Neal v. POTOMAC EDISON COMPANY

Moore, J., delivered the opinion of the Court. The question for decision is whether the trial court erred in granting motions for summary judgment in favor of the defendant-appellees, Potomac Edison Company ("Edison”) (sometimes referred to below as "Employer”) and Local Union 771 of the International Brotherhood of Electrical Workers ("Union”) against the plaintiff-appellant, an employee of Edison and member of said Union. The action below was precipitated by appellant’s termination by Edison because of his "sickness and absenteeism” and the Union’s subsequent refusal to go forward with arbitration on the issue of appellant’s termination. We find that triable issues are present and, therefore, reverse the motions for summary judgment and remand for trial.

I Appellant, Martin Neal, was employed by the appellee, Potomac Edison, from August 1969 to March 1978 as a bulldozer and crane operator at the R. Paul Smith Power Station in Williamsport, Maryland. As an employee at that plant, appellant was a member of the appellee Union. On March 6,1978, his employment was terminated by Edison as a result of "excessive loss of time due to sickness and absenteeism.” 1 Suffice it to say, Edison, on appeal, presents ³⁵⁵ a picture of appellant’s work record somewhat bleaker than it really was while the appellant, leaning to the other extreme, finds little, if any, fault on his own part. * 2 Pursuant to the collective bargaining agreement entered into between Edison and the Union, effective at all times applicable herein, appellant filed a grievance under Article VII with Edison concerning his termination and, with the assistance of the Union, proceeded without success through the third step of the grievance procedure. 3 Thereafter, he requested that the Union submit his claim to arbitration ³⁵⁶ pursuant to the fourth step in the grievance process. 4 The Union membership, however, voted against submitting appellant’s claim to arbitration. Appellant thereafter filed a declaration, subsequently amended, against Edison and the Union seeking compensatory damages totalling $45,000.

In the amended declaration, appellant claimed that Edison wrongfully terminated his employment by considering his past work record at Edison. Furthermore, he alleged that both Edison and the Union breached the provisions of the collective bargaining agreement by refusing to refer his grievance to arbitration and that the Union’s refusal to go forward with ³⁵⁷ arbitration was discriminatory, arbitrary and in bad faith due largely to the Union’s alleged announcement to its members that it would cost $2,000 to take appellant’s grievance to arbitration — a figure which appellant characterized as a "grossly and recklessly exaggerated estimate.” Edison demurred and moved for summary judgment to the amended declaration. The Union also demurred. The trial court, in its Memorandum Opinion, first addressed the defendant-appellees’ demurrers and concluded that Neal alleged sufficient facts to state a cause of action against both the Union and the employer.

The demurrers, therefore, were overruled and no question is raised on appeal concerning them. However, the court went on to decide Edison’s motion for summary judgment which was granted as to both Edison and the Union. As to the employer, the court ruled that the Union properly exercised its discretion in not referring Neal’s grievance to arbitration. It was unnecessary, the court concluded, to reach the issue of Edison’s discharge of Neal under the rule set forth in Vaca v. Sipes, 386 U.S. 171 , 87 S. Ct. 903 , 17 L. Ed. 2d 842 (1967), infra, which held that a wrongfully discharged employee may bring an action against his employer only if he can establish that the Union breached its duty of fair representation.

On appeal, Neal contends that the lower court erred in granting summary judgment and that there was ample evidence from which a jury could have decided that Edison wrongfully discharged him. We agree with the appellant that the court erred in granting summary judgment for the appellees. II The parties are in agreement as to the principles of law herein applicable. We begin, therefore, with the rule that before a wrongfully discharged employee may bring an action against his employer, he must first establish that the Union breached its duty to him of fair representation.

Vaca v. Sipes, 386 U.S. 171 , 87 S. Ct. 903 , 17 L. Ed. 2d 842 (1967). ³⁵⁸ This breach is established by showing that the Union processed the employee’s grievance in a manner which was arbitrary, discriminatory or in bad faith. Id. 386 U.S. at 190 , 87 S. Ct. at 916 , 17 L. Ed. 2d at 857 . In Griffin v. International Union of United Auto Workers, 469 F.2d 181, 183 (4th Cir. 1972), the Court delineated this three-pronged standard: "A union must conform its behavior to each of these three separate standards. First, it must treat all factions and segments of its membership without hostility or discrimination.

Next, the broad discretion of the union in asserting the rights of its individual members must be exercised in complete good faith and honesty. Finally, the union must avoid arbitrary conduct. Each of these requirements represents a distinct and separate obligation, the breach of which may constitute the basis for civil action.” In Griffin, supra, Judge Sobeloff went on to explain the holding of Vaca : "That case [Vaca v. Sipes] declared that a union is accorded considerable discretion in the handling and settling of grievances. The individual employee has no absolute right to insist that his grievance be pressed through any particular stage of the contractual grievance procedure.

A union may screen grievances and press only those that it concludes will justify the expense and time involved in terms of benefiting the membership at large. Encina v. Tony Lama Boot Co., 448 F.2d 1264 (5 Cir. 1971). In the Vaca decision itself, the Court held that a union did not necessarily breach its duty of fair representation when it refused to take a member’s grievance to arbitration.” (Emphasis added.) The Griffin Court also emphasized the necessity for avoidance of arbitrary behavior in the handling of a grievance based upon a discharge: ³⁵⁹ "While negligence in handling grievances has not been identified as breaching the union’s duty of fair representation, Bazarte v. United Transportation Union, 429 F.2d 868, 872 (3 Cir. 1970), the courts have adopted the position that a union may not arbitrarily ignore a meritorious grievance or handle it in a perfunctory manner. (Citations omitted.) Without any hostile motive of discrimination and in complete good faith, a union may nevertheless pursue a course of action or inaction that is so unreasonable and arbitrary as to constitute a violation of the duty of fair representation.

A union may refuse to process a grievance or handle the grievance in a particular manner for a multitude of reasons, but it may not do so without reason, merely at the whim of someone exercising union authority. A union must especially avoid capricious and arbitrary behavior in the handling of a grievance based on a discharge — the industrial equivalent of capital punishment.” After its decision in Vaca v. Sipes, supra, the Supreme Court again had occasion to address the nature of a Union’s duty of fair representation: "The union’s breach of duty relieves the employee of an express or implied requirement that disputes be settled through contractual grievance procedures; if it seriously undermines the integrity of the arbitral process the union’s breach also removes the bar of the finality provisions of the contract.” (Emphasis added.) Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 567 , 96 S. Ct. 1048, 1058 , 47 L. Ed. 2d 231, 243 (1976), cited in Miller v. Gateway Transportation Co., 616 F.2d 272, 277 (7th Cir. 1980). The Maryland Court of Appeals has also spoken with respect to the Union’s duty of fair representation: "[T]he Union is to consider carefully and fairly the ³⁶⁰ alleged grievances of its members, that it is likewise to exercise its judgment and discretion fairly on behalf of its individual members in determining upon what terms it believes any grievances of theirs should be adjusted and whether such grievances should be carried to arbitration, if negotiations for settlement or adjustment fail.” Jenkins v. Wm. Schluderberg-T.J. Kurdle Co., 217 Md. 556, 564 , 144 A.2d 88, 93 (1958).

See Ostrofsky v. United Steelworkers of America, 171 F. Supp. 782, 793 (1959), aff'd, 273 F.2d 614 (4th Cir. 1960). In the instant case, appellant’s basic contention is that the Union breached its duty of fair representation when its President informed the Union membership (at the meeting when the members were to vote on the issue of whether to submit appellant’s claim to arbitration) that the cost of submitting the grievance to arbitration would be $2,000. Neal argues that this figure was a "grossly and recklessly exaggerated estimate” and resulted in the members casting a 14-12 vote against arbitration of his grievance. The Union contends that even if the appellant could prove that the $2,000 figure was mentioned at the meeting, "there would be no evidence indicating that Local 771 violated its duty of fair representation.” Some additional background material is necessary for an understanding of Neal’s grievance against the Union: In May 1978, about two months after Neal’s termination, the Executive Board of the Union heard appellant’s case in his presence.

It decided that the decision of whether to present appellant’s dispute to an arbitration panel was to be voted upon by the Union membership. It was at the membership meeting, where the voting occurred, that appellant claims the Union failed adequately to represent him. There is disagreement as to what was said at this meeting. Appellant was not present.

He testified in his deposition, however, that someone at the meeting (whom he specifically named) told him