Lucero v. UNM Bd. of Regents, 278 P.3d 1043

Defendants UNM Board of Regents and UNMHSC employed Lucero beginning in 2003 as an assistant director; handbook governed his employment.
The handbook contains a two-step internal grievance process for unresolved issues.
Lucero was suspended for 30 days on March 23, 2005 and did not timely file a grievance.
Lucero was terminated on September 9, 2005 and did not file a grievance.
Lucero filed suit April 2006 alleging breach of express/implied contracts and wrongful termination based on the handbook.
District court granted partial summary judgment; the appellate court reverses regarding exhaustion of grievance procedures.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether exhaustion of internal grievance procedures is required for breach of contract claims.	Lucero argues grievance procedures are not mandatory.	Lucero must exhaust the handbook procedures before suit.	Yes; substantial compliance required before suit.
Whether permissive language allows bypass of grievance procedures.	The word 'may' permits bypass.	Procedures are mandatory if challenging disciplinary action.	Procedures are mandatory; exhaustion required.

Francis v. Mem’l Gen. Hosp., 104 N.M. 698 (NM Supreme Court, 1986) (exhaustion required where handbook creates rights, limits by terms of manual)
McDowell v. Napolitano, 119 N.M. 696 (NM Supreme Court, 1995) (substantial compliance with grievance process may permit suit)
Barreras v. State Corr. Dep’t, 133 N.M. 313 (NMCA, 2003) (exhaustion doctrine applicable to governmental employment claims)
McGuire v. Cont’l Airlines, Inc., 210 F.3d 1141 (10th Cir., 2000) (summary judgment upheld for failure to exhaust grievance process)
O’Brien v. New England Tel. & Tel. Co., 664 N.E.2d 843 (Mass., 1996) (exhaustion required before breach-of-contract suit over handbook policies)
Neiman v. Yale Univ., 851 A.2d 1165 (Conn., 2004) (grievance procedures serve to conserve judicial resources)