Opinion ID: 2278775
Heading Depth: 1
Heading Rank: 4

Heading: Exhaustion of Contractual Remedies under the Collective Bargaining Agreement

Text: We agree with Petitioners' position and hold that when Ms. Foster waived arbitration, an integral part of the grievance process, she abandoned her claims for wrongful demotion, termination and breach of contract [24] and therefore abandoned and failed to exhaust all of the contractual remedies provided for in the collective bargaining agreement. Once the Board refused to revive the arbitration proceedings, as it was entitled to do, the Circuit Court was obliged to dismiss the claims. Therefore, the Circuit Court erred in denying Ms. Gazunis and the Board's motion for summary judgment on those claims and in granting the Fosters' motion to consolidate those claims for trial. This Court outlined the rules governing the processing of grievances under collective bargaining agreements in Jenkins, 217 Md. at 561-62, 144 A.2d at 91. We said: The general rule is that before an individual employee can maintain a suit, he [or she] must show that he [or she] has exhausted his [or her] contractual remedies: This rule, which is analogous to the rule requiring the exhaustion of administrative remedies as a condition precedent to resorting to courts . . . is based on a practical approach to the myriad problems, complaints and grievances that arise under a collective bargaining agreement. It makes possible the settlement of such matters by a simple, expeditious and inexpensive procedure, and by persons who, generally, are intimately familiar therewith. . . . The use of these internal remedies for the adjustment of grievances is designed not only to promote settlement thereof but also to foster more harmonious employee-employer relations. Cone v. Union Oil Co., 129 Cal.App.2d 558, 564, 277 P.2d 464, 468 (1954). Thus, if the employee refuses to take even the initial step of requesting the processing of the grievance, he [or she] will not be granted relief in the courts. In that case, Jenkins brought a grievance against her employer for wrongful discharge. Jenkins, 217 Md. at 558, 144 A.2d at 89. She requested that the union send her claim to arbitration but it refused to do so. We explained that arbitration is an integral part of the system of self-government. And the system is designed to aid management in its quest for efficiency, to assist union leadership in its participation in the enterprise, and to secure justice for the employees. It is a means of making collective bargaining work. . . . When it works fairly well, it does not need the sanction of the law of contracts or the law of arbitration. It is only when the system breaks down completely that the courts' aid in these respects is invoked. Jenkins, 217 Md. at 563-64, 144 A.2d at 92 (citations omitted). Even though Jenkins had not exhausted all of her contractual remedies, we held that she was not barred from suing her employer for wrongful discharge because she tried to exhaust her remedies and the union acted arbitrarily and in a discriminatory manner in refusing to send her grievance to arbitration. Jenkins, 217 Md. at 575-76, 144 A.2d at 99. In addition, in DelCostello v. Int'l Broth. of Teamsters, 462 U.S. 151, 163, 103 S.Ct. 2281, 2290, 76 L.Ed.2d 476, 488 (1983), the Supreme Court explained that [i]t has long been established that an individual employee may bring suit against his [or her] employer for breach of a collective-bargaining agreement. . . . Ordinarily, however, an employee is required to attempt to exhaust any grievance or arbitration remedies provided in the collective-bargaining agreement. The Court went on to explain that only when the union representing the employee acts in a discriminatory, dishonest, arbitrary, or perfunctory fashion as to breach its duty of fair representation, may the employee bring his or her claim to court notwithstanding the outcome or finality of the grievance or arbitration proceeding. DelCostello, 462 U.S. at 164, 103 S.Ct. at 2290, 76 L.Ed.2d at 488; see also Dearden v. Liberty Medical Center, Inc., 75 Md.App. 528, 531, 542 A.2d 383, 385 (1988) (holding that an employee cannot maintain a suit against an employer without first showing that he or she has exhausted the available contractual remedies). Respondents contend that Finch, 322 Md. 197, 586 A.2d 1275 (1991), overruled Jenkins, and that, therefore, Ms. Foster did not have to exhaust her remedies before proceeding with the claims, that were subject to the collective bargaining agreement, in court. We disagree. Instead, we interpret Finch as standing for the proposition that the exhaustion of remedies under a collective bargaining agreement is not required when the issues raised by the plaintiff's wrongful discharge claim are not dependent upon an interpretation of the collective bargaining agreement. In Finch, an employee filed a workers' compensation claim due to a workplace injury that required him to miss four months of work. Finch, 322 Md. at 198, 586 A.2d at 1276. When he returned to work, he learned that he was one of several workers who was slated to be laid off. Although Finch was covered by a collective bargaining agreement, he chose not to initiate a grievance pursuant to the agreement but instead filed an action for retaliatory discharge and loss of consortium. Finch claimed that his employer used a layoff procedure as a pretext for firing him in retaliation for filing a workers' compensation claim. Finch, 322 Md. at 199, 586 A.2d at 1276. The employer argued that the case should be dismissed because Finch failed to exhaust his contractual remedies before proceeding in court. We held that there [wa]s no need to resort to arbitration because the issue addressed by arbitration, whether the layoff procedure was accomplished in conformity with the CBA, would not itself be determinative of the wrongful discharge claim. Finch, 322 Md. at 207, 586 A.2d at 1280. In the instant case, the collective bargaining agreement directly governs Ms. Foster's grievances pertaining to wrongful demotion, termination and breach of contract. The collective bargaining agreement states explicitly that [a] suspension, demotion, discharge or other disciplinary action may only be taken against unit members for proper cause, and then outlines the procedures for filing a grievance, defined as a claim by one party that the other party has violated th[e] Agreement. Ms. Foster's argument that she was wrongfully demoted and terminated under the agreement and that the Board breached the agreement is exactly what the collective bargaining agreement was designed to cover; as a result, Finch does not apply. Respondents also contend that the reasoning of Jenkins does not apply because Ms. Foster's collective bargaining agreement explained that the procedure was optional based on its use of the word may. We believe that Respondents' interpretation of the meaning of the word may in the collective bargaining agreement is incorrect. The ordinary meaning of the word may is [t]o be allowed or permitted to, whereas the ordinary definition of the word must is [t]o be required or obliged by law, morality, or custom. Webster's II New College Dictionary 693, 740 (3d ed.2005). In accordance with these definitions, Respondents are correctMs. Foster did not have to complete all four steps of the procedureshe had the option of stopping the grievance process at any point. By stopping the grievance process midstream, however, Ms. Foster waived her right to adjudicate her grievance with the Circuit Court, because, as explained supra, a plaintiff must exhaust all contractual remedies as a condition precedent to seeking judicial relief in the courts. To be certain, she did not have to continue with the grievance procedure if she no longer wanted to have her grievance heard; however, if she wanted to proceed with her grievance, she had to first exhaust her remedies under the collective bargaining agreement. In addition, we agree with Petitioners that the Court of Special Appeals erred in remanding the case to the Circuit Court to determine whether the Board waived its right to arbitrate the claims. In our view, the Board was absolved of its obligation to arbitrate Ms. Foster's grievance when she waived Step Four of the collective bargaining agreement, the arbitration step. The grievance procedure is in place to aid the grievant, in this case, Ms. Foster, to seek informal resolution of her complaints. Once Ms. Foster waived arbitration, the Board was entitled to close the grievance, and, therefore, the Board had no obligation to convince Ms. Foster to continue. The collective bargaining agreement sets forth specific time limits and states explicitly that [a] grievance shall be automatically waived and shall not be subject to further discussion or appeal if the grievant does not process it within any of the stated time limits. When Ms. Foster attempted to revive her arbitration after she had waived it, she was acting beyond the stated time limit of five days. [25] The agreement states clearly that the time limits may only be extended by mutual agreement between the parties, and the Board was under no obligation to extend those time limits. We therefore see no need for the Circuit Court to decide whether the Board waived its right to arbitration because it is clear that the Board, in fact, did not waive arbitration. We hold that the Circuit Court erred in allowing the jury to adjudicate the claims for wrongful demotion, termination and breach of contract because Ms. Foster failed to exhaust her contractual remedies provided for in the collective bargaining agreement.