Labor & Employment Law Daily Air traffic controller not required to exhaust CBA’s grievance procedures before bringing Section 301 suit
Tuesday, December 11, 2018

Air traffic controller not required to exhaust CBA’s grievance procedures before bringing Section 301 suit

By Kathleen Kapusta, J.D.

Reversing and remanding a district court’s determination that an employee was required by the governing collective bargaining agreement to exhaust its grievance procedures before filing suit in federal court under LMRA Section 301, and that he failed to do so, the Fourth Circuit found the lower court erred in treating the exhaustion requirement as a matter of jurisdiction and in holding that the CBA in fact required exhaustion. The Supreme Court’s Section 301 exhaustion requirement is not jurisdictional, and the CBA at issue did not require exhaustion (Staudner v. Robinson Aviation, Inc., December 7, 2018, Harris, P.).

Discharge and grievance. The employee, an air traffic controller for Robinson Aviation, alleged that he was fired not for just cause as required by the CBA but because of personal animosity on the part of his supervisor. He filed a grievance to appeal his termination under the CBA’s four-step process, but Robinson denied the grievance under each of the first three steps. When the employee attempted to initiate arbitration, the union informed him that it did not believe his case warranted arbitration. The employee then contacted the designated arbitration service on his own, but Robinson refused to participate, telling him that only the union could force it to arbitrate. Although the union then gave the employee permission to proceed individually, Robinson still refused to arbitrate. The employee then sued in federal court, asserting that Robinson wrongfully terminated him in violation of the CBA and the union breached its duty of fair representation in handling the grievance.

Lower court proceedings. Neither defendant asserted that the employee failed to exhaust the CBA’s grievance procedures. The district court found the employee introduced sufficient evidence to suggest that his wrongful discharge claim had merit and that the union’s pursuit of that claim was so minimal that a fact dispute existed as to whether it had breached its fair representation duty by declining to arbitrate. The union then raised the exhaustion issue, arguing that the district court lacked subject matter jurisdiction over the suit because the air traffic controller had failed to exhaust his remedies under the CBA.

Section 301 exhaustion. Granting the union’s motion, the lower court stated that the Supreme Court established an exhaustion requirement under Section 301(a), under which an “employer cannot be held liable for breach of a collective bargaining agreement unless it can be shown that the employee unsuccessfully sought relief through the union grievance procedure.” That requirement, said the court, was jurisdictional. Without identifying any provision of the CBA requiring exhaustion, the court concluded that the employee failed to exhaust because he “voluntar[ily] ended the arbitration process before completion.”

Not a jurisdictional prerequisite. On appeal, the court noted that this case “requires that we clarify ‘the distinction between two sometimes confused or conflated concepts: federal-court ‘subject-matter’ jurisdiction over a controversy; and the essential ingredients of a federal claim for relief.’” Finding that the judicially mandated exhaustion requirement is not a jurisdictional prerequisite to filing suit under Section 301, the court pointed out that Congress has not clearly stated that Section 301’s exhaustion requirement goes to a court’s subject matter jurisdiction. “In fact,” said the court, “Congress has said nothing at all about this exhaustion requirement, because the Supreme Court, not Congress, created” it, and this alone was enough to establish that exhaustion was not jurisdictional in this instance.

Equitable exceptions. Further, the court found the Supreme Court’s own treatment of the exhaustion requirement confirmed it was nonjurisdictional in nature. The High Court, noted the court here, has carved out multiple exceptions to its exhaustion requirement designed to avoid the “great injustice” that would result if a union or employer’s wrongful conduct prevented an employee from exhausting and then left him “remediless.” Noting that these exceptions clearly rest on equitable grounds, the Fourth Circuit explained that the Supreme Court has no authority to create equitable exceptions to jurisdictional requirements. Because a court may not excuse a lack of jurisdiction on equitable grounds, “it follows that the exceptions to § 301(a) exhaustion are exceptions to a nonjurisdictional rule,” the court reasoned.

Observing further that the Supreme Court has described exhaustion under Section 301(a) as a rule crafted by it to advance Congress’s preference for private resolution of labor disputes, the appeals court held that Section 301’s exhaustion requirement is a nonjurisdictional precondition to suit rather than a jurisdictional limit.

Exhaustion not required. The court next found that the parties did not agree to a mandatory and exclusive grievance process. Article 19, Section 4 of the agreement, entitled “Dispute Resolution,” states that “An employee shall have the option of utilizing the unfair labor practice procedures as provided by law or other such avenues as provided by law or the grievance/ arbitration procedures contained in this Article.” This language, said the court, makes the grievance procedures optional, not mandatory. By its plain terms, the court pointed out, it is up to the employee to choose the forum in which to resolve a dispute, and those choices include “other such avenues as provided by law,” a formulation broad enough to encompass the employee’s current Section 301(a) action. Moreover, the agreement throughout uses only permissive, not mandatory, language.

Optional language throughout. Also rejected was the defendants’ contention that even if the agreement does not require that all employees use the grievance procedures, it does require that an employee who initiates a grievance, as the employee did here, take that grievance to arbitration. “At each step of the grievance process, the agreement gives employees the option of escalating to the next; there is no requirement that they do so,” the court stated, noting that “Nothing in this agreement commits employees – even those who have initiated the grievance process – to mandatory arbitration.”

Exhaustion grounded in contract. Finally, the court addressed the defendants’ assertion that federal law required the employee to exhaust even if the agreement did not. That argument, said the court, “misconceives the nature of the exhaustion requirement, which is grounded in contract principles and, as noted above, applies only when ‘the bargaining agreement contains grievance and arbitration provisions which are intended to provide the exclusive remedy for breach of contract claims.’” Based on the language of the agreement at issue here, the court found it evident that the parties did not intend its grievance procedures to be an employee’s exclusive remedy. Thus exhaustion was not required.

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