Court Opinion

ID: 9428981
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:25:22.540631+00
Date Added: 2024-06-11T17:23:16.639988
License: Public Domain

Justice White,
with whom Justice Marshall, Justice Blackmun, and Justice Rehnquist (except as to Part IV) join,
concurring in the judgment in part and dissenting in part.
The Court holds that an employer who wrongfully discharges an employee protected by a collective-bargaining agreement with an arbitration clause is only responsible for backpay that accrues prior to the hypothetical date upon which an arbitrator would have issued an award had the employee’s union taken the matter to arbitration. All backpay damages that accrue after this time are the sole responsibil*231ity of the union, even where, as here, the union is in no way-responsible for the employer’s decision to terminate the employee. This rationale, which heretofore has been rejected by every Court of Appeals that has squarely considered it,1 does not give due regard to our prior precedents, to equitable principles, or to the national labor policy. I therefore re*232spectfully dissent. For the following reasons, I believe that the employer should be primarily liable for all backpay.
HH
In Smith v. Evening News Assn., 371 U. S. 195, 200-201 (1962), we held for the first time that an individual employee may bring a §3012 suit against his employer for breach of a collective-bargaining agreement. If, as in Smith, the agreement does not contain an arbitration provision, the employee’s right to bring suit is unqualified, and, in such a case, the employer unquestionably is liable for any and all backpay that is due.
On the other hand, if, as in the present case, the agreement does contain an arbitration provision, it is much more difficult for an employee to maintain a §301 action against his employer for any backpay whatsoever. This is because Republic Steel Corp. v. Maddox, 379 U. S. 650 (1965), established that contractual grievance and arbitration procedures must be exhausted before an employee files a §301 suit. The Republic Steel rule was adopted to protect the integrity of the collective-bargaining process, and to further the national labor policy of encouraging private resolution of disputes arising over the interpretation and implementation of collective-bargaining agreements. See Clayton v. Automobile Workers, 451 U. S. 679, 686-687 (1981).
Noting that contractual remedies sometimes prove to be “unsatisfactory or unworkable for the individual grievant,” we considered in Vaca v. Sipes, 386 U. S. 171, 185 (1967), the question “under what circumstances the individual employee may obtain judicial review of his breach-of-contract claim de*233spite his failure to secure relief through the contractual remedial procedures.” We found that one situation in which “the employee may seek judicial enforcement of his contractual rights” is where the union has the sole power to invoke the higher stages of the grievance procedure, and “the employee-plaintiff has been prevented from exhausting his contractual remedies by the union’s wrongful refusal to process the grievance.” Ibid. An employee may maintain a §301 suit under these circumstances because, in enacting the laws imposing a duty of fair representation on unions, Congress did not intend “to shield employers from the natural consequences of their breaches of bargaining agreements by wrongful union conduct in the enforcement of such agreements.” Id., at 186.
Vaca made clear that, with respect to an employer, the only consequence of a union’s breach of a fair-representation duty to an employee is that it provides the employee with the means of defeating the employer’s “defense based upon the failure to exhaust contractual remedies,” ibid., in a § 301 suit. The Court explicitly stated that the union’s violation of its statutory duty in no way “exempted] the employer from contractual damages which he would otherwise have had to pay,” id., at 196, and that the employer could not “hide behind the union’s wrongful failure to act.” Id., at 197.
In Hines v. Anchor Motor Freight, Inc., 424 U. S. 554 (1976), we reiterated that a union’s breach of duty to an employee does not shield an employer from damages that it would otherwise owe. Hines involved employees whose grievances had been fully arbitrated. The arbitrator had upheld the discharge as rightful. Nevertheless, the Court held that the employee might still maintain a § 301 action if he could establish that his union had breached its duty of representing him fairly during the arbitral proceedings, even though the employer was in no way responsible for the alleged union malfeasance. Id., at 569. The employer pro*234tested that, since its conduct during the arbitration was blameless, it should be able to rely on the finality of the arbi-tral award. We rejected this argument, pointing out that the employer had “surely played its part in precipitating [the] dispute” by discharging the plaintiff-employee in the first place. Ibid. As in Vaca, with respect to the employer, the only consequence of the union’s breach was that it “remove[d] the bar” to the employee’s right to bring a § 301 action.3 424 U. S., at 567.
Thus, under our previous holdings, as far as the employer is concerned, a union’s breach of a fair-representation duty does no more than remove the procedural exhaustion-of-remedies bar to a § 301 suit by an aggrieved employee. The union’s breach does not affect the employer’s potential liability, including backpay liability, if the employee prevails in the § 301 judicial proceedings by showing that the employer had breached its contract in discharging him.
That the union is not primarily liable for backpay is readily apparent upon close inspection of the facts in Vaca. The employee in that case had been discharged in January 1960. Sometime after February 1961, the union refused to take the matter to arbitration, and, in February 1962, the employee filed suit, claiming that the union’s refusal to go to arbitration violated his rights. The trial began in June 1964, and the matter was not finally adjudicated until this Court rendered its decision in February 1967. See Vaca, 386 U. S., at 173-176. Had the union opted in favor of arbitration, an *235award almost certainly would have been forthcoming long before the judicial suit had even proceeded to trial.4 Nevertheless, the Vaca Court commented that “all or almost all” of the employee’s damages would be attributable to the employer, not the union. Id., at 198. Had the Court intended to hold the union responsible for backpay accruing after the hypothetical arbitration date, presumably well over half of this liability would have been attributed to the union.
Of course, this does not mean that the union escapes liability for the “natural consequences,” Vaca, supra, at 186, of its wrongful conduct. The damages that an employee may recover upon proof that his union has breached its duty to represent him fairly are simply of a different nature than those recoverable from the employer. This is why we found in Vaca that “damages attributable solely to the employer’s breach of contract should not be charged to the union, but increases if any in those damages caused by the union’s refusal to process the grievance should not be charged to the employer.” 386 U. S., at 197-198.
What, then, is the proper measure of the union’s damages in a hybrid § 301/breach-of-duty suit? We considered this question in Czosek v. O’Mara, 397 U. S. 25, 29 (1970), and concluded that, under the Vaca rule, the union is liable in damages to the extent that its misconduct “add[s] to the *236difficulty and expense of collecting from the employer.”5 Czosek reassured unions that they would not be forced to pay damages “for which the employer is wholly or partly responsible.” 397 U. S., at 28-29 (emphasis added).
It is true that, under the Vaca-Czosek rule, the union may sometimes only have de minimis liability, and we unanimously acknowledged this fact in Electrical Workers v. Foust, 442 U. S. 42, 48, 50 (1979). “[T]he damages a union will be forced to pay in a typical unfair representation suit are minimal; under Vaca’s apportionment formula, the bulk of the award will be paid by the employer, the perpetrator of the wrongful discharge, in a parallel § 301 action.” Id., at 57 (Blackmun, J., concurring in result, joined by Burger, C. J., and Rehnquist and STEVENS, JJ.). The Foust majority nevertheless reaffirmed Vaca and, moreover, further insulated unions from liability by holding that punitive damages could not be assessed in an action for breach of the duty of fair representation. In reaching these conclusions, the Court relied on the policy of affording individual employees redress for injuries caused by union misconduct without compromising the collective interests of union members in protecting limited union funds. As in Vaca, considerations of deterrence were deemed insufficient to risk endangering union “financial stability.” 442 U. S., at 50-51.6
*237II
Our precedents notwithstanding, the Court today abandons the Vaca rationale and holds that a union’s breach of duty does far more than simply remove the exhaustion defense in an employee’s § 301 suit against his employer. The union’s breach, even if totally unrelated to the employer’s decision to terminate the employee, now serves to insulate the employer from further backpay liability, as of the hypothetical arbitration date, even though the employer, unlike the union, can stop backpay accretion at any moment it desires, simply by reinstating the discharged employee.
It cannot be denied that, contrary to Vaca and its progeny, under the Court’s new rule, the “bulk of the award” for backpay in a hybrid § 301/breach-of-duty suit will have to be borne by the union, not the employer. In the present case, for example, the jury, which was instructed in accordance with the Court’s new test, assessed $30,000 in compensatory damages against the union, and only $17,000 against the employer. The union should well consider itself fortunate that this dispute proceeded to trial less than three years after the cessation of petitioner Bowen’s employment. Most of the cases of this nature that have been reviewed by this Court have taken the better part of a decade to run their course.7 *238Because the hypothetical arbitration date will usually be less than one year after the discharge, see n. 4, supra, it is readily apparent that, under the Court's rule, in many cases the union will be subject to large liability, far greater than that of the employer, the extent of which will not be in any way related to the union’s comparative culpability. Nor will the union have any readily apparent way to limit its constantly increasing liability.8
Bowen and the Postal Service argue that the employer is not the “cause” of an employee’s lost earnings after the date on which an arbitral decision would have reinstated or otherwise compensated the employee. In the “but for” sense, of course, this is patently false, as the Court concedes. Ante, at 223. But for the employer’s breach of contract, there would be no occasion for anyone to reimburse the plaintiff for lost wages accumulated either before or after a hypothetical arbitration. Furthermore, the consequences of the breach— the discharge without cause — continue to accumulate as long as the employer refuses to reinstate. The union’s failure to arbitrate does not make the discharge and the refusal to reinstate any less wrongful.
Thus, there is no reason why the matter should not be governed by the traditional rule of contract law that a breaching defendant must pay damages equivalent to the total harm suffered, “even though there were contributing factors other than his own conduct.” 5 A. Corbin, Contracts § 999 (1964). The plaintiff need not show the proportionate part played by the defendant’s breach of contract among all the contributing factors causing the injury, and his loss need not be “segregated proportionately.” Ibid. We followed this rule in Czosek, when we determined that an employer must pay the damages if it is “wholly or partly” responsible for the *239plaintiff-employee’s loss. 397 U. S., at 29. Even if the union did not stop the employer from persisting in its breach of contract, as it might have done, conduct of this nature is hardly sufficient to exonerate the employer.
It bears reemphasizing that both before and after the hypothetical arbitration date, the union did not in any way prevent the employer from reinstating Bowen, and that the employer could reinstate him. Under these circumstances, it is bizarre to hold, as the Court does, that the relatively impotent union is exclusively liable for the bulk of the backpay. The Court, in effect, sustains the employer’s protest to the union that “you should be liable for all damages flowing from my wrong from and after a certain time, because you should have caught and rectified my wrong by that time.” Seymour v. Olin Corp., 666 F. 2d 202, 215 (CA5 1982). The employer’s wrongful conduct clearly was the generating cause of Bowen’s loss, and only the employer had the continuing ability to right the wrong and limit liability by reinstating Bowen. The employer has the sole duty to pay wages, and it should be responsible for all back wages to which Bowen is entitled.
The Court finds that its apportionment rule is “consistent with the union’s commitment to the employer under the arbitration clause” of the collective-bargaining agreement. Ante, at 227-228. However, the Court in no way identifies a legitimate source of the union’s “commitment under the arbitration clause” that it will bear exclusive liability for post-arbitration-date backpay. The Court’s finding is grounded on the assumption that the collective-bargaining agreement somehow entitles the employer to rely on the union to bring any wrongful discharge to its attention within the context of the grievance machinery. But the typical collective agreement, including the one here, contains no language entitling the employer to such reliance. The agreement gives the union the right to raise grievances, but it does not obligate it to do so. And, most assuredly, the agreement in no way ex*240pressly or impliedly grants the employer any rights against the union if the union fails to bring a meritorious grievance to its attention.
Indeed, it is only the union’s statutory duty — implied by the judiciary9 — to employees to provide them with fair representation that in any way obliges the union to take certain grievances to the employer for consideration. The duty of fair representation obliges a union "to make an honest effort to serve the interests of all [bargaining unit] members” fairly and impartially. Ford Motor Co. v. Huffman, 345 U. S. 330, 337 (1953); Wallace Corp. v. NLRB, 323 U. S. 248, 255 (1944); Steele v. Louisville & Nashville R. Co., 323 U. S. 192, 202-203 (1944). It serves as a “bulwark to prevent arbitrary union conduct against individuals stripped of traditional forms of redress by the provisions of federal labor law.” Vaca, 386 U. S., at 182 (emphasis added). The union owes this duty of fair representation to the employees it represents — the duty does not run to the employer, and the Court does not contend otherwise.
Accordingly, neither the collective-bargaining agreement nor the union’s duty of fair representation provides any support for the Court’s conclusion that the union has somehow committed itself to protect the employer, and that the employer has the right to rely on the union to cut off its liability. Contrary to our past cases construing the federal labor law, the Court in effect reads an indemnification provision into the collective-bargaining agreement, even though the employer can and more properly should be required to bargain for such *241a provision, if desired.10 It is a basic tenet of national labor policy that “when neither the collective-bargaining process nor its end product violates any command of Congress, a federal court has no authority to modify the substantive terms of a collective-bargaining contract.” United Mine Workers Health & Retirement Funds v. Robinson, 455 U. S. 562, 576 (1982). See also Carbon Fuel Co. v. Mine Workers, 444 U. S. 212, 218-219 (1979); Porter Co. v. NLRB, 397 U. S. 99, 108 (1970).11
The Court also contends, ante, at 226-227, that its rule will better enable grievance procedures to provide the uniform and exclusive method for the orderly settlement of employee grievances, because a contrary rule “could well affect the willingness of employers to agree to arbitration clauses as they are customarily written.” Why the Court’s rule will not “affect the willingness” of unions to agree to such clauses is left unexplained. More importantly, since the practical consequence of today’s holding is that unions will take many unmeritorious grievances to arbitration simply to avoid expo*242sure to the new breach-of-duty liability, the Court’s rule actually impairs the ability of the grievance machinery to provide for orderly dispute resolution.
I thus cannot agree with the Court’s judgment imposing backpay liability on the union. Lost wages are among the “natural consequences,” Vaca, swpm, at 186, of an employer’s wrongful discharge of an employee. Precedent, equity, and national labor policy do not impose on the union primary responsibility for all backpay accruing after its failure to arbitrate.12
Ill
There are at least two situations in which a union should bear some liability for backpay. First, as recognized in Vaca, the union and the employer may be jointly and severally liable where the union has affirmatively induced the employer to commit the alleged breach of contract. 886 U. S., at 197, n. 18. Second, even in a case such as this one, in which the union is not responsible for the discharge, the union should be secondarily liable. That is, if, due to a breach of duty by his union, an employee is unable to collect the backpay to which he is entitled from his employer, the entity primarily liable, he should then be entitled to collect from the union.13
*243This rule of primary and secondary liability prevails in the law of trusts, and should be equally applicable in the present context.14 Just as an individual employee may bring a suit for breach of contract against his employer if, but only if, the union has breached its duty of fair representation in determining not to pursue the grievance on the employee’s behalf, a trust beneficiary may sue to enforce a contract entered into on his behalf by the trustee if, but only if, the trustee “improperly refuses or neglects to bring an action against the third person.” Restatement (Second) of Trusts §282(2) (1959); G. Bogert & G. Bogert, Law of Trusts and Trustees §869 (2d ed. 1982); 4 A. Scott, Law of Trusts §282.1 (3d ed. 1967). If the beneficiary is able to collect in full from the primary obligor, the trustee should not be monetarily liable. See, e. g., Pollard v. Pollard, 166 Cal. App. 2d 698, 701, 333 P. 2d 356, 357 (1959), However, the trustee must pay if his wrongful action causes a loss to the beneficiary, such as where the claim was originally enforceable, but the obligor has become insolvent, or where the claim has become barred by the statute of limitations. 2 Scott, supra, § 177.
The Court of Appeals for the Fourth Circuit correctly applied a similar rule in the labor context in Harrison v. United Transportation Union, 530 F. 2d 558 (1975), cert. denied, 425 U. S. 958 (1976). In that case, the plaintiff-employee’s union breached its duty of fair representation by allowing the plaintiff’s claim against the employer to become time-barred. The court held that, under these circumstances, the union should be responsible for the lost wages the plaintiff might have recovered from the employer but for the union’s mis*244conduct. 530 F. 2d, at 562. See also Nedd v. United Mine Workers of America, 400 F. 2d 103, 106-107 (CA3 1968).
No such exception to the rule I would apply is applicable in this case. The union did not incite Bowen’s discharge, and Bowen is able to recover in full from the Postal Service. Therefore, I would affirm the judgment of the Court of Appeals to the extent that it holds the union not liable for the backpay to which Bowen is entitled.
<1
I disagree with the Court of Appeals, however, to the extent that it holds the Service not liable for the $30,000 assessed by the District Court against the union, thus precluding Bowen from recovering this amount from either defendant. The parties stipulated that Bowen lost approximately $47,000 in wages prior to trial.15 The District Court, based upon the jury’s special verdict,16 found the employer liable for $17,000 of these damages, and the union liable for the remainder. Although the Court of Appeals held that Bowen’s lost earnings were an exclusive obligation of the Service, the court, in a footnote belatedly added to its opinion, refused to amend the judgment and assess the Service for the $30,000 that the District Court erroneously charged against the union. This was done on the erroneous ground that Bowen did not file a cross-appeal against the Postal Service for the $30,000. 642 F. 2d 79, 82, n. 6 (CA4 1981).
*245The purport of Vaca v. Sipes is to provide employees with effective remedies to make them whole. 386 U. S., at 185-186. See Electrical Workers v. Foust, 442 U. S., at 48-49; id., at 54 (Blackmun, J., concurring in result). The footnote added by the Court of Appeals had exactly the opposite effect: it deprived Bowen of his full recovery and did so in a procedurally questionable manner. The Court of Appeals found no infirmity in the total quantum of the District Court’s judgment in Bowen’s favor. It reversed only that aspect of the judgment that was of no real concern to Bowen, the apportionment of the burden of the award between the union and the Postal Service. Yet the Court of Appeals frustrated Bowen’s entitlement to complete recovery by holding that Bowen’s failure to appeal prevented the reopening of the award against the Postal Service.
Bowen had no cause to challenge this judgment. Under the law, he had no right to a joint and several liability award against the defendants. Because the “Union played no part in [the Postal Service’s] alleged breach of contract and since [the Postal Service] took no part in the Union’s alleged breach of duty, joint liability for either wrong would be unwarranted.” Vaca v. Sipes, 386 U. S., at 197, n. 18. Thus, from Bowen’s standpoint, apart from collectibility, the legal effect of the judgment could not have been improved. Whether or not he had some technical basis for appealing a judgment in his favor, neither the facts of this case nor the concerns of national labor policy required him to appeal to protect his judgment. To rule otherwise would impose upon appellate courts the burden of additional appeals from favorable decisions prosecuted by litigants attempting to insulate their judgments from actions like that taken here by the Court of Appeals. In this respect, the Court and I are in agreement. See ante, at 217-218, n. 7.
Accordingly, I would affirm the Court of Appeals’ judgment that the union was not liable for backpay damages, but I would reverse the remainder of the judgment and remand *246the case with instructions that the District Court be directed to enter judgment against the Postal Service for the entire amount of Bowen’s backpay loss.

 In addition to the opinion below in the present case, 642 F. 2d 79 (CA4 1981), see Seymour v. Olin Corp., 666 F. 2d 202 (CA5 1982), and Milstead v. International Brotherhood of Teamsters, Local Union 957, 649 F. 2d 395 (CA6), cert. denied, 454 U. S. 896 (1981). These three are the only Court of Appeals decisions rendering square holdings on the issue. However, also consistent with the view advanced in this dissent are Wyatt v. Interstate & Ocean Transport Co., 623 F. 2d 888 (CA4 1980) (assessing the employer for all backpay), and Soto Segarra v. Sea-Land Service, Inc., 581 F. 2d 291, 298 (1978), where the First Circuit specifically noted that, in accordance with Vaca v. Sipes, 386 U. S. 171 (1967), and Czosek v. O’Mara, 397 U. S. 25 (1970), the District Court “did not charge the union for any of the back pay due appellee but instead awarded $5,750 in attorney’s fees proximately caused by the Union’s failure to process his grievance.” See also De Arroyo v. Sindicato de Trabajadores Packinghouse, 425 F. 2d 281, 289-290 (CA1), cert. denied, 400 U. S. 877 (1970), where the employer was held liable for all backpay, even though a jury had found that 40% of this amount accrued because of the union’s wrongful conduct. See Feller, A General Theory of the Collective Bargaining Agreement, 61 Calif. L. Rev. 663, 671-672 (1973).
The Court incorrectly states, ante, at 218-220, n. 8, that the Courts of Appeals have not been consistent on this issue. No Court of Appeals has ever required a union to pay backpay in a case such as this. In fact, the only two cases the Court cites that even suggest the possibility of union liability for backpay are St. Clair v. Local No. 515, 422 F. 2d 128 (CA6 1969), and Harrison v. Chrysler Corp., 558 F. 2d 1273 (CA7 1977). In St. Clair, the court did not purport to decide the issue; it stated only that the union certainly would not be liable for anything more than backpay less interim earnings, “and perhaps for less,” because, in light of Vaca, “the Supreme Court has strongly implied that . . . the increment of damages caused by the union’s breach of duty is virtually de minimis.” 422 F. 2d, at 132. In Harrison, the court did make the comment that “a union which breaches its duty of fair representation may be sued by an employee for lost pay attributable to the breach,” 558 F. 2d, at 1279, but no union was even a party to the litigation, so this dicta can hardly be regarded as authoritative.

 § 301 of the Labor Management Relations Act, 29 U. S. C. § 185. Because the employer in the present case is the United States Postal Service, petitioner Bowen’s action technically arises under § 2 of the Postal Reorganization Act, 39 U. S. C. § 1208(b), which is identical to § 301 in all relevant respects.

 Justice Stewart filed a two-paragraph concurring opinion in Hines, in which he stated that the employer should not be liable for backpay accruing between the time of the “tainted” arbitral decision and a subsequent “untainted” determination that the discharges were, after all, wrongful. 424 U. S., at 572-573. No other Member of the Court joined Justice Stewart’s observations, and his opinion was founded on the employer’s good-faith reliance on a favorable arbitral decision. Here, the Court goes far beyond Justice Stewart and grants the employer the right to rely on a nonexistent arbitration, even though the union is by no means under a duty to the employer to take any grievances to arbitration. See infra, at 239-241.

 Statistics developed by the Federal Mediation and Conciliation Service (FMCS) show that, in 1981, the average time between the filing of a grievance and the rendering of an arbitral award was 230.26 days. For the years between 1972 and 1980, the average varied from a high of 268.3 in 1977 to a low of 223.5 in 1975 and 1978. 34 FMCS Ann. Rep. 39 (1981).' See generally Ross, The Well-Aged Arbitration Case, 11 Ind. & Lab. Rel. Rev. 262 (1958); Seitz, Delay: The Asp in the Bosom of Arbitration, 36 Arb. J.(n. s.) 29 (Sept. 1981). Also, in some industries, labor and management have agreed to expedited arbitral proceedings that can further reduce the average time. See Sandver, Blaine, & Woyar, Time and Cost Savings through Expedited Arbitration Procedures, 36 Arb. J.(n. s.) 11 (Dec. 1981).

 Czosek arose under the Railway Labor Act (RLA), 45 U. S. C. § 151 et seq. (1976 ed. and Supp. IV), which permits an employee whose union fails to process his grievance to press it himself. §§ 153 First (i), (j) (1976 ed., Supp. IV). The Court seeks to limit Czosek to the RLA context, on the theory that, because the employee in Czosek could have filed a grievance without union assistance, the union’s default in that case did not “increase the damages that the employer otherwise would have had to pay.” Ante, at 228-230. However, the Czosek opinion nowhere suggests that this distinction is relevant, and it cites only Vaca in support of its finding on this point. We reaffirmed in Electrical Workers v. Foust, 442 U. S. 42, 50, n. 13 (1979), that the Czosek rule was an application of “Vaca’s apportionment principle.”

 Even though Foust requires that punitive damages not be assessed against a union, the Vaca rule nevertheless provides for a credible deterrent against wrongful unioh conduct. Attorney’s fees and other litigation *237expenses have been assessed as damages against unions, because such damages measure the extent by which the union’s breach of duty adds to the difficulty and expense of collecting from the employer. See, e. g., Seymour v. Olin Corp., 666 F. 2d, at 215; Scott v. Teamsters Local 377, 548 F. 2d 1244 (CA6), cert. denied, 431 U. S. 968 (1977).

 See, e. g., Clayton v. ITT Giljillan, 623 F. 2d 563, 565 (CA9 1980), rev’d in part sub nom. Clayton v. Automobile Workers, 451 U. S. 679 (1981) (discharge in February 1975; we remand for trial in May 1981); Electrical Workers v. Foust, supra, at 43-45 (discharge in February 1971; trial in May 1976; Court of Appeals’ judgment in 1978; this Court rules in 1979); Hines v. Anchor Motor Freight, Inc., 424 U. S., at 556-559 (discharges in 1967; District Court grants summary judgment in 1973; we remand for trial in March 1976); Czosek v. O’Mara, 397 U. S., at 26 (discharge in 1962; we remand for trial in February 1970); Vaca v. Sipes, 386 U. S., at 175-176 (discharge in January 1960; trial begins in June 1964).

 While remaining disturbingly vague about the point, the Court at least concedes that a union may shift some or all backpay responsibility back to the employer by “bringing] its default to the employer’s attention.” Ante, at 227, n. 15.

 Although no statute expressly imposes a duty of fair representation upon unions, we have held, beginning with Steele v. Louisville & Nashville R. Co., 328 U. S. 192 (1944), that “the exclusive agent’s statutory authority to represent all members of a designated unit includes a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.” Vaca, 386 U. S., at 177. See generally Aaron, The Duty of Fair Representation: An Overview, in The Duty of Fair Representation 8 (J. McKelvey ed. 1977).

 See Edwards, Employers’ Liability for Union Unfair Representation: Fiduciary Duty or Bargaining Reality?, 27 Lab. L. J. 686, 691-692 (1976).

 The Court correctly reaffirms, ante, at 224, that a collective-bargaining agreement “is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate.” Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574, 578 (1960). This means that “[g]aps may be left to be filled in by reference to the practices of the particular industry and of the various shops covered by the agreement,” because “[m]any of the specific practices which underlie the agreement may be unknown, except in hazy form, even to the negotiators.” Id., at 580-581. The Court does not suggest that the union is obliged by any “industry practice” to protect the employer from backpay liability, or that such an obligation can be inferred in any other way from the “gaps” in the agreement. The Court’s holding therefore inserts a new substantive term into the agreement, which is precisely what we have forbidden the lower courts to do in our previous holdings. The Court’s mere belief that an employer “should” be able to rely on the union because there is “no unfairness to the union in this approach,” ante, at 226, is not a valid justification for the holding.

 The Court asserts, ante, at 227, n. 15, that the view advanced in this dissent would allow the union and the employee “to agree to a settlement pursuant to which the union would acknowledge a breach of its duty of fair representation in exchange for the employee’s undertaking to look to his employer for his entire recovery.” I seriously doubt, however, that a union will lightly “concede” a breach of its fair-representation duty to bargaining unit employees, particularly since it may be liable for the plaintiff’s costs of collection, including attorney’s fees in not inconsiderable amounts. See n. 6, supra. Furthermore, the Court’s position, by exposing the union to even greater liability, may well exert correspondingly greater pressure on the union to settle, with or without an acknowledgment of breach of duty, leaving the employer to defend the action alone.

 The Court takes the exact opposite tack. It holds that the union is primarily responsible for post-hypothetical-arbitration-date backpay, and that the employer is secondarily liable for this amount. Ante, at 223, n. 12.

 It is not always proper to import common-law principles into federal labor law. See NLRB v. Hearst Publications, Inc., 322 U. S. Ill, 120-129 (1944). In the present context, however, the trust analogy appears to be appropriate. See Cox, Rights under a Labor Agreement, 69 Harv. L. Rev. 601, 652 (1956); Jenkins v. Wm. Schluderberg-T. J. Kurdle Co., 217 Md. 556, 559-560, 144 A. 2d 88, 90 (1958).

 The parties stipulated that Bowen lost $45,389.87 in back wages and fringe benefits from the time of discharge until trial. 3 Record 315. Bowen’s counsel misstated this figure as $47,000 in his closing argument, and the jury apparently acted on this basis. Id., at 550. No party has complained of the $1,610.13 discrepancy.

 The union timely objected to the District Court’s instructions to the extent they allowed the jury to apportion any compensatory damages to the union. Id., at 611-612. The union renewed its objection in its motion for judgment notwithstanding the verdict, or in the alternative to alter or amend the judgment. 1 Record, Item 37, ¶ 2. The Court quotes the relevant material. See ante, at 215, n. 3.