Case Name: Colleen LEE v. RHODE ISLAND COUNCIL 94, A.F.S.C.M.E., AFL-CIO, Local 186 v. Town of Burrillville, by and through its Treasurer, John Mainville
Court: Supreme Court of Rhode Island
Jurisdiction: Rhode Island
Decision Date: 2002-05-16
Citations: 796 A.2d 1080
Docket Number: No. 2000-368-APPEAL
Parties: Colleen LEE v. RHODE ISLAND COUNCIL 94, A.F.S.C.M.E., AFL-CIO, Local 186 v. Town of Burrillville, by and through its Treasurer, John Mainville.
Judges: Present: WILLIAMS, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
Reporter: West's Atlantic Reporter, Second Series
Volume: 796
Pages: 1080–1091

Head Matter:
Colleen LEE v. RHODE ISLAND COUNCIL 94, A.F.S.C.M.E., AFL-CIO, Local 186 v. Town of Burrillville, by and through its Treasurer, John Mainville.
No. 2000-368-APPEAL.
Supreme Court of Rhode Island.
May 16, 2002.
David W. Campbell, Providence, for Plaintiff.
Paul M. Giacobbe, Warwick, Andrew B. Prescott, Providence, for Defendant.
Present: WILLIAMS, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

Opinion:
OPINION
PER CURIAM.
This case came before the Supreme Court on March 5, 2002 on the appeal by the plaintiff, Colleen Lee (plaintiff or Lee) from the grant of summary judgment in favor of the defendants, Rhode Island Council 94 of the A.F.S.C.M.E., Local 186 (union or Council 94) and the Town of Burrillville, by and through its treasurer, John Mainville (town or Burrillville). A single justice of this Court issued an order directing the parties to appear and show cause why the issues they raised should not be summarily decided. After argument of counsel and a review of the memo-randa of the parties, we conclude that cause has not been shown. Therefore, we proceed to decide this appeal at this time.
Lee was employed by the town as an administrative aide from January 1987 through • November 1993, when she was terminated for alleged misconduct. Lee, with the assistance of Council 94, instituted a grievance procedure contesting her termination. After the town manager rejected the grievance, Council 94 indicated that it intended to undertake arbitration of Lee's termination; however, the business agent for Local 186 failed to make a timely demand for arbitration as set forth in the collective bargaining agreement. According to the record, the union business agent testified at a deposition that he gave the request for arbitration to a secretary the day after the grievance was denied and did not think about it again. As a result, the arbitrator denied and dismissed the arbitration on the ground that it was not timely. The plaintiff instituted suit against the union, alleging a breach of the duty of fair representation. Council 94 filed a third-party complaint against the town seeking indemnification against any potential liability for plaintiffs wrongful termination.
Significantly, after her efforts to be reinstated were rebuffed, Lee sought to collect unemployment security benefits from the Department of Employment and Training. The initial denial of benefits by a department referee (DET referee) was affirmed by the Board of Review of the Department of Employment and Training (DET) and incorporated by reference in the decision of DET. The DET referee concluded that the claimant was discharged under disqualifying circumstances within the meaning of G.L.1956 § 28-44- 18 of the Rhode Island Employment Security Act. The DET referee specifically found that the proved misconduct in connection with the work in this case was "the willful disregard of the interest of one's employer." Thereafter, plaintiff sought judicial review of DET's decision pursuant to G.L.1956 § 42-35-15, the Administrative Procedures Act. In a written decision, a judge of the District Court, based on the record before him, affirmed the decision of DET and concluded that there was legally competent evidence to support DET's findings that Lee was discharged for misconduct amounting to "the willful disregard of the interest of one's employer."
The plaintiff moved for summary judgment concerning the claim of breach of the duty of fair representation, and Council 94 and the town filed cross motions for summary judgment. In a written decision, the hearing justice granted summary judgment to Council 94 and the town and denied relief to plaintiff. Although defendants raised the defense of res judicata arising from the decision of DET, that denied Lee unemployment benefits, the hearing justice failed to address this issue in his decision.
Duty of Fair Representation
In granting summary judgment to defendants, the hearing justice looked to federal law for guidance in determining what constitutes a breach of the duty of fair representation by a labor union. Citing Vaca v. Sipes, 386 U.S. 171, 190, 191, 87 S.Ct. 903, 916, 917,17 L.Ed.2d 842, 857, 858 (1967), the hearing justice concluded that the duty of fair representation is breached upon a showing of arbitrary, discriminatory, or bad faith conduct, or by the handling of a grievance in a "perfunctory" manner and not by union error in failing to process a meritorious grievance. The hearing justice, noting that it was undisputed that the union had failed to make a timely demand for arbitration, found this neglect to be "[hjuman error [and] not indifference." Thus, he concluded there was no evidence that the union acted in an arbitrary, discriminatory, or bad faith manner; but rather, Council 94 was guilty of mere negligence that did not amount to a breach of the duty of fair representation.
In Belanger v. Matteson, 115 R.I. 332, 341, 346 A.2d 124, 131 (1975), this Court first addressed the duty owed by a labor union to its members and adopted the federal rule that, as the exclusive representative of all the employees in a given class, a labor union is under a duty to fairly and adequately represent the interests of all those whom it represents. This duty extends to the resolution of disputes by means of grievance and arbitration. "The duty upon the Union here is to ' in good faith and in a nonarbitrary manner, make decisions as to the merits of particular grievances,' and, if it decides to pursue a grievance, it must not do so in a perfunctory manner." Id. (quoting Vaca, 386 U.S. at 194, 87 S.Ct. at 919, 17 L.Ed.2d at 860). We recognize that unions are not mandated to provide perfect representation or even representation that is free of negligence. See Achilli v. John J. Nissen Baking Co., 989 F.2d 561, 563 (1st Cir.1993). Further, mere negligence has been held to be insufficient to substantiate a claim for breach of the duty of fair representation. United Steelworkers of America v. Rawson, 495 U.S. 362, 372-73, 110 S.Ct. 1904, 1911, 109 L.E.2d 362, 375 (1990). Throughout this litigation the union has maintained that it was guilty only of negligence and therefore cannot be found to have violated the duty of fair representation. However, the testimony of the business agent that he handed the request to a secretary and never thought of it again is evidence that Lee's arbitration was handled in a perfunctory manner. Further, the penalty imposed upon Lee by the employer was termination of her employment with the town, including loss of all seniority, salary and benefits. Given these high stakes, Lee's interest in pursuing her right to arbitration was compelling. We are not convinced that under the circumstances presented in this case, the failure to perform the ministerial act of a timely demand for arbitration amounts to mere negligence. When the neglect of the union completely extinguishes the employee's right to a determination of the merits of her termination, we conclude that the failure by the union to take such a basic step as a timely filing to contest the most significant sanction available to an employer is an example of arbitrary and perfunctory conduct that amounts to unfair representation. Accordingly, we sustain plaintiffs appeal and vacate the decision of the hearing justice. However, in order to recover against the union, plaintiff must establish, by a preponderance of the evidence that an arbitrator would have ruled in her favor and set the termination aside.
Collateral Estoppel
The defendants assert that principles of collateral estoppel bar the relitigation of plaintiffs claim and argue that plaintiffs termination was found to be for "proved misconduct" by DET, such that Lee cannot recover against the union for breach of the duty of fair representation. "This Court has held that the doctrine of collateral estoppel prevents the relitigation of an issue actually litigated and determined between the same parties" or those in privity with them. Wilkinson v. The State Crime Laboratory Commission, 788 A.2d 1129, 1141 (R.I.2002). Under our well settled rules, collateral estoppel is applicable when there is "'an identity of issuesf,] the prior proceeding [has] resulted in a final judgment on the merits[,] and the party against whom the collateral estoppel is sought must be the same as or in privity with the party in the prior proceeding.' " Id. (quoting Commercial Union Insurance Co. v. Pelchat, 727 A.2d 676, 680 (R.I.1999)). Our review of the record convinces us that all three elements necessary for the application of collateral estoppel are present in this case: first, the town contested Lee's eligibility for unemployment benefits and presented evidence sufficient for a fact-finder to conclude that she was terminated for "proved misconduct," second, this finding culminated in a final judgment and, finally, Lee is the party against whom the collateral estoppel is sought. Thus, we conclude that the finding that Lee was terminated for "proved misconduct" is conclusive and may not be relitigated. This does not end the inquiry, however, because under our law an arbitrator is free to modify the penalty imposed by the employer and fashion what he or she considers to be the more appro priate remedy. General Laws 1956 § 28-9-1 provides in relevant part as follows:
"Unless the parties agree otherwise in writing that the arbitrator shall have no authority to modify the penalty imposed by the employer in the arbitration of matters relating to the disciplining of employees, including, but not limited to, termination, suspension, or reprimand, the arbitrator shall have the authority to modify the penalty imposed by the employer and/or otherwise fashion an appropriate remedy." (Emphasis added).
Thus, an arbitrator, in municipal employment arbitration, is vested with statutory authority to set aside the penalty imposed by the employer and fashion an appropriate remedy. Except in certain narrow circumstances, this Court has recognized this grant of statutory authority to an arbitrator that modified the penalty imposed by the employer. In Rhode Island Brotherhood of Correctional Officers v. State, 643 A.2d 817, 822 (R.I.1994), we reversed a decision of the Superior Court that vacated an arbitrator's award that reinstated an employee of the Department of Corrections and held that the issue of whether the termination was for just cause was clearly an arbitrable grievance that should therefore be accorded a deferential standard of review.
This Court has recognized that there are certain narrow circumstances involving critical aspects of the exercise of state power in which a supervisor "must be allowed to act in a manner free of the constraints of the CBA[.]" However, we have limited those situations to questions that interfere with the power of the employer to perform an essential aspect of its responsibilities. Id. Accordingly, we conclude that res judicata arising from DET's decision that the plaintiff was terminated for proved misconduct is a final determination not subject to relitigation before the arbitrator. However, the question of whether an arbitrator, aided by a complete record, may have fashioned a more appropriate remedy in accordance with his statutory authority was not finally determined and could have been litigated by Lee, but for Council 94's negligent and perfunctory handling of her demand for arbitration.
Conclusion
For the reasons set forth herein, we sustain the appeal of the plaintiff and vacate the judgment entered by the Superior Court. The papers in this case are remanded to the Superior Court for further proceedings consistent with this opinion.
. We note that in his decision the District Court judge made additional factual findings as follows, "the court finds that the conduct of the claimant evinces such a willful and wanton disregard of the town of Burrillville's interests as is found in deliberate violations and disregard of standards of behavior which the employer has a right to expect of his employee." Since it is well settled that judicial review of agency decisions is limited to questions of law and the reviewing court may not make factual findings, we deem this finding to be a nullity. See Bunch v. Board of Review, Rhode Island Department of Employment and Training, 690 A.2d 335, 337 (R.I. 1997) (judicial review of agency decisions is limited to a review of the record to determine whether there is legally competent evidence to support the administrative decision). Therefore, we decline to accord the preclusive effect of collateral estoppel to findings the tribunal is without authority to make.