Lead Opinion
Benjamin H. Smith filed suit in state court under § 301 of the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185, alleging that his employment was wrongfully terminated by Kerrville Bus Company (Kerrville). Kerrville removed the action, then sought and secured summary judgment rejecting Smith’s claims. On the record before us, being unpersuaded of the absence of any dispute as to a material fact and of Kerrville’s entitlement to judgment as a matter of law, we reverse and remand.
Facts
Smith drove a bus for Kerrville for 26 years before his termination on July 2,1979, for “mishandling company property,” specifically, failing to report cash fares. Aftеr his dismissal Smith sought assistance from the Drivers’ Committee, the bus drivers’ collective bargaining representative. Although several Committee members interceded on Smith’s behalf, Kerrville refused to reinstate him. This action ensued.
At the time of Smith’s discharge, a rather exiguous collective bargaining agreement existed between Kerrville and the Drivers’ Committee. Under its terms, the employees were assured of certain routes, or “runs,” assigned pursuant to seniority bids, specific rates of regular and holiday pay calculated according to seniority, bonuses and allowances for meals and other expenses, and sick leave. With the exception of new employees who failed to complete a 90-day probationary period, all employees earned vacation benefits, again computed according to time in grade.
Aside from a provision for biannual meetings of the Drivers’ Committee for the purpose of disposing “of accident and bonus questions, and any other grievances,” the collective bargaining agreement was silent with respect to formal grievance or arbitration mechanisms. It was likewise silent as to grounds for employee discharge.
There was no express reference in the bargaining agreement to the Drivers Rule Book, a manual of safety and disciplinary rules promulgated by the employer and distributed to all employees. The Rule Book expressly states: “A Driver may be disciplined or discharged for violation or infraction of Company rules ... ”, and reiterates throughout that violation of a specific rule “will be grounds for disciplinary action up to and including discharge.” The Rule Book also declares that: “Acts of dishonesty are cause for dismissal.”
Legal Analysis
Kerrville takes the position that since the collective bargaining agreement contains no express provision relating to discharge, under Texas law it may fire Smith at will. Apparently accepting the validity of this rationale, the district court granted Kerr-ville’s motion for summary judgment.
Absent a limiting provision in the employment contract or collective bargaining agreement, an employer may dismiss employees at will. Andrews v. Louisville & Nashville R.R. Co.,
A. Standard of Review
The. inquiry whether a just cause limitation on dismissals may be implied from the language of a collective bargaining agreement presents a question of law for the court, see Lowe v. Pate Stevedoring Co.,
Our review of the district court’s grant of summary judgment is guidеd by Fed.R. Civ.P. 56. Rule 56(c) authorizes summary judgment only where “there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.” In gauging the propriety of a grant of summary judgment, we invoke the same legal standards as those which bind the district court. Nicholas Acoustics & Specialty Co. v. H & M Construction Company, Inc.,
B. Implication of a “Just Cause” Bar to Discharge
We are mindful, as we begin our analysis of the issue presented by the case at bar,
*917 that judicial interpretation of silence in a dоcument ... is always a tricky and controversial undertaking.... This is especially true with labor contracts, since their formation is typically characterized by intense bargaining and the final contract usually represents hard-fought negotiations and compromises. Quite often, employers and unions exchange numerous quid pro quos, giving clauses and rights in direct exchange.
N.L.R.B. v. South Central Bell Telephone Co.,
is more than a contract; it is a generalized code to govern a myriad of eases which the draftsman cannot wholly anticipate .... The collective agreement covers the whole employment relationship. It calls into being a new common law— the common law of a рarticular industry or of a particular plant.... one observer has put it:
“... [I]t is not unqualifiedly true that a collective-bargaining agreement is simply a document by which the union and employees have imposed upon management limited, express restrictions of its otherwise absolute right to manage the enterprise, so that an employee’s claim must fail unless he can point to a specific contract provision upon which the claim is founded. There are too many people, too many problems, too many unforeseeable contingencies to make the words of the contract the exclusive source of rights and duties. One cannot reduce all the rules governing a community like an industrial plant to fifteen or even fifty pages. Within the sphere of collective bargaining, the institutional characteristics and the governmental nature of the collective-bargaining process demand a common law of the shop which implements and furnishes the context of the agreement. We must assume that intelligent negotiators acknowledged so plain a need unless they stated a contrary rule in plain words.”
United Stеelworkers of America v. Warrior’s Gulf Navigation Co.,
Because a collective bargaining agreement is designed to regulate virtually all facets of the employer-employee relationship, and is subject to federal labor law, the construction and application of its terms cannot be narrowly confined by ordinary principles of contract law. See Transportation-Communication Employees Union v. Union Pacific Railroad,
In instances where the language of a collective contract does not explicitly prohibit dismissal except for just cause, arbitrators typically infer such prohibitions from seniority clauses or grievance and arbitration procedures. Summers, Individual Protection Against Unjust Dismissal: Time For A Statute, 62 Va.L.Rev. 481, 499-500 (1976). See Shearson Hayden Stone, Inc. v. Liang,
Several courts, in reviewing an arbitral finding of a “just cause” impediment to discharge, have determined that the arbitrator properly circumscribed the employer’s power to fire by implying an objective limitation from the terms of the labor contract, as amplified by evidence of the parties’ intentions. See e.g., Shearson Hayden Stone, Inc. v. Liang (arbitrator empowered to determine that agreement to arbitrate disputes concerning employee discharges implies just cause requirement); United Food & Commercial Workers International, AFL-CIO, Local Union No. 634 v. Gold Sausage Co.,
In Lowe, we upheld the district court’s finding of an implied just cause provision, stating that this “ ‘limitation upon the employer’s right to discharge its employees should be inferred as a part of the basic fabric of the collective bargaining agreement.’ ”
None of the three premises makes the case. First, I see no logical connection between an employer’s willingness to give senior employees greater economic benefits and his willingness to restrict his right to dischаrge at will employees. Certainly an employer may grant economic rewards without granting greater job security. It does not follow that, when an employer grants one benefit, he necessarily concedes another. For example, every employer has the right to discharge a dishonest employee whether that employee makes $5.00 an hour or $20.00 an hour. In my view, the majority relies on a non sequitur when it infers that the grant of seniority rights creates a right to discharge only for cause.
This court has never held that longevity of employment creates a just cаuse limitation. The contract clause involved in Boone v. Armstrong Cork Co.,
The second basis identified in the majority opinion is the contract language providing for semiannual meetings of the Drivers Committee. It is appropriate to give this provision the most favorable reasonable interpretation possible. Having done so, I am still unable to agree that the provision in any way suggests the existence of a just cause limitation.
The majority cites several cases which involved situations where the parties created a mutual grievance procedure. E.g. Boone; Monaghan. All these cases involved a grievancе procedure in which management as well as labor participated. Arguably, a mutual grievance procedure, like arbitration, is meaningless unless there are some instances in which an employee may not be discharged. If the employer’s discretion to discharge is unlimited, the effect and purpose of arbitration or conciliation are nullified. But that situation does not exist here. In the case at bar, the contract merely provides that labor representatives will hold a meeting among themselves twice a year. There is no obligation for thоse representatives to forward employee grievances to management, or for management to pay any attention if they attempt to do so. The Drivers Committee has at best done nothing more than set out an internal operating procedure of its own. Kerrville has not compromised its freedom to discharge in any way.
Finally, in referring to the rules set out in the Drivers Rule Book, the majority states: “Given the parties’ understanding that certain conduct would furnish cause for termination, it is reasonable to infer that any discharge would be for cause.” In other words, any time an employer enumerates some specific grounds for discipline, he may be held to have impliedly limited his right to discharge to cases where there is just cause. I cannot agree. Listing some reasons for discipline does not mean there must be some reason for discharge. According to the majority, Kerrville would have been better off had it not set out some
the termination of an employee who had established seniority without “just cause,” “reasons therefor,” or designation of certain conduct “warranting discipline,” and that the company may be required, through the grievancе procedure, to justify such terminations.
In an opinion adopted in its entirety by our colleagues of the Eighth Circuit, the trial court refused to imply a just cause requirement where the collective bargaining agreement dealt expressly with the effect of tenure on employee terminations. Young v. Southwestern Bell Telephone Co. Employees with more than three years’ service were accorded the right of pre-dismissal arbitration at the final level of the contract’s grievance machinery, whereas those employed less than three years could pursue only the first two levels prior to disсharge. That the older employees alone could compel arbitration prompted the court to conclude that the employer retained the ultimate authority to discharge individuals with less than three years’ service after granting them access to the initial levels of the grievance process. For purposes of discussion, however, the court assumed that:
if ... an employer and a labor union enter into a collective bargaining agreement giving large consideration to seniority and length of service but which is silent as to the employer’s right tо hire and fire, there may properly be read into the contract an implied covenant not to discharge an employee except for cause.
C. The Case at Bar
Focusing on the collective bargaining agreement presently before us, we note first that the allocation of work assignments, pay, vacation, and sick leave are controlled by length of service. Probationary employees could not collect accrued vacation pay upon dismissal or resignation; those with more than 90 days’ service could do so. Finally, the Drivers’ Committeе was required to convene every six months to handle accident and bonus questions or “any other grievances,” presumably including those relating to discharge.
Because another relevant document refers specifically to discipline and discharge, we need not decide whether the language of the labor contract alone militates against a legal conclusion that management surrendered its traditional prerogative to fire at will. By proscribing various forms of conduct in the Drivers Rule Book, Kerrvillе imparted fair notice to its employees that infraction of any rule delineated therein
It is well-established that § 301 must be broadly cоnstrued to encompass any agreement, written or unwritten, formal or informal, which functions to preserve harmonious relations bétween labor and management. See Retail Clerks Int'l Ass'n v. Lyons Dry Goods, Inc.,
Although a mutual recognition of the Drivers Rule Book is not implicit in the terms of the collective bargaining agreement, compare Sanderson v. Ford Motor Co.,
REVERSED and REMANDED for further proceedings consistent herewith.
Notes
. In granting summary judgment, the district court did not provide any written or oral findings of fact or conclusions of law. From the court’s colloquy with counsel at hearing, and its request for the lower court’s ruling in Lowe v. Pate Stevedoring Co.,
. Courts are not bound by arbitral rulings, nor are the arbitrators themselves obliged to follow the rule of stare decisis, Lowe v. Pate Stevedoring Co. Though we attach no substantive weight to these rulings in arriving at a decision on the merits, we believe that they serve as reliable indicators of the state of the common law of industrial relations in the area of wrongful discharge.
. According to the Drivers Rule Book, failure to comply with the rule prescribing appropriate conduct in case of an аccident is a ground for discharge, as is the infraction of any of the various safety or disciplinary rules.
. In light of our treatment of the question of implication, we do not reach the issue of whether Smith’s conduct justified his discharge. Should a just cause provision ultimately be found to reside in the collective bargaining agreement, however, we must caution against a determination that such conduct provides just cause as a matter of law. In Boone, we suggested that an implied just cause restriction “might be a requirement of ‘objectively justifiable cause,’ defined as what a reasonаble person would find sufficient.” Boone v. Armstrong Cork Co.,
Dissenting Opinion
dissenting:
No matter how favorably to Smith all the evidence in this record is viewed, it does not show me any just cause limitation on Kerr-
The majority does not expressly hold that a just cause limitation is implicit in every collective bargaining agreement. However, this is the import of its decision. I would not presume a just cause limitation here. The employer ought not be required to bargain for a negating proviso such as “The employer reserves the right to discharge any employee for any reason or no reason at all.”
A court should not rewrite the parties’ contract. Rather, it should look to the objectively manifеsted intent of the parties without bias in favor of either party. Because I believe the majority has failed to do this, I respectfully dissent.
. The first paragraph in the Drivers Rule Book reads:
1. POLICY; It is the policy of the Company to have only reasonable and necessary rules. The duties and responsibilities of the Driver are prescribed by the rules contained in this Rule Book, and by such additional rules, orders, instructions, bulletins and directives as may be issued by Management.
(emphasis supplied).
. In Lowe v. Pate Stevedoring Co.,
Lead Opinion
ON PETITION FOR REHEARING AND SUGGESTION FOR REHEARING EN BANC
The Petition for Rehearing is DENIED and no member of this panel nor Judge in regular active service on the Court having requested that the Court be polled on rehearing en banc, (Federal Rules of Appellate Procedure and Local Rule 35) the Suggestion for Rehearing En Banc is DENIED.
For the reasons assigned in his dissent, Chief Judge Clark would grant panel rehearing.
