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Union’s Breach of DFR Must Cause Employee's Failure to Exhaust CBA Remedies: Fourth Circuit
Practical Law Legal Update w-001-5973 (Approx. 5 pages)
Union’s Breach of DFR Must Cause Employee's Failure to Exhaust CBA Remedies: Fourth Circuit
by Practical Law Labor & Employment
| Published on 15 Mar 2016 • USA (National/Federal) |
In Groves v. Communication Workers of America, the US Court of Appeals for the Fourth Circuit held that a hybrid claim under Section 301 of the Labor Management Relations Act (LMRA) requires a causal connection between the union's breach of its duty of fair representation (DFR) and the employee's failure to exhaust a collective bargaining agreement's (CBA) contractual remedies.
On March 10, 2016, in Groves v. Communication Workers of America, the US Court of Appeals for the Fourth Circuit held that where an employee fails to exhaust contractual remedies, the employee's hybrid claim under Section 301 of the Labor Management Relations Act (LMRA) (29 U.S.C. § 185) must include an allegation that the union's breach of its duty of fair representation (DFR) was causally connected to the employee's failure to exhaust contractual remedies ( (4th Cir. Mar. 10, 2016)).
Background
AT&T (the employer) terminated sixteen employees represented by the Communication Workers of America (CWA) based on inaccurate sales performance reports. The employer was not obligated under the collective bargaining agreement (CBA) to inform the union of the discharges and did not do so. The CBA contained a 45-day limitations period during which grievances could be filed. After the limitations period ran, the employer discovered the inaccuracy in the sales performance reports and contacted the CWA local that represented the employees who had been terminated. The employer noted that for a specified period it would offer either:
- Reinstatement and a $2,500 settlement.
- A $5,000 settlement without reinstatement.
The union failed to communicate the settlement offer to two employees, who had failed to grieve the discharge within the limitations period. Those employees later learned of the settlement and were told that only the settlement without reinstatement was available at that time. They asked the union if it could file a grievance about the discharge, but at that time the limitations period had long since run.
The employees brought a hybrid Section 301 claim against the union and employer in federal district court. The employer settled the matter and reinstated the employees. The union obtained summary judgment because the employees had failed to exhaust contractual remedies under their CBA.
Outcome
The Fourth Circuit noted that:
- Employees must ordinarily exhaust CBA remedies, usually by filing a timely grievance, before suing an employer for breaching a CBA in federal district court (Republic Steel Corp. v. Maddox, 379 U.S. 650, 652-53 (1965)).
- The exhaustion requirement is excused when the employee can show that:
- the employer violated the CBA; and
- the union breached its DFR by acting, or failing to act, arbitrarily, discriminatorily, or in bad faith (Thompson v. Aluminum Co. of Am., 276 F.3d 651, 656 (4th Cir. 2002); Vaca v. Sipes, 386 U.S. 171, 190 (1967)).
- Other circuits require a causal connection between the union's breach of its DFR and the employee's failure to exhaust contractual remedies (see Blesedell v. Chillicothe Tel. Co., 811 F.3d 211, 221 (6th Cir. 2016); Mulvihill v. Top–Flite Golf Co., 335 F.3d 15, 20 (1st Cir. 2003); White v. White Rose Food, 128 F.3d 110, 113 (2d Cir. 1997)).
The Fourth Circuit found that:
- The plaintiffs waived their rights to grieve their discharges and, by not filing timely grievances, precluded the union from investigating the discharges and potentially uncovering the flaws in the employer's reports sooner.
- The union may have been irresponsible when it failed to inform the plaintiffs of the settlement offer, but the plaintiffs had already failed to exhaust the CBA's remedies before the settlement offer.
- There was no causal connection between the union's inaction and the plaintiffs' failure to exhaust CBA remedies.
The Fourth Circuit held that:
- It will require a causal connection between the union's actions or inactions in breach of its DFR and an employee's failure to exhaust CBA remedies before it considers excusing that failure and sustaining a hybrid Section 301 claim against a union and employer. In other words, the union's breach of its DFR must have had a role in an employee's failure to exhaust.
- A hybrid Section 301 suit cannot be used to challenge obstructive union conduct that does not contribute to an employee's failure to exhaust CBA remedies.
- The district court properly granted summary judgment to the union.
Practical Implications
In this case, the Fourth Circuit joined several other circuits by expressly adopting a causality requirement in hybrid Section 301 claims. Employers should recognize this as a new ground to defeat the assertion that employees were excused from exhausting CBA remedies before bringing suit in federal district court. While the Fourth Circuit's adoption of the causality requirement has greater implications for unions, it is critical for employers as well because their liability in hybrid Section 301 claims is hinged on the union's initial liability for a DFR breach.
To see summaries of sample CWA CBAs and compare them with other unions' CBAs, visit the What's Market Collective Bargaining Agreements Database.