge of her religious beliefs, and was in violation of her constitutional rights to religious freedom and her rights under the Civil Rights Act of 1964 (42 U.S.C.A. § 2000a), and ORS 659.020 and 659.030.

Both defendants filed motions to abate the action and to require that the matter be submitted to arbitration under the terms of the labor contract between plaintiff's employer and the union representing its employees. That contract, as attached to the motions, included both a 'union security' provision, to the effect that employees who failed to join the union 'shall be replaced,' and also a provision requiring arbitration of any dispute 'over any of the terms * * * of this agreement' and providing that the arbitration award 'shall be final and binding upon all concerned.'

Plaintiff appeals from an order allowing these motions and abating the action 'pending compliance by plaintiff with her internal contractual remedies.' Defendants moved to dismiss the appeal upon the ground that such an order was not an appealable order. That motion was denied by this court, with leave to renew that motion in briefs and on argument on appeal.

Defendants having now renewed that motion on this appeal, the first question to be decided is whether the order by the trial court granting defendants' motions to abate the action and to require plaintiff to submit the matter to binding arbitration was and appealable order.

1. An order to abate an action and to require arbitration as an appealable order.

ORS 19.010(2) provides:

'For the purposes of being reviewed on appeal the following shall be deemed a judgment or decree:

'(a) An order affecting a substantial right, and which in effect determines the action or suit so as to prevent a judgment or decree therein.'

In Winters et al. v. Grimes et al., 124 Or. 214, at p. 216, 264 P. 359 at p. 360 (1928), this court, after quoting from that statute, said:

'* * * unless the decree appealed from is a final decree within the meaning given to that word by the former decisions of this court and not interlocutory, this appeal must be dismissed. One of the tests in determining whether a judgment or decree is final is: 'If no further action of the court is required to dispose of the cause, it is final.' Other tests are: Is the order or decree one which determines the rights of the parties so that no further questions can arise before the court rendering it, except such as are necessary to be determined in carrying it into effect, or is the judgment or decree 'one which concludes the parties as regards the subject-matter in controversy in the tribunal pronouncing it?' This question has been so fully considered and decided with such finality that anything more than a mere citation of authorities could add nothing to what has been previously said by this court. (Citing cases)'

The question whether an order abating an action to require arbitration is an appealable order has never been decided by this court, but has been the subject of considerable litigation in other courts. See Annot., 94 A.L.R.2d 1071 and Annot., 99 L.Ed. 241, 244. In most of the cases on this subject the parties to the litigation are the same as the named parties to the contract which includes the provision for arbitration. The federal courts, in a number of such cases, have held that orders abating common law actions for damages (as in this case) and requiring arbitration are final and appealable orders. See cases cited in 94 A.L.R.2d (at 1072--4) and 99 L.Ed. (at 244). ¹ State court decisions, however, have been divided upon this question, depending largely upon the terms of the statutes involved. 94 A.L.R.2d 1078. ²

This case, however, involves at least four considerations not present in the usual case: (1) plaintiff was not a named party to the contract involved in this case; (2) even though employees may normally be bound by the results of an arbitration under provisions of a labor contract, plaintiff was no longer an employee; (3) the Oregon statute providing for the enforcement of agreement to arbitrate and for abatement of court proceedings for that purpose specifically excludes from its operation any controversies 'such as respect * * * the terms or conditions of employment under collective contracts between employers and employees or between employers and associations of employees' (ORS 33.210); and (4) the contention is made by the plaintiff in this case that the employer and union have 'conspired' to violate her constitutional rights and that to submit this controversy to arbitration would be 'futile' because both the employer and union have taken the position that under the terms of the contract she must be discharged and because plaintiff would have no right of appeal from the arbitration award to any court.

Aside from the first three of these considerations, we believe that if plaintiff is correct in her final contention it would necessarily follow that the order abating this action 'pending compliance by plaintiff with her internal contractual remedies,' as demanded by defendants, would be an order which would both 'affect a substantial right' of plaintiff and also one which would 'in effect determine the action or suit so as to prevent a judgment or decree therein' in favor of plaintiff. ³ This question, however, involves substantially the same considerations as are involved in the second question presented for decision in this case; namely, whether the trial court erred in entering such an abatement order, assuming that the order was an appealable order. We thus proceed to a consideration of that question.

2. Abatement of action for damages for wrongful discharge so as to require arbitration.

The authorities are divided upon the question whether an action by a former employee for damages for wrongful discharge may be abated so as to require the employee to exhaust the grievance procedures provided by a labor contract, including provisions for binding arbitration. See Annot., 72 A.L.R.2d 1439.

There are good reasons why, in the ordinary case, contract provisions for arbitration should not be frustrated by the bringing of legal proceedings, particularly in the field of labor relations. Thus, as stated in Republic Steel Corp. v. Maddox, 379 U.S. 650, 652--653, 85 S.Ct. 614, 616--617, 13 L.Ed. 580 (1965):

'As a general rule in cases to which federal law applies, federal labor policy requires that individual employees wishing to assert contract grievances must Attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress. If the union refuses to press or only perfunctorily presses the individual's claim, differences may arise as to the forms of redress then available. See Humphrey v. Moore, 375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370; National Labor Relations Board v. Miranda Fuel Co., 2 Cir., 326 F.2d 172. But unless the contract provides otherwise, there can be no doubt that the employee must afford the union the opportunity to act on his behalf. Congress has expressly approved contract grievance procedures as a preferred method for settling disputes and stabilizing the 'common law' of the plant. LM RA § 203(d), 29 U.S.C. § 173(d); § 201(c), 29 U.S.C. § 171(c) (1958 ed). Union interest in prosecuting employees grievances is clear. Such activity complements the union's status as exclusive bargaining representative by permitting it to participate actively in the continuing administraton of the contract. In addition, conscientious handling of grievance claims will enhance the union's prestige with employees. Employer interests, for their part, are served by limiting the choice of remedies available to aggrieved employees. And It cannot be said in the normal situation, that contract grievance procedures are inadequate to protect the interests of an aggrieved employee until the employee has attempted to implement the procedures and found them so.

'A contrary rule which would permit an individual employee to completely sidestep available grievance procedures in favor of a lawsuit has little to commend it. In addition to cutting across the interests already mentioned, it would deprive employer and union of the ability to establish a uniform and exclusive method for orderly settlement of employee grievances. If a grievance procedure cannot be made exclusive, it loses much of its desirability as a method of settlement. A rule creating such a situation 'would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements. '' (Emphasis added)

See also United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960).

It follows, in the 'normal situation,'...