Court Opinion

ID: 9521908
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:14:50.98795+00
Date Added: 2024-06-11T13:01:25.074157
License: Public Domain

SULLIVAN, Judge,
dissenting.
The wrongful discharge case before us involves a collective bargaining contract and is governed by federal law. Thompson v. Modernfold Industries (1978) 1st Dist., 175 Ind.App. 686, 373 N.E.2d 916.
The majority opinion relies upon a trilogy of cases from the United States Supreme Court between 1974 and 1984: Alexander v. Gardner-Denver Co. (1974) 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147; Barrentine v. Arkansas-Best Freight System, Inc. (1981) 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641; and McDonald v. City of West Branch, Mich. (1984) 466 U.S. 284, 104 S.Ct. 1799, 80 L.Ed.2d 302. My dissent is prompted by a more recent United States Supreme Court decision, Gilmer v. Interstate/Johnson Lane Corp (1991) — U.S. -, 111 S.Ct. 1647, 114 L.Ed.2d 26. The Gilmer Court held that an Age Discrimination in Employment discharge claim was properly subjected to compulsory arbitration and noted that “in recent years” various statutory claims were held subject to enforceable arbitration. Ill S.Ct. at 1652. The cases cited were all subsequent to Alexander, Barrentine, and McDonald.
Justice White’s majority opinion noted that as a general proposition,
“[hjaving made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.” 111 S.Ct. at 1652, quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985) 473 U.S. 614, 628, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444.
In the case before us, the burden is upon the claimant, i.e. the Commissioner of Labor, to show that Congress intended to preclude waiver of a judicial forum for resolution of an allegedly retaliatory discharge involving a IOSHA report made by the employee, Bougher. In discerning whether such intention is reflected in the statutory scheme, the Gilmer Court made clear that “questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.” 111 S.Ct. at 1652, quoting Moses H. Cone Memorial Hospital v. Mercury Construction Corp. (1983) 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765.
Indiana policy gives similar deference favoring methods of dispute resolution which do not require full access to the judicial system. We are all cognizant of the impetus toward, and the need for, alternative dispute resolution. To this end, much legislative, judicial and private-sector input has been given to a solution to the litigation explosion. In the Preamble to the formal Indiana Rules for Alternative Dispute Resolution, our Supreme Court acknowledges that “the interests of the parties can be preserved in settings other than the traditional judicial dispute resolution method.” It would appear, therefore, that the fear expressed in earlier United States Supreme Court cases concerning a basic inadequacy or unfairness in the arbitration process has been largely dispelled.
Gilmer had argued in his appeal that arbitrators do not command the power to award broad equitable relief which courts possess, i.e., “to grant such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter....” 29 U.S.C.A. § 626(b). The Fourth Circuit, in an opinion which was affirmed by the Supreme Court decision, supra, observed: “Arbitrators enjoy broad equitable powers. They may grant whatever remedy is necessary. ... Arbitrators may, for instance, order reinstatement....” Gilmer v. Interstate/Johnson Lane Corp. (1990) 4th Cir., 895 F.2d 195, 199. In EEOC actions under 29 U.S.C.A. 626(b), as in Gilmer, reinstatement and back wages are within the scope of affordable relief. See, e.g., Tennes v. Mass., Dept. of Revenue (1991) 7th Cir., 944 F.2d 372. It must be noted that the law which controls us in this regard, in the instant case, differs from the law which is applicable to Indiana school corporation collective bargaining arbitration. In the school contract disputes, courts have held that the arbitrator’s authority to fashion *1235relief is extremely limited. See Gary Teachers Union Local No. 4, American Federation of Teachers v. Gary Community School Corporation of Indiana By and Through its Bd. of School Trustees (1987) 3d Dist. Ind.App., 512 N.E.2d 205, and cases therein cited.
The Fourth Circuit concluded in Gilmer that Alexander, Barrentine, and McDonald were inapposite because in none of the three did the court give consideration to the “federal policy favoring arbitration”. 895 F.2d at 201. The court also pointed out that “the more recent trilogy” of the Supreme Court, i.e., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., supra, 473 U.S. 614, 105 S.Ct. 3346; Shearson/American Express, Inc. v. McMahon (1987) 482 U.S. 220, 107 S.Ct. 2332, 96 L.Ed.2d 185; and Rodriguez de Quijas v. Shearson/American Express, Inc. (1989) 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526, all relied upon later by the Supreme Court in affirming the Fourth Circuit decision, rejected arguments which formed the underlying rationale of Alexander, Bar-rentine, and McDonald. This rationale can be described as a basic distrust of the arbitration system and a strong preference for judicial resolution of statutory claims.
It appears that Justice White, in crafting an opinion commanding a majority in Gil-mer, felt that the transition from the philosophy reflected in Alexander, Barren-tine, McDonald could not be easily or tactfully made without giving some deference to those decisions in the form of points of distinction. The principle distinction drawn was that contract-based claims differ from statutory claims. The distinction is tenuous at best and is simply without foundation.
It is suggested that an arbitrator may only resolve issues which arise from the employment contract itself, and for that reason has no authority to decide whether a particular discharge is violative of statutory discrimination provisions. I agree that the arbitrator’s prerogatives are circumscribed by the collective bargaining contract iri question, but that contract carries within it the anti-discrimination policies which underlie the statutory claim sought to be asserted by the Commissioner of Labor here.
It is unquestioned that labor contracts may not contain discriminatory provisions. Chrapliwy v. Uniroyal, Inc. (1977) N.D.Ind., 458 F.Supp. 252. It is equally true that anti-discrimination provisions of statutes are read into every contract, including labor contracts. This conclusion is necessitated by the principle that existing law is read into every contract as if the statutory provision were expressly incorporated within the terms of the contract. Evansville-Vanderburgh School Corporation v. Moll (1976) 264 Ind. 356, 344 N.E.2d 831; Ethyl Corporation v. Forcum-Lannom Associates, Inc. (1982) 4th Dist. Ind. App., 433 N.E.2d 1214. Accordingly, matters of discrimination in employment terminations are arbitrable ¿nd within the resolution prerogative of collective bargaining arbitrators.
Be that as it may, the substantial dilution of Alexander, Barrentine and McDonald is clearly contained within the recognition that arbitration focuses upon the resolution of specific disputes between parties, just as does judicial resolution of such matters.
Although the Fourth Circuit observed that arbitration under collective bargaining, as here, might jeopardize the protections to the individual claimant if he was represented by the labor union, I do not subscribe to the view that collective bargaining arbitration is presumed to be suspect and unfair. I am unable to subscribe to the determinative effect given to the speculation posed in Alexander, supra, 94 S.Ct. at 1024 n. 19, also found in Barren-tine and McDonald, that “the interests of the individual employee may be subordinated to the collective interests of all employees in the bargaining unit.” To be sure, such subordination of interests may occur. However, if such occurrences predominated or were the rule rather than the exception, a provision for binding arbitration with union representation under a collective bargaining agreement would necessarily be held invalid as contrary to public policy. See Sheet Metal Workers Local Union No. *123620 v. Baylor Heating and Air Conditioning, Inc. (1989) 7th Cir., 877 F.2d 547; Freeman v. Local Union No. 135, Chauffeurs, Teamsters, Warehousemen and Helpers (1984) 7th Cir., 746 F.2d 1316.
In the event that a particular arbitration has been tainted by misconduct or less than fair representation of the employee’s interests, recourse is available. Harrison v. Chrysler Corp. (1977) 7th Cir., 558 F.2d 1273; Grimes v. Louisville and Nashville R. Co. (1984) S.D.Ind., 583 F.Supp. 642, aff'd 767 F.2d 925, cert. denied (1986) 476 U.S. 1160, 106 S.Ct. 2280, 90 L.Ed.2d 722.
This scenario is clearly contemplated in Indiana. In Thompson v. Modernfold Industries, supra, 373 N.E.2d at 916, the court held that a discharged employee could not avail himself of the judicial process although his union had requested, but had never obtained, arbitration of the grievance. The employer’s motion to dismiss the complaint had been granted by the trial court and our First District affirmed stating:
“There is no evidence which would suggest that Modernfold and the union were conspiring against plaintiffs so as to render their contractual remedies futile, as was the case in Landaw v. Tucker Freight Lines, Inc., supra [148 Ind.App. 48, 263 N.E.2d 756 (1970)]. Likewise, plaintiffs introduced no evidence to show that the union arbitrarily or in bad faith refused to proceed to arbitration. Finally, credible testimony was introduced by Modernfold to show that the union was given the opportunity to arbitrate the issue as to the timeliness of the arbitration request, and after consideration withdrew its complaint.
Plaintiffs have failed to show that the trial court, as a matter of law, arrived at an erroneous conclusion. Therefore the trial court’s decision must be affirmed.” 373 N.E.2d at 923.
In the case before us, the Commissioner of Labor has not demonstrated, or even suggested, that the arbitration process was tainted.
The foregoing case analysis and chronology leads to my conclusion that the federal law makes appropriate and applicable an employee-employer agreement to make arbitration of employment termination final and binding. Except when fraud, collusion, misconduct, or unfair union representation has been demonstrated, the binding nature of the arbitration decision precludes resort to a judicial forum for litigation of' the same wrongful discharge claim, whether founded upon an allegation of discrimination or otherwise.
An argument that a claimant may bypass or waive a mandatory grievance and arbitration process by filing a civil action was rejected in Serstel Corporation v. Gibbs (1981) 3d Dist.Ind.App., 417 N.E.2d 372. It would follow, conversely, that a claimant may not by filing a civil action thereby avoid a defense that the employee has failed to exhaust exclusive grievance and arbitration procedures. In Gibbs, the court noted that in Rosen v. Eastern Airlines, Inc. (1968) 5th Cir., 400 F.2d 462, cert. denied (1969) 394 U.S. 959, 89 S.Ct. 1307, 22 L.Ed.2d 560, discharged airline flight attendants, having previously and unsuccessfully submitted to the non-mandatory grievance procedure, were barred from again litigating the matter through the courts. A similar result should obtain in this case.
The majority opinion here reasons that the Alexander trilogy rationale necessitates a holding that principles of res judi-cata and collateral estoppel are not applicable to arbitration determinations. My view is to the contrary.
Res judicata principles are applicable to arbitration awards. Sheet Metal Workers Local 20 v. Baylor Heating and Air Conditioning Co. (1988) S.D.Ind., 688 F.Supp. 462, aff'd 877 F.2d 547. This premise may be deduced from the fact that federal and state arbitration statutes provide that, unless an aggrieved party files a Motion to Vacate an arbitration award within 90 days, the award is confirmed by operation of law. I.C. 34-4-2-12 (Burns Code Ed. 1986). The premise also follows merely from the contract provision which, with some exceptions, makes the arbitration decision final and binding.
*1237The majority here sees no significance in the Gilmer decision. At page 1233 in footnote 1, the majority suggests that to the extent that the Alexander, Barrentine, and McDonald line of reasoning was undermined by Gilmer, it was resurrected by Atchison, Topeka & Sante Fe Ry. Co. v. Buell (1987) 480 U.S. 557, 107 S.Ct. 1410, 94 L.Ed.2d 563. It should be noted, however, that although Buell was decided after the Mitsubishi Motors case, supra, it was decided some four years before Gilmer, as well as before the other two cases relied upon in Gilmer. In my view, therefore, Gilmer has not been diluted by Buell.
More importantly, however, Buell supports the rationale contained in Gilmer and the other cases which I find persuasive. Buell involved an FELA action brought in the federal district court, notwithstanding the Railway Labor Act which contained provision for binding arbitration. The Ninth Circuit Court of Appeals held that the employment harassment claim made by Buell in federal court was not subject to arbitration and for that reason the law suit was appropriate. Buell v. Atchison (1985) 9th Cir., 771 F.2d 1320, 1323-24. However, in Buell, the claim had never been subjected to arbitration. Accordingly, Buell had not had his claim “litigated” twice, as did Bougher in the case before us. Furthermore, the FELA is more in the nature of our Workers Compensation provisions. Both pieces of legislation were designed to supplant common law liability of an employer to an employee for injury caused by the negligence of the employer. In keeping with that purpose, the Federal Employers’ Liability Act expressly prohibits employers from entering into any contract which would limit FELA liability. In this regard, therefore, the wrongful discharge claim made by Bougher is wholly unlike the FELA claim made by Buell.
These points of distinction, although significant, are not nearly so compelling as the fact that in Buell, the Supreme Court recognized and unmistakably, though not explicitly, approved the Ninth Circuit’s position which held that wrongful discharge cases fall within the exclusive domain of the grievance procedures and binding arbitration.
The case before us involves a wrongful discharge claim which was filed after the claimant had lost that claim in arbitration. This wrongful discharge claim, even under Buell, would not be cognizable in the judicial forum.
For all the foregoing reasons I dissent from the decision and opinion of the majority. I would affirm the summary judgment entered against the Commissioner of Labor.