Vaca et al. v. Sipes, Administrator

Supreme Court of United States
386 U.S. 171 (1967)

ELI5:

Rule of Law:

An employee does not have an absolute right to have their grievance taken to arbitration. A union breaches its statutory duty of fair representation only when its conduct toward a member is arbitrary, discriminatory, or in bad faith.

Facts:

In mid-1959, Benjamin Owens, an employee of Swift & Company and a member of the National Brotherhood of Packinghouse Workers (the Union), went on sick leave for high blood pressure.
After a long rest, Owens was certified as fit to resume his heavy labor job by his family physician and another outside doctor.
Upon his return to work, Swift's company doctor concluded Owens's blood pressure was still too high, and on January 8, 1960, Swift permanently discharged Owens for health reasons.
Owens sought the Union's help, and a grievance was filed on his behalf challenging the discharge.
The Union processed the grievance through the fourth of five steps in the collective bargaining agreement's procedure, but Swift continued to deny the grievance.
To gather stronger evidence for potential arbitration, the Union sent Owens to a new physician at the Union's expense in February 1961.
The report from this physician did not support Owens's claim that he was fit for his job.
Based on this unfavorable medical evidence, the Union's executive board voted not to take the grievance to arbitration, concluding it lacked sufficient merit.

Procedural Posture:

Benjamin Owens filed suit against the union officers in the Circuit Court of Jackson County, Missouri, a state trial court.
Following a jury trial, a verdict was returned in favor of Owens, awarding him compensatory and punitive damages.
The trial judge set aside the verdict and entered judgment for the union on the ground that the National Labor Relations Board (NLRB) had exclusive jurisdiction.
Owens appealed, and the Kansas City Court of Appeals (an intermediate appellate court) affirmed the trial court's judgment.
Owens's estate appealed to the Supreme Court of Missouri, the state's highest court, which reversed the lower courts and directed reinstatement of the jury's verdict.
The union officers (petitioners) sought and were granted a writ of certiorari by the Supreme Court of the United States.

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Issue:

Does a union breach its statutory duty of fair representation when, in good faith and in a nonarbitrary manner, it concludes that a particular grievance is without merit and decides not to pursue it to arbitration?

Opinions:

Majority - Mr. Justice White

No. A union does not breach its duty of fair representation merely by settling a grievance short of arbitration, provided its decision is not arbitrary, discriminatory, or in bad faith. First, federal and state courts have jurisdiction over duty of fair representation suits and are not preempted by the National Labor Relations Board (NLRB), as the duty was judicially developed and leaving it exclusively to the NLRB could leave injured employees without a remedy. Second, the standard for a breach of this duty requires more than proof that the underlying grievance was meritorious; it requires a showing that the union's conduct was arbitrary, discriminatory, or in bad faith. Unions must be given discretion to screen grievances and settle those that lack merit to prevent the grievance process from being overburdened. Here, the Union diligently processed the grievance, sought additional medical evidence at its own expense, and only decided against arbitration when that evidence proved unfavorable. This conduct was not arbitrary or in bad faith. Finally, if a breach were proven, damages must be apportioned: the employer is liable for damages from the contract breach, while the union is only liable for any increase in damages caused by its failure to process the grievance.

Dissenting - Mr. Justice Black

Yes, under these circumstances the employee should have a remedy. The majority's holding creates an insurmountable obstacle for an employee with a meritorious grievance by requiring them to prove not only that the employer breached the contract but also that the union breached its duty of fair representation. This rule allows a wrongdoing employer to hide behind the union's good-faith, but incorrect, decision not to arbitrate. An employee should either be able to sue the employer for breach of contract after attempting to exhaust contractual remedies, or the union should have an absolute duty to take all serious grievances to arbitration. The Court's decision leaves a wrongfully discharged employee like Owens, whose claim was found to be meritorious by a jury, completely remediless.

Concurring - Mr. Justice Fortas

The judgment should be reversed, but on different grounds. A claim that a union has breached its duty of fair representation is an unfair labor practice charge that falls under the exclusive jurisdiction of the National Labor Relations Board (NLRB). The preemption doctrine should apply, and courts should not have jurisdiction over this type of suit. These matters involve the subtleties of union-employee relationships and are precisely the kind of issues Congress intended the expert agency, the NLRB, to handle. By allowing courts to hear these cases, the majority ventures into a complex area best left to the Board and creates a confusing standard for judges and juries to apply.

Analysis:

This landmark decision establishes the governing standard for the union's duty of fair representation (DFR) in grievance handling, defining a breach as conduct that is 'arbitrary, discriminatory, or in bad faith.' It solidifies the 'hybrid § 301/DFR' action, requiring an employee to prove a union's DFR breach as a prerequisite to suing an employer for breach of a collective bargaining agreement where contractual remedies were not exhausted. The ruling balances the collective interests of the union in managing the grievance process against the rights of individual employees, giving unions significant discretion to settle or dismiss grievances. Finally, the case sets the crucial principle of apportioning damages between the employer and the union, holding that the union is only liable for the increase in damages its breach may have caused, not for the underlying harm from the employer's contract violation.

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