Case Name: Robert E. O'DELL v. INTERNATIONAL PAPER COMPANY
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1973-06-11
Citations: 280 So. 2d 913
Docket Number: No. 52589
Parties: Robert E. O’DELL v. INTERNATIONAL PAPER COMPANY.
Judges: SANDERS, C. J., dissents for the reasons assigned by SUMMERS, J.
Reporter: Southern Reporter, Second Series
Volume: 280
Pages: 913–921

Head Matter:
Robert E. O’DELL v. INTERNATIONAL PAPER COMPANY.
No. 52589.
Supreme Court of Louisiana.
June 11, 1973.
Rehearing Denied Aug. 20, 1973.
Stewart & Stewart, Dan W. Stewart, III, Minden, Madison, Files, Garrett, Brandon & Hamaker, H. Flood Madison, Jr., James P. Madison, Monroe, for defendant-respondent.
Henry G. Hobbs, Stephen R. Burke, Minden, for plaintiff-applicant.

Opinion:
BARHAM, Justice.
Plaintiff Robert E. O'Dell injured his back in the scope and course of his employment with International Paper Company, Container Division, Springhill, Louisiana, on May 13, 1964. The injury proved to be of a permanent and total nature. On May 14, 1964, defendant began paying plaintiff $54.00 per week in benefits: $35.00 as the maximum payment required by R.S. 23:1202 (as amended in 1956) for workmen's compensation, and $19.00 as supplemental payment made pursuant to an agreement between plaintiff's union and defendant.
Defendant discontinued the $19.00 supplemental payments on April 10, 1965, when plaintiff's injuries were determined to be total and permanent. However, it continued the $35.00 per week payments for the statutory period, 400 weeks, under R.S. 23:1221(2).
Plaintiff sued International Paper on October 6, 1967, for the remaining 354 weeks of supplemental payments of $19.00 per week which it allegedly owed him. Plaintiff contends that the right to receive the supplemental payments is tied to the right to receive workmen's compensation; both types of payments are paid directly by defendant, which is self-insured for workmen's compensation liability.
International Paper defended on the bases that the supplemental payments were due only for 26 weeks, and that plaintiff's exclusive remedy was the arbitration procedure agreed upon by the defendant and the plaintiff's union.
The district court concluded that plaintiff was not required to submit his claim to arbitration. It also found that the 26 weeks' limitation did not apply to supplemental benefits, and ordered defendant to pay O'Dell the additional $19.00 per week during the period of his disability. The appellate court reversed, holding that the grievance procedure was plaintiff's exclusive remedy, that he had failed to exhaust it, and that his claim was thus considered settled. At relator's request we granted writs to review the decision of the Court of Appeal, 262 So.2d 101.
The procedure governing the arbitration of disputes is set out in a document entitled "Labor Agreement, Georgetown-Springhill Plants, Contract Years 1963-65". Plaintiff originally contended that the supplemental benefit payments were analogous to wages and thus were exempt from arbitration under the express provision of the labor agreement that "The matter of wages is not to be a subject of arbitration". Nonetheless, following the filing of an exception of prematurity by defendant on November 2, 1967, on the ground that the grievance procedures had not been com plied with, O'Dell attempted to get the union to arbitrate the dispute. On January 24, 1968, Shelby Phillips, the union representative, wrote to E. P. Dennehy, assistant manager of the industrial relations department of International Paper, asking whether the arbitration procedure applied to O'Dell's case. On February 1, 1968, a formal complaint was filed. This grievance was denied by the company, and no further action was taken by the union.
Since the union, by the terms of the contract, is the sole bargaining agent for the employees, plaintiff now contends that he is entitled to pursue his grievance in the courts because of the perfunctory manner of the union in handling the complaint, we think that plaintiff's contention has merit. By the terms of the grievance procedure, the-union is the agent for the processing of complaints. Section VII (B) of the labor agreement reads: "It is understood and agreed that a Local Union has the right to process a complaint on behalf of any employee or group of employees represented by it." In this instance the union pursued the matter only to the first stage and then let it drop. Plaintiff should not be left without a remedy because of the union's wrongful refusal to prosecute his claim. The Court of Appeal erred in holding that plaintiff had failed to exhaust the grievance procedure. O'Dell did all that was permitted him under the bargaining contract and all that was required of him under the rule promulgated by the United States Supreme Court in Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed. 2d 842 (1967):
" However, because these contractual remedies have been devised and are often controlled by the union and the employer, they may well prove unsatisfactory or unworkable for the individual grievant. The problem then is to determine under what circumstances the individual employee may obtain judicial review of his breach-of-contract claim despite his failure to secure relief through the contractual remedial procedures.
"We think that another situation when the employee may seek judicial enforcement of his contractual rights arises if, as is true here, the union has sole power under the contract to invoke the higher stages of the grievance procedure, and if, as is alleged here, the employee-plaintiff has been prevented from exhausting his contractual remedies by the union's wrongful refusal to process the grievance.
Since the union was negligent in its processing of the grievance, plaintiff is thus entitled to pursue his claim in the courts according to the Vaca rule.
As to the matter of supplemental benefits, in the 1954 contract negotiations between the union and International Paper the discrepancy between the benefits received for non-work-related injuries and work-related injuries was pointed out. At that time the benefits for non-work-related injuries compensated by health insurance were greater than those paid for workmen's compensation injuries. As a result of this discrepancy, a provision was inserted in the 1954 contract to correct the situation. It read as follows:
"In those states where the Workmens Compensation for occupational injury results in payments of less than $28.00 weekly, the company will pay the difference between $28.00 weekly and the weekly Workmens Compensation due. This will apply only during the period an employee loses time from work because of such an occupational injury and does not apply to any settlements because of death, dismemberment, partial or permanent disabilities." (Emphasis here and hereafter has been supplied.)
The amount received as supplemental benefits was increased from time to time so that at the time of plaintiff's injury the total was $54.00 a week ($35.00 for work men's compensation and $19.00 in supplemental benefits).
The defendant now contends that the company's health insurance policy limit of 26 weeks of benefits applies to the supplemental payments made with workmen's compensation. However, no document in the 1954 contract, or any subsequent contract, shows such a limitation. Defendant's witness Martin J. Walter, of the industrial relations department of International Paper, testified that such a limit was intended to be incorporated by reference, but admitted there was no express agreement. He also admitted that he was not present at the 1954 contract negotiations and said that he had in fact been hired only in 1966.
Walter also testified that there were at least six other instances at the Springhill plant where employees were compensated with supplemental benefits in excess of 26 weeks. Billy Jennings, personnel supervisor of the Springhill plant, testified that one claimant had been paid for one and a half to two years. B. M. Thompson, general manager of the plant, also testified that some workmen's compensation claimants had received supplemental benefits for periods exceeding 26 weeks. The inconsistency of the company's position is . further evidenced by the fact that both the workmen's compensation and the supplemental benefits were paid entirely by International Paper as a self-insurer; its health insurer paid nothing to the workmen's compensation claimants.
The only valid limitation on the supplemental benefits is that found- in the contract itself: " This will apply only during the period an employee loses time from work because of such an occupational injury and does not apply to any settlements because of death, dismemberment, partial or permanent disability." There was no settlement in this case, and thus plaintiff was entitled to supplemental benefits during the period of his injury.
In summary, the Court of Appeal erred in holding that plaintiff had not exhausted his grievance remedies. Plaintiff had presented his claim to the union, the agent for processing complaints, which then prosecuted the grievance only perfunctorily. This wrongful refusal by the union clearly brings plaintiff under the rule of Vaca v. Sipes, supra; he is thus entitled to pursue his claim in the courts.
International Paper's contention that supplemental benefits to workmen's compensation claimants are limited to 26 weeks is also without merit. The company was a self-insurer for both such payments. The only limit on the payments is that found in the contract itself, which is specifically confined to settlements. Walter's testimony that the insurance policy limit of 26 weeks was intended to be incorporated by reference into the labor contract is unacceptable in view of the fact that he was not present at the contract negotiations and in fact admitted that the 26 weeks' limit had not been observed.
For the reasons assigned the judgment of the Court of Appeal is reversed, and the judgment of the district court reinstated. All costs are cast against the defendant.
SANDERS, C. J., dissents for the reasons assigned by SUMMERS, J.
SUMMERS, J., dissents and assigns reasons.
MARCUS, J., dissents for reasons assigned by SUMMERS, J.