Opinion ID: 1256266
Heading Depth: 3
Heading Rank: 2

Heading: When Can an Arbitration Decision Be Deprived of Its Preclusive Effect?

Text: Collective bargaining agreements generally contain procedures for the settlement of disputes through mutual discussion and arbitration. [T]he grievance machinery under a collective bargaining agreement is at the very heart of the system of industrial self-government.... The processing of disputes through grievance machinery is actually a vehicle by which meaning and content are given to the collective bargaining agreement. [5] As a result, the federal courts generally give effect to the dispute resolution procedures to which a union and an employer have agreed; judicial review of arbitration awards is exceedingly narrow. [6] Employees must exhaust their contractual remedies and they are bound by the results of the agreement's dispute resolution procedures. [7] Nonetheless, the federal courts have created an exception to the general rule of finality, allowing relitigation of those decisions when the employee proves: (1) that the discharge was erroneous; and (2) that the union's breach of its duty of fair representation seriously undermined the arbitral process. [8] If the employee satisfies these two requirements, the employee is entitled to an appropriate remedy against the employer [9] and the union. [10] Hines v. Anchor Motor Freight [11] illustrates this exception to the general rule of finality. The employees in Hines had been discharged for seeking reimbursement for motel expenses in excess of the actual charges sustained by them. [12] Their union carried their grievance to arbitration, and the arbitration committee ruled in the employer's favor. [13] When evidence later surfaced indicating that the motel clerk was in fact the culprit, the employees sued their employer and their union. [14] In addition to asserting a wrongful discharge claim against their employer, the employees claimed that their union had made no effort to ascertain the truth of the charges, and that the Union had violated its duty of fair representation by arbitrarily and in bad faith depriving [them] of their employment and permitting their discharge without sufficient proof. [15] The Supreme Court concluded that the employees could prevail in their hybrid suit if they proved an erroneous discharge and if they proved that the union's breach of duty tainted the arbitration decision. [16] The Court reasoned, Congress has put its blessing on private dispute settlement arrangements provided in collective agreements, but it was anticipated, we are sure, that the contractual machinery would operate within some minimum levels of integrity. [17] If the union's misconduct caused a fundamental [ ] malfunction [18] in the arbitration, the arbitration decision need not stand, for in that event error and injustice of the grossest sort would multiply. [19] Federal law does not necessarily govern this case. The Labor Management Relation Act (LMRA), which governs disputes involving the interpretation of collective bargaining agreements, [20] expressly exempts state and municipal government employers from coverage. [21] But because federal law in this area is well-developed and we have applied federal law in cases in which the state was the employer, [22] we choose to look to federal law in this case, subject to the exception we applied in Casey v. City of Fairbanks. [23] We choose to look to federal authorities because we conclude that they have appropriately resolved the conflict inherent here. That conflict arises out of the tension between the desire for arbitral finality and the plight of union members whose unions have undermined the integrity of the arbitral process. In our view, existing Alaska law does not preclude our choice. And today's case deals not with a claim that a union was merely negligent in representing the employee, but that a union altogether failed to represent him. In applying this rule, we recognize at the outset that its two requirements may overlap at times. Sometimes, but not always, a union's breach may so seriously undermine the integrity of the arbitration process that an erroneous decision is made. [24] Moreover, employees are not entitled to relitigate their terminations merely because they offer newly discovered exculpatory evidence. [25] An erroneous decision is not necessarily proof that the union breached its duty or that the breach seriously undermined the arbitral process. [26] The union argues that Feichtinger cannot show that the arbitration decision was erroneous because he dismissed his case against his employer. Therefore, the union contends that it is entitled to summary judgment as a matter of law. We disagree. The federal courts do not require that the employer be joined in a lawsuit against a union for a breach of the duty of fair representation. [27] The employee may, if he chooses, sue one defendant and not the other; but the case he must prove is the same whether he sues one, the other or both. [28] If Feichtinger successfully proves his allegations against the union, the absence of his employer from his suit will only affect his ability to recover damages flowing from his alleged wrongful discharge. [29] The union is not entitled to summary judgment as a matter of law on this basis.