INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS ET AL. v. FOUST
No. 78-38
Supreme Court of the United States
Argued February 26, 1979—Decided May 29, 1979
442 U.S. 42
Laurence J. Cohen argued the cause for petitioners. With him on the briefs were William J. Hickey, Laurence Gold, and George Kaufmann.
Terry W. Mackey argued the cause and filed a brief for respondent.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
This action arises from the failure of petitioner union properly to process respondent‘s grievance alleging wrongful discharge by his employer. The question presented is whether the Railway Labor Act1 permits an employee to recover punitive damages for such a breach of a union‘s duty of fair representation.
I
Respondent, a member of the International Brotherhood of Electrical Workers (IBEW), was injured in March 1970 while working for the Union Pacific Railroad Co. (Union Pacific). He received a medical leave of absence through December 22, 1970. The collective-bargaining agreement between the union and the company required that employees either request an extension before their leave expired or return to work as scheduled. Accordingly, respondent sought to renew his leave in late December. Correspondence between Union Pacific and respondent‘s attorney, however, revealed that the company had not received a doctor‘s statement supporting respondent‘s request. Notwithstanding Union Pacific‘s written assurance on January 25, 1971, that it would await arrival of this document before reviewing respondent‘s
After respondent‘s attorney failed to persuade Union Pacific to reconsider its decision, he wrote the IBEW District Chairman, D. F. Jones, requesting that the union initiate grievance proceedings on respondent‘s behalf pursuant to Rule 21 of the collective-bargaining agreement.2 The letter was dated March 26, and was received by Jones on March 27, 52 days after the dismissal. Although Jones was aware that Rule 21 required presentation of grievances “within 60 days from the date of the occurrence on which the claim . . . is based,” see n. 2, supra, and that this deadline was imminent, he did not immediately prepare a grievance letter. Rather, he contacted the IBEW General Chairman, Leo Wisniski, who insisted that respondent personally request in writing the union‘s assistance. Wisniski drafted a letter stating that the union could not “handle” the claim until such an authorization was received. App. to Brief for Respondent 8a. Instead of telephoning respondent or sending the letter directly to him, Wisniski mailed the letter to Jones, who then signed and forwarded it to respondent on April 5, 61 days after the discharge. Without awaiting the requested written authorization, Jones filed respondent‘s claim with Union Pacific on April 6, two days after the time for submission had expired. The claim form had been prepared by Wisniski in Omaha, Neb., sent to Jones in Rawlins, Wyo., and then mailed by Jones to the railroad in Omaha.
Both Union Pacific and the National Railroad Adjustment Board denied respondent‘s claim on the ground that IBEW had not complied with the 60-day filing deadline. Respondent then brought this suit against the union and several of
The Court of Appeals affirmed the District Court‘s judgment in most respects, but remanded the case for consideration of whether the punitive damages award was excessive. 572 F. 2d 710 (CA10 1978).4 It rejected the suggestion of the Court of Appeals for the Third Circuit that punitive damages are impermissible in unfair representation suits,5 and declined to adopt the Eighth Circuit‘s standard, which allows punitive damages only when union officers display malice toward the employee.6 Rather, following the Fourth Circuit, the Court of Appeals ruled that a punitive award is appropriate if a
We granted certiorari to resolve this conflict among the Courts of Appeals as to what if any circumstances justify assessing punitive damages against a union that breaches its duty of fair representation. 439 U. S. 892 (1978).
II
This Court first recognized the statutory duty of fair representation in Steele v. Louisville & Nashville R. Co., 323 U. S. 192 (1944), a case arising under the Railway Labor Act. Steele held that when Congress empowered unions to bargain exclusively for all employees in a particular bargaining unit, and thereby subordinated individual interests to the interests of the unit as a whole, it imposed on unions a correlative duty “inseparable from the power of representation” to exercise that authority fairly. Id., at 202-204; see Humphrey v. Moore, 375 U. S. 335, 342 (1964); Vaca v. Sipes, 386 U. S. 171, 182 (1967); Hines v. Anchor Motor Freight, Inc., 424 U. S. 554, 564 (1976).8 The fair representation doctrine thus serves
The right to bring unfair representation actions is judicially “implied from the statute and the policy which it has adopted,” Steele v. Louisville & Nashville R. Co., supra, at 204, and Congress has not specified what remedies are available in these suits.9 Our function, therefore, is to implement a remedial scheme that will best effectuate the purposes of the Railway Labor Act, recognizing that the overarching legislative goal is to facilitate collective bargaining and to achieve industrial peace. See 323 U. S., at 204; Textile Workers v.
III
Punitive damages “are not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence.” Gertz v. Robert Welch, Inc., 418 U. S. 323, 350 (1974).10 In respondent‘s view, this extraordinary sanction is necessary to vindicate an employee‘s right to fair representation. Because actual damages caused by a union‘s failure to pursue grievances may be de minimis, see Harrison v. United Transportation Union, supra, at 563; St. Clair v. Local Union No. 515, 422 F. 2d 128, 132 (CA6 1969); see also infra, at 50, respondent contends that a strong legal remedy is essential to encourage unfair representation suits and thereby inhibit union misconduct.
We do not doubt that the prospect of lucrative monetary recoveries unrelated to actual injury would be a powerful incentive to bring unfair representation actions. Similarly, the threat of large punitive sanctions would likely affect unions’ willingness to pursue individual complaints. However, offsetting these potential benefits is the possibility that punitive awards could impair the financial stability of unions and unsettle the careful balance of individual and collective interests which this Court has previously articulated in the unfair representation area.
The fundamental purpose of unfair representation suits is to compensate for injuries caused by violations of employees’
The Court in Vaca applied the compensation principle not only to gauge the sufficiency of relief but also to limit union liability. Because an employee can recover in full from his employer for its breach of contract, we reasoned that a union which fails to process a grievance predicated on that breach cannot be held liable for damages attributable to the employ-
This limitation on union liability thus reflects an attempt to afford individual employees redress for injuries caused by union misconduct without compromising the collective interests of union members in protecting limited funds. To permit punitive damages, which, by definition, provide monetary relief “in excess of . . . actual loss,” Scott v. Donald, 165 U. S. 58, 86 (1897), could undermine this careful accommodation. Because juries are accorded broad discretion both as to the imposition and amount of punitive damages, see Gertz v. Robert Welch, Inc., supra, at 349-350; Prosser § 2, pp. 13-14, the impact of these windfall recoveries is unpredictable and potentially substantial. Cf. Hall v. Cole, 412 U. S. 1, 9 n. 13 (1973).14 Such awards could deplete union treasuries,
Additionally, the prospect of punitive damages in cases such as this could curtail the broad discretion that Vaca afforded unions in handling grievances. We there rejected the notion that employees could force unions to process their claims irrespective of the terms of the collective-bargaining agreement, and ruled that a union satisfies its obligation to represent employees fairly if it does not “arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion.” Vaca v. Sipes, 386 U. S., at 191-194. In so holding, the Court stressed that union discretion is essential to the proper functioning of the collective-bargaining system. Union supervision of employee complaints promotes settlements, avoids processing of frivolous claims, and strengthens the employer‘s confidence in the union. Id., at 191-193. Without these screening and settlement procedures, the Court found that the costs of private dispute resolution could ultimately render the system impracticable. Ibid.
Just as unlimited access to the grievance process could undermine collective bargaining, so too the threat of punitive
Acknowledging the “essentially remedial” objectives of the National Labor Relations Act, this Court has refused to permit punitive sanctions in certain unfair labor practice cases, see, e. g., Republic Steel Corp. v. NLRB, 311 U. S. 7, 10-12 (1940); Carpenters v. NLRB, 365 U. S. 651, 655 (1961), and in actions under § 303 of the Labor Management Relations Act,
So ordered.
MR. JUSTICE BLACKMUN, with whom THE CHIEF JUSTICE, MR. JUSTICE REHNQUIST, and MR. JUSTICE STEVENS join, concurring in the result.
The Court now adopts a per se rule that a union‘s breach of its duty of fair representation can never render it liable for
A
Because the duty of fair representation is judicially created, the consequences of its breach necessarily are left to judicial determination. “The appropriate remedy for a breach of a union‘s duty of fair representation,” the Court wrote in Vaca v. Sipes, 386 U. S. 171, 195 (1967), “must vary with the circumstances of the particular breach.” Depending on the circumstances of the particular breach, the Court wrote in Steele v. Louisville & N. R. Co., 323 U. S. 192, 207 (1944), “the statute contemplates resort to the usual judicial remedies of injunction and award of damages.” These cases make clear that a court, seeking a remedy to match the union‘s wrong, has at its disposal the full panoply of tools traditionally used by courts to do justice between parties. Punitive damages, being one of these tools, thus are presumptively available for use in appropriate cases, unless Congress has directed otherwise. Since Congress has never expressly interdicted their use, the Court‘s decision to ban punitive damages from the arsenal necessarily rests upon inference—upon a perception that punitive damages in unfair representation
First, the Court discerns in Vaca and Steele a “compensation principle,” a principle supposedly dictating that a damages award may “make the injured employee whole,” but may do no more. Ante, at 49, and n. 12. If these cases do embody a “compensation principle“—really, a neologism in this area of the law—it is a principle of a vastly different sort from that on which the Court relies. Steele and Vaca assuredly do stand for the proposition that a worker injured by his union‘s breach of duty must at least be made whole. In Steele the Court held the plaintiffs entitled to a judicial damages remedy inasmuch as no “adequate administrative remedy” was available. 323 U. S., at 206-207. In Vaca it refused to find exclusive jurisdiction of unfair representation suits in the National Labor Relations Board, lest victims of union discrimination, owing to the Board‘s limited remedial powers, on occasion be left remediless. 386 U. S., at 182-183. And in Vaca it also refused to limit judicial relief to a decree compelling arbitration of the underlying grievance, reasoning that an arbitrator might lack power to award damages against the union, and holding instead that “the court should be free to decide the contractual claim and to award the employee appropriate damages or equitable relief.” Id., at 196. In Vaca and Steele, in other words, the Court held that a worker‘s remedies must include damages so that in all cases he would be fully compensated. But in neither case did it hold that the worker‘s remedies must exclude damages to the extent they rise above the full compensation norm. The Court has read into Vaca‘s affirmative compensation policy a negative pregnant; it has transformed its liberal “compensation principle” into a parsimonious limiting rule; it has converted the floor beneath the injured employee‘s remedies into a ceiling on top of them.
The Court‘s second reason for banishing punitive damages from the pantheon, closely related to the first, is that federal labor policy is “essentially remedial” and hence inhospitable to punitive awards. Ante, at 52. The Court cites two major cases to support this theory. Neither is apposite. In Republic Steel Corp. v. NLRB, 311 U. S. 7 (1940), the Court held that the Board cannot order punitive sanctions. But the question in that case was whether “Congress [had] conferred the power upon the Board to impose such requirements.” Id., at 10. The question, in other words, was simply one of the Board‘s statutory competence; the Court
The third reason the Court gives in support of its per se rule is that punitive damages awards “could deplete union treasuries, thereby impairing the effectiveness of unions as collective-bargaining agents.” Ante, at 50-51. It is true that Vaca, in enunciating its formula for apportioning damages in wrongful-discharge cases, said that “[i]t could be a real hardship on the union” to pay damages in certain circumstances. 386 U. S., at 197. But the Court was not talking about unions’ fiscal soundness; one searches the opinion in vain for references to “depletion of union treasuries” or “impairment of union effectiveness in collective bargaining.” What Vaca said was that it could be a real hardship to make
The fourth theory underpinning the Court‘s per se rule is that “the prospect of punitive damages in cases such as this could curtail the broad discretion that Vaca afforded unions in handling grievances,” and thus “could disrupt the responsible decisionmaking essential to peaceful labor relations.” Ante, at 51, 52. The Court‘s theory seems to be that a union, fearing punitive damages, might become more vigilant in processing workers’ grievances; that this vigilance might lead unions to process frivolous grievances; that this frivolity might antagonize the employer; and that this antagonism might beget disharmony at the bargaining table. This reasoning seems tenuous to me. Surely, the Court cannot believe that such airy speculations will induce union shop stewards to abandon all vestiges of common sense as they go about their diurnal chores. And even if the prospect of punitive damages did operate to chill a union‘s reason “in cases such as this,” no Member of the Court is proposing to
B
The Court‘s four proffered reasons in support of a per se ban on punitive damages thus leave me unpersuaded. I am not alone in feeling this way, for no Court of Appeals to consider the question has embraced the per se rule the Court today goes out of its way to adopt. As the Court observes, ante, at 45-46, the Fourth Circuit, followed by the Tenth in this case, has approved of punitive damages in unfair representation cases. Harrison v. United Transportation Union, 530 F. 2d 558, 563-564 (1975), cert. denied, 425 U. S. 958 (1976). The Eighth Circuit has expressed the view that punitive damages may be awarded where the union is guilty of “outrageous or extraordinary conduct.” Butler v. Teamsters Local 823, 514 F. 2d 442, 454 (CA8), cert. denied, 423 U. S. 924 (1975). The Ninth Circuit, while barring punitive damages on the facts, restricted its holding to “grievances of the kind alleged” in the case. Williams v. Pacific Maritime Assn., 421 F. 2d 1287, 1289 (1970). Even the Third Circuit, upon whose decision the Court relies to make out a Circuit conflict here, ante, at 45-46, declined to embrace the Court‘s per se approach, refusing to “decide whether any circumstances exist in which a punitive-type remedy . . . for union misconduct might be implied under the Railway Labor Act,” and holding only that punitive damages were unavailable where (as in that case) no actual damages had been shown. Deboles v. Trans World Airlines, Inc., 552 F. 2d 1005, 1019 (CA3 1977).
The Court of Appeals’ unanimous refusal to erect a per se bar to punitive damages against unions, both in unfair representation cases and in Landrum-Griffin cases, seems judicious to me. If a union‘s conduct should reveal intentional racial discrimination, deliberate personal animus, or conscious infringement of speech and associational freedoms, I can discern no principle of federal labor policy that stands in the way of a punitive award. Punitive damages in such an exceptional case will serve at least to deter egregious union conduct, and Vaca makes clear that deterrence is a proper objective in unfair representation actions. See 386 U. S., at 187. If the Court feels obliged to devise some “careful balance of individual and collective interests” here, ante, at 48, the solution, in my view, is not to ban punitive damages across the board, but to restrict them to their proper sphere, namely, to those rare cases where the union‘s conduct can truly be described as outrageous.
For these reasons, I would hesitate to embrace the Court‘s per se rule even in a case that squarely presented that question for decision. What I find particularly hard to fathom is the Court‘s willingness to promulgate a per se rule here, where the pronouncement is manifestly unnecessary to decision. This case involves no racial discrimination, no trampling on workers’ “bill of rights“; the record does not suggest—indeed, respondent does not even contend—that the union‘s conduct was motivated by personal hostility. For all this record shows, the union, in neglecting to act promptly on respondent‘s grievance, was simply following its standard operating procedure, a procedure admittedly inappropriate here, given the time constraints under which the union was operating, but a procedure for whose inappropriateness in this case respondent himself was at least partly responsible, since it was he who failed to notify the union until 52 days of the contract‘s 60-day limit had expired. The union‘s conduct, in
To decide this case, in sum, the Court need hold only that the trial judge erred as a matter of law in submitting the punitive damages issue to the jury. Because the Court goes further and proscribes punitive awards in much more difficult and questionable situations, not presented here, I cannot join the opinion and I concur in the result only.