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The wrongfully discharged employee may bring an action against his employer in the face of a defense based upon the failure to exhaust contractual remedies, provided the employee can prove that the union as bargaining agent breached its duty of fair representation in its handling of the employee's grievance.
Petitioners, who were formerly employed as truck drivers by respondent Anchor Motor Freight, Inc. (Anchor), were discharged for alleged dishonesty. Respondent union, claiming that petitioners were innocent, opposed the discharges, and pursuant to the collective-bargaining contract the matter was submitted to an arbitration committee, which upheld the discharges. The collective-bargaining contract provided that a decision by the arbitration committee would be final and binding on all parties, including the employees affected. However, when subsequent information indicated that the charges of dishonesty might have been false, petitioners brought a wrongful-discharge suit against the employer and union under § 301 of the Labor Management Relations Act, alleging that the falsity of the charges could have been discovered with a minimum of investigation, and that the union had made no effort to ascertain the truth and thereby had violated its duty of fair representation by arbitrarily and in bad faith depriving petitioners of their employment and permitting their discharge without sufficient proof. The District Court granted summary judgment for respondents on the ground that the arbitration committee's decision was final and binding absent a showing of bad faith, arbitrariness, or perfunctoriness on the union's part. Concluding that there were sufficient facts from which to infer bad faith or arbitrary conduct on the union's part and that petitioners should have been afforded an opportunity to prove their charges, the Court of Appeals reversed the District Court to the extent, but affirmed the judgment in the employer's favor on the ground that the finality provision of the collective-bargaining contract had to be observed unless evidence showed misconduct by the employer or a conspiracy between it and the union. Certiorari was granted.
Was it proper to dismiss the claim against the employer for breach of collective bargaining contract, notwithstanding the fact that the accompanying complaint against the union for breach of duty of fair representation has withstood the union’s motion for summary judgment?
The United States Supreme Court reversed the Court of Appeals' affirmance of the District Court's judgment in favor of the employer. The Court held that the petitioners were entitled to an appropriate remedy against the employer as well as the union if the petitioners proved erroneous discharges in violation of the bargaining agreement and the union’s breach of duty tainting the arbitration decision, notwithstanding that the bargaining contract provided for finality of arbitration. In this case, the Court determined that the union's breach of duty relieved the employees of the requirement to settle disputes through contractual grievance procedures and also removed the bar of the finality provisions of the contract. Because of the union's alleged bad faith, the Court concluded that the employees were entitled to relitigate their discharges against the employer despite no known malfeasance on the employer's part.