Colleen LEE v. RHODE ISLAND COUNCIL 94, A.F.S.C.M.E., AFL-CIO, Local 186 v. Town of Burrillville, by and through its Treasurer, John Mainville.
No. 2000-368-APPEAL.
Supreme Court of Rhode Island.
May 16, 2002.
796 A.2d 1080
We are of the opinion that the present case falls squarely within our holding in Martinelli v. Travelers Insurance Companies, 687 A.2d 443 (R.I.1996), a case that dealt with an insurance policy containing the identical language as the policy before us. We are not satisfied that the insurance policies at issue in this case are ambiguous. On the declarations page of each policy, the “Insured” clearly is identified as the respective corporation. Further, under the section entitled “Who is an Insured,” the term “You” refers to the insured, or a Class I insured, in this case, the corporation. Because there is no ambiguity in either policy, we decline to depart from the literal language and we accord to each policy its plain and ordinary meaning. Therefore, pursuant to the provisions of each policy, the corporation was the named insured, not the decedent. Accordingly, the decedent was not a Class I insured and was not entitled to uninsured motorist coverage.
We agree with the plaintiff that in Martinelli, this Court suggested that shareholders and employees acting within the scope of their employment might be considered the named insured for purposes of uninsured motorist coverage. However, there is no evidence tending to show that the decedent falls within this exception. Martinelli, 687 A.2d at 446. The plaintiff presented no direct evidence that the decedents were engaged in any business-related activity. Therefore, the grant of summary judgment was appropriate in this case.
Accordingly, the plaintiff‘s appeal is denied and dismissed and the summary judgment entered is affirmed. The papers in this case are remanded to the Superior Court.
Paul M. Giacobbe, Warwick, Andrew B. Prescott, Providence, for Defendant.
Present: WILLIAMS, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
OPINION
PER CURIAM.
This case came before the Supreme Court on March 5, 2002 on the appeal by the plaintiff, Colleen Lee (plaintiff or Lee) from the grant of summary judgment in favor of the defendants, Rhode Island Council 94 of the A.F.S.C.M.E., Local 186 (union or Council 94) and the Town of Burrillville, by and through its treasurer, John Mainville (town or Burrillville). A single justice of this Court issued an order directing the parties to appear and show cause why the issues they raised should not be summarily decided. After argument of counsel and a review of the memoranda of the parties, we conclude that cause has not been shown. Therefore, we proceed to decide this appeal at this time.
Lee was employed by the town as an administrative aide from January 1987 through November 1993, when she was terminated for alleged misconduct. Lee, with the assistance of Council 94, instituted a grievance procedure contesting her termination. After the town manager rejected the grievance, Council 94 indicated that it intended to undertake arbitration of Lee‘s termination; however, the business agent for Local 186 failed to make a timely demand for arbitration as set forth in the collective bargaining agreement. According to the record, the union business agent testified at a deposition that he gave the request for arbitration to a secretary the day after the grievance was denied and did not think about it again. As a result, the arbitrator denied and dismissed the arbitration on the ground that it was not timely. The plaintiff instituted suit against the union, alleging a breach of the duty of fair representation. Council 94 filed a third-party complaint against the town seeking indemnification against any potential liability for plaintiff‘s wrongful termination.
Significantly, after her efforts to be reinstated were rebuffed, Lee sought to collect unemployment security benefits from the Department of Employment and Training. The initial denial of benefits by a department referee (DET referee) was affirmed by the Board of Review of the Department of Employment and Training (DET) and incorporated by reference in the decision of DET. The DET referee concluded that the claimant was discharged under disqualifying circumstances within the meaning of
The plaintiff moved for summary judgment concerning the claim of breach of the duty of fair representation, and Council 94 and the town filed cross motions for summary judgment. In a written decision, the hearing justice granted summary judgment to Council 94 and the town and denied relief to plaintiff. Although defendants raised the defense of res judicata arising from the decision of DET, that denied Lee unemployment benefits, the hearing justice failed to address this issue in his decision.
Duty of Fair Representation
In granting summary judgment to defendants, the hearing justice looked to federal law for guidance in determining what constitutes a breach of the duty of fair representation by a labor union. Citing Vaca v. Sipes, 386 U.S. 171, 190, 191, 87 S.Ct. 903, 916, 917, 17 L.Ed.2d 842, 857, 858 (1967), the hearing justice concluded that the duty of fair representation is breached upon a showing of arbitrary, discriminatory, or bad faith conduct, or by the handling of a grievance in a “perfunctory” manner and not by union error in failing to process a meritorious grievance. The hearing justice, noting that it was undisputed that the union had failed to make a timely demand for arbitration, found this neglect to be “[h]uman error [and] not indifference.” Thus, he concluded there was no evidence that the union acted in an arbitrary, discriminatory, or bad faith manner; but rather, Council 94 was guilty of mere negligence that did not amount to a breach of the duty of fair representation.
In Belanger v. Matteson, 115 R.I. 332, 341, 346 A.2d 124, 131 (1975), this Court first addressed the duty owed by a labor union to its members and adopted the federal rule that, as the exclusive representative of all the employees in a given class, a labor union is under a duty to fairly and adequately represent the interests of all those whom it represents. This duty extends to the resolution of disputes by means of grievance and arbitration. “The duty upon the Union here is to ‘* * * in good faith and in a nonarbitrary manner, make decisions as to the merits of particular grievances,’ and, if it decides to pursue a grievance, it must not do so in a perfunctory manner.” Id. (quoting
Collateral Estoppel
The defendants assert that principles of collateral estoppel bar the relitigation of plaintiff‘s claim and argue that plaintiff‘s termination was found to be for “proved misconduct” by DET, such that Lee cannot recover against the union for breach of the duty of fair representation. “This Court has held that the doctrine of collateral estoppel prevents the relitigation of an issue actually litigated and determined between the same parties” or those in privity with them. Wilkinson v. The State Crime Laboratory Commission, 788 A.2d 1129, 1141 (R.I.2002). Under our well settled rules, collateral estoppel is applicable when there is “an identity of issues[,] the prior proceeding * * * [has] resulted in a final judgment on the merits[,] and the party against whom the collateral estoppel is sought must be the same as or in privity with the party in the prior proceeding.” Id. (quoting Commercial Union Insurance Co. v. Pelchat, 727 A.2d 676, 680 (R.I.1999)). Our review of the record convinces us that all three elements necessary for the application of collateral estoppel are present in this case: first, the town contested Lee‘s eligibility for unemployment benefits and presented evidence sufficient for a fact-finder to conclude that she was terminated for “proved misconduct,” second, this finding culminated in a final judgment and, finally, Lee is the party against whom the collateral estoppel is sought. Thus, we conclude that the finding that Lee was terminated for “proved misconduct” is conclusive and may not be relitigated. This does not end the inquiry, however, because under our law an arbitrator is free to modify the penalty imposed by the employer and fashion what he or she considers to be the more appro-
“Unless the parties agree otherwise in writing that the arbitrator shall have no authority to modify the penalty imposed by the employer in the arbitration of matters relating to the disciplining of employees, including, but not limited to, termination, suspension, or reprimand, the arbitrator shall have the authority to modify the penalty imposed by the employer and/or otherwise fashion an appropriate remedy.” (Emphasis added).
Thus, an arbitrator, in municipal employment arbitration, is vested with statutory authority to set aside the penalty imposed by the employer and fashion an appropriate remedy. Except in certain narrow circumstances, this Court has recognized this grant of statutory authority to an arbitrator that modified the penalty imposed by the employer. In Rhode Island Brotherhood of Correctional Officers v. State, 643 A.2d 817, 822 (R.I.1994), we reversed a decision of the Superior Court that vacated an arbitrator‘s award that reinstated an employee of the Department of Corrections and held that the issue of whether the termination was for just cause was clearly an arbitrable grievance that should therefore be accorded a deferential standard of review.
This Court has recognized that there are certain narrow circumstances involving critical aspects of the exercise of state power in which a supervisor “must be allowed to act in a manner free of the constraints of the CBA[.]” However, we have limited those situations to questions that interfere with the power of the employer to perform an essential aspect of its responsibilities. Id. Accordingly, we conclude that res judicata arising from DET‘s decision that the plaintiff was terminated for proved misconduct is a final determination not subject to relitigation before the arbitrator. However, the question of whether an arbitrator, aided by a complete record, may have fashioned a more appropriate remedy in accordance with his statutory authority was not finally determined and could have been litigated by Lee, but for Council 94‘s negligent and perfunctory handling of her demand for arbitration.
Conclusion
For the reasons set forth herein, we sustain the appeal of the plaintiff and vacate the judgment entered by the Superior Court. The papers in this case are remanded to the Superior Court for further proceedings consistent with this opinion.
Flanders, Justice, dissenting.
Respectfully disagreeing with my colleagues, I would hold that the Board of Review of the Department of Employment and Training‘s (DET) denial of unemployment compensation to this plaintiff, based upon her record of “proved misconduct” as a municipal employee, see
Because a union cannot have acted arbitrarily in failing to pursue a meritless grievance, I would deny the employee‘s appeal, affirm the Superior Court‘s dismissal of her complaint, and, therefore, not reach any of the other issues raised by this appeal. For plaintiff to prevail in any arbitration with her municipal employer, she ultimately had to show that the town lacked just cause for firing her. See DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983); see also MacQuattie v. Malafronte, 779 A.2d 633, 636 (R.I.2001) (per curiam). “To prevail against either the [employer] or the Union * * * [the plaintiff] must not only show that [her] discharge was contrary to the contract but must also carry the burden of demonstrating a breach of duty by the Union.” DelCostello, 462 U.S. at 165, 103 S.Ct. at 2291, 76 L.Ed.2d at 489 (quoting United Parcel Service v. Mitchell, 451 U.S. 56, 66-67, 101 S.Ct. 1559, 1565-66, 67 L.Ed.2d 732, 743 (1981) (Stewart, J., concurring)). “The employee may, if [s]he chooses, sue one defendant and not the other; but the case [s]he must prove is the same whether [s]he sues one, the other, or both.” DelCostello, 462 U.S. at 165, 103 S.Ct. at 2291, 76 L.Ed.2d at 489. Most importantly, a union cannot be found to have arbitrarily failed to pursue a grievance if the grievance lacks merit. See Ooley v. Schwitzer Division, Household Manufacturing, Inc., 961 F.2d 1293, 1302-03 (7th Cir.1992).
In affirming the DET‘s denial of unemployment benefits to plaintiff after the town had discharged her, the District Court found that competent evidence existed to support DET‘s determination that the town had discharged plaintiff for willful misconduct. The DET referee found
Thus, I must respectfully disagree with the majority‘s decision to deem “a nullity” the District Court‘s finding “that the conduct of the claimant evinces such a willful and wanton disregard of the town of Burrillville‘s interests as is found in deliberate violations and disregard of standards of behavior which the employer has a right to expect of the employee.” When DET ruled that the town had discharged this employee for her “proved misconduct,” it necessarily found, as a matter of law, that the employee had engaged in the very conduct that the majority deems a nullity. This is so because, under
“is limited to conduct evincing such willful or wanton disregard of an employer‘s intent as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his [her, or its] employee, or in carelessness or, negligence of such degree or recurrence as to manifest equal culpability, wrongful intent, or evil design, or to show an intentional and substantial disregard of the employer‘s interests or of the employee‘s duties and obligations to the employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertancies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed ‘misconduct’ within the meaning of the statute [
§ 28-44-18 ].” Turner v. Department of Employment Security, Board of Review, 479 A.2d 740, 741-42 (R.I.1984) (quoting Boynton Cab Co. v. Neubeck, 237 Wis. 249, 296 N.W. 636, 640 (1941)). (Emphasis added.)
See also Bunch, 690 A.2d at 337 (adopting this definition of misconduct “as our own under
Given the DET‘s finding upholding this employee‘s discharge for her proved misconduct, I would hold that the District Court‘s final judgment in the employee‘s unsuccessful appeal of DET‘s denial of unemployment compensation collaterally estopped the employee from later contending in an arbitration proceeding that the town wrongfully discharged her. Accord Volino v. General Dynamics, 539 A.2d 531, 532 (R.I.1988) (affirming Superior Court judgment dismissing employee‘s wrongful-discharge complaint because the Department of Employment Security‘s denial of unemployment benefits to the employee for actions not in the best interest of the employer “collaterally estopped relitigation of the wrongful-discharge issue.“); Dearborn Heights School District No. 7 v. Wayne County MEA/NEA, 233 Mich. App. 120, 592 N.W.2d 408, 411 (1998) (doctrine of collateral estoppel prevented employee and her union from arbitrating the issue of whether employee had committed a battery on fellow worker because the State Tenure Commission had previously found that she had committed the battery). Importantly, the DET proceeding did not just rule on whether the employee was guilty of misconduct; rather, it ruled that the employer was justified in discharging the employee because of her proved misconduct. Indeed, if DET had concluded that the sanction of discharge had been too severe, or if DET had believed that the misconduct in question did not warrant discharging the employee from her job, then DET would have been duty bound to grant unemployment compensation to the employee because only if the employee‘s “proved misconduct” warranted the employee‘s discharge from her job would she be disqualified from obtaining unemployment compensation.
The Restatement (Second) Judgments § 83 at 269 (1982), reaches the same conclusion:
“Where an administrative forum has the essential procedural characteristics of a court * * * its determinations should be accorded the same finality that is accorded the judgment of a court. The importance of bringing a legal controversy to conclusion is generally no less when the tribunal is an administrative tribunal than when it is a court.”
For plaintiff to be collaterally estopped by a prior adjudication from later challenging whether she was wrongfully terminated, three factors must exist: (1) an identity of issues between the two proceedings, (2) a final judgment on the merits in the prior proceeding, and (3) the party against whom collateral estoppel is asserted must be the same as or in privity with a party in the prior action. E.W. Audet & Sons, Inc. v. Fireman‘s Fund Insurance Co., 635 A.2d 1181, 1186 (R.I.1994); Wilkinson v. State Crime Laboratory Commission, 788 A.2d 1129 (R.I.2002); see also State v. Pacheco, 763 A.2d 971, 980 (R.I.2001). In Wilkinson, we recently held that a prior judgment concerning unemployment compensation benefits barred one of the litigants in a later lawsuit involving the same parties to that earlier proceeding from relitigating one of the key factual issues determined in the earlier proceeding (namely, what entity employed the claimant). The plaintiff argues that collateral estoppel does not apply in this case because there is a lack of “identity between
I am of the opinion that all three factors set out in E.W. Audet & Sons, Inc. are present in this case. Although the DET and the District Court did not use the phrase “just cause,” they decided, in essence, that the town had acted properly in firing the employee because of her deliberate disregard of the municipal employer‘s best interest. They did so by concluding that the town had discharged her because of the employee‘s record of “proved misconduct.” The employee (the party against whom collateral estoppel is asserted) was a party to that action. The town also was a party. Although the union was not a party to the DES proceeding, identity of parties is not required for issue-preclusion principles to bar relitigation; rather, if the party against whom collateral estoppel is asserted (namely, plaintiff Colleen Lee) was also a party to the earlier proceeding, collateral estoppel can be applied against such a party because that party already has had a fair opportunity to litigate the issue in the earlier proceeding. See E.W. Audet & Sons, Inc., 635 A.2d at 1186. Here, the District Court affirmed that the DET‘s “proved-misconduct” findings were supported by competent evidence. Because neither party sought nor obtained further review of the District Court judgment, it constituted a final adjudication on the issue of plaintiff‘s proved misconduct at work, as well as the propriety of the town‘s action in discharging her for such misconduct.
The United States Supreme Court has long applied issue-preclusion doctrines to final administrative determinations, such as the DET ruling in this case:
“When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.” Astoria Federal Savings and Loan Association v. Solimino, 501 U.S. 104, 107, 111 S.Ct. 2166, 2169, 115 L.Ed.2d 96, 104 (1991) (quoting United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642, 661 (1966)).
Furthermore,
“a losing litigant deserves no rematch after a defeat fairly suffered * * * on an issue identical in substance to the one [s]he subsequently seeks to raise. To hold otherwise would * * * impose unjustifiably upon those who have already shouldered their burdens, and drain the resources of an adjudicatory system with disputes resisting resolution.” Id. at 107-08, 111 S.Ct. at 2169, 115 L.Ed.2d at 104 (citing Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552, 559 (1979)).
The Court further stated that:
“The principal holds true when a court has resolved an issue, and should do so equally when the issue has been decided by an administrative agency * * * ” Id. (citing University of Tennessee v. Elliott, 478 U.S. 788, 798, 106 S.Ct. 3220, 3225-26, 92 L.Ed.2d 635, 646 (1986)).2
Given the DET‘s finding that the town discharged plaintiff because of her record of proved misconduct, she cannot succeed as a matter of law on her claim that the union violated its duty of fair representation. See Skillsky v. Lucky Stores, Inc., 893 F.2d 1088 (9th Cir.1990) (employee‘s claim against union for breach of duty of fair representation was precluded where state court affirmed arbitrator‘s conclusion that there was sufficient cause for the discharge). This is so because the union cannot be found to have acted arbitrarily in failing to pursue a meritless grievance. Its alleged negligence in failing to file a timely grievance was therefore harmless error.
Here, as in State Department of Children, Youth and Families v. Rhode Island Council 94, AFSCME, AFL-CIO, 713 A.2d 1250, 1258 (R.I.1998) (holding that if a government employee has been found guilty of job-related “proved misconduct” in an earlier DET proceeding “warranting not only her discharge but the denial of employment compensation, then a fortiori [such an employee] * * * is also dischargeable for just cause“) (emphasis added), it would be irrational for an arbitrator to conclude that, notwithstanding plaintiff‘s long history of insubordination and disregard of her municipal employer‘s best interests, and notwithstanding the DET‘S and the District Court‘s finding that she was discharged for her “proved misconduct,” the town still lacked just cause to discharge her from employment but could discipline her only via some lesser sanction. See, e.g., Rhode Island Laborers’ District Council v. State, 592 A.2d 144, 146 (R.I.1991) (holding that an arbitrator‘s reduction of the employer‘s discharge sanction to a six-month suspension was irrational in a case involving the employee‘s insubordination: “Although the penalty of discharge has from time to time been referred to as a capital penalty in the labor context, it is equally true that direct and flagrant insubordination constitutes a capital offense in the context of employer-employee relations.“).
In this case, as DET found, the town fired the employee only after she disobeyed a direct order from her supervisor to have another person in the office check the
Thus, allowing an arbitrator to proceed to reach a possible contrary conclusion would be to countenance the possibility of two totally inconsistent rulings: in the first case, DET and the District Court will have ruled that the employee‘s proved misconduct entitled the employer to discharge her from employment and disqualified the employee from receiving unemployment compensation. In the second case, an arbitrator would be allowed to conclude that, notwithstanding the employee‘s record of misbehavior and insubordination, the employer was not allowed to terminate her from employment because the penalty of discharge was too harsh. See John Morrell & Co. v. Local Union 304A of the United Food and Commercial Workers, AFL-CIO, 913 F.2d 544 (8th Cir.1990) (arbitrator prevented from independently examining the meaning of the no-strike clause in favor of the union after jury trial had found for the employer). There is simply no way to reconcile these two contrary results because, if an arbitrator could find that the employee should not have been fired from her job—reasoning that the misconduct in question did not warrant such a severe sanction—then the employee should have been entitled to collect unemployment compensation for her wrongful discharge. But, as we know from the DET rulings and from the District Court‘s final judgment, this employee‘s discharge was anything but wrongful.
To avoid this potential inconsistency and the disutility of litigating the same issue twice, I would deny the plaintiff‘s appeal, apply issue-preclusion principles to this case, and affirm the Superior Court‘s judgment. As we stated in St. Pius X Parish Corp. v. Murray, 557 A.2d 1214, 1217 (R.I.1989), “[e]very employer has a right, to some extent, to govern its employees through the establishment of performance standards and rules of conduct the violation of which may be grounds for dismissal.” This includes our cities and towns, and I would not allow an arbitrator to reach a contrary conclusion and “substitute his or her judgment for an appointing authority in selection of discipline,” Rhode Island Laborers’ District Council, 592 A.2d at 146, after three levels of the DET and the District Court have found against the employee on this same issue and have ruled repeatedly that the town had the right to discharge this employee for her proved misconduct.
Michael PARRELLA, Donna Ann Parrella, and Michael Anthony Parrella v. Dr. Kathleen Cote BOWLING and Women & Infants Hospital of Rhode Island.
No. 2000-296-Appeal.
Supreme Court of Rhode Island.
May 16, 2002.